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City staff recommend performance‑based sales‑tax rebates for ‘Project Chocolate’ expansion; council to consider consent placement
Summary
City economic‑development staff outlined a proposed incentive package for a company identified as Project Chocolate: a performance‑based sales and use tax rebate tied to equipment and construction purchases, with staff recommending a four‑year agreement and placement on the March 13 consent calendar.
Shauna Lippert, economic development manager for the City of Colorado Springs, told council staff recommend approving a performance‑based economic development agreement (EDA) for an employer identified in the briefing as “Project Chocolate,” and asked the council to place the item on the consent calendar for the city’s regular session on March 13.
Lippert described Project Chocolate as an international transportation‑technology company considering Colorado Springs as a new U.S. location. Staff said the company anticipates $1,270,000 in capital investment over eight years and plans to add 105 jobs over eight years at an average annual wage of $68,263—above the El Paso County average wage.
The recommended terms are performance‑based sales and use tax rebates: a 50% rebate of the city’s sales‑tax portion on purchases of machinery, equipment, furniture and fixtures, and a 50% rebate of the city’s 2% general fund sales‑tax rate on construction materials (effectively a 1% rebate). Because the project is expected to add 55 new jobs within the four‑year incentive period, staff recommended a four‑year EDA term. Lippert described the proposed structure as typical for similar agreements the city has offered previously.
Staff presented economic and fiscal impact estimates. Over four years, the project was estimated to add about 21 permanent jobs (direct plus indirect/induced) and grow local economic output by roughly $15.7 million over that period. Staff estimated gross new city tax revenue of about $118,000 over four years and estimated the city incentive (the sales and use tax rebate) at $5,250; the resulting net new city revenue estimate was $113,164 over four years. Staff also provided a 10‑year scenario showing larger cumulative impacts if the company expands beyond the recommended four‑year term.
Lippert said the incentives are strictly performance‑based: rebates would be paid only after the city collects the applicable taxes. She recommended council approve the EDA and asked that the item be placed on the consent calendar for the March 13 regular session. Council members present agreed to place the item on consent; no formal vote was recorded during the work session.
No ordinance or agreement was adopted at the briefing. Lippert said staff completed fiscal and economic analyses and would return the EDA for council action on the consent calendar.
