Economic Development Board recommends incentive package for Forteo Sky to city council
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Summary
The Economic Development Partnership Board voted to recommend a package of tax rebates and grants to support Forteo Sky’s planned manufacturing operation in Denton, citing up to $35.2 million in post-improvement property value and an estimated long-term local benefit; the recommendation will go to Denton City Council next week.
The Economic Development Partnership Board on April 15 recommended that Denton City Council consider an incentive agreement for Forteo Sky, a firm proposing a UAS (unmanned aerial systems) manufacturing hub at 3411 Mingo Road. Board staff summarized the company’s application and the recommended package before the board voted to forward the item to council by voice vote.
Board staff presenter Britney Saltillo told members the recommended package includes a Chapter 380 ad valorem rebate at 65% on real property improvements and business personal property for up to eight years (cap $498,564), a 50% sales-tax rebate on construction materials (one-time cap $94,500, contingent on Texas direct-pay permit), a job-based grant up to $227,000, and a headquarters grant up to $50,000 if the company chooses Denton for its headquarters. Saltillo said the company’s application estimates $23.5 million in capital investment, $12.6 million in improvements, $10.9 million in business personal property and an estimated 258 jobs in the application packet; staff reported the current building valuation at about $16.4 million and projected post-improvement taxable value of roughly $35.2 million.
Ellen McCarthy, introduced by staff as the company senior vice president of global government affairs, described Forteo Sky’s plans to lease the 165,000-square-foot building, build a manufacturing floor and offices, and integrate several acquired drone companies into a single manufacturing hub. McCarthy said the company is “very well capitalized” and that acquisitions of operating UAS firms are planned in the coming months; when asked about hiring, a company representative said they expect to hire “closer to 300” people though the application materials used more conservative estimates.
On workforce and pay, staff cited a proposed average salary of $78,787 for the jobs the company will create and noted Denton County’s average wage as $64,100. McCarthy told the board the company expects roughly 60–67% of revenue to come from federal government contracts and plans a mix of production, engineering, supply-chain, testing and executive positions. Staff also highlighted potential research and testing partnerships with University of North Texas (UNT), Texas Woman’s University (TWU) and North Central Texas College (NCTC), and noted potential testing at the Denton Enterprise Airport pending FAA approvals.
Chair called for a motion to recommend the package to city council; the motion passed by voice vote with aye recorded and no opposition announced. Staff said the item is slated for city council consideration the following Wednesday.
The board’s packet referenced Chapter 380 of the Texas Local Government Code as the statutory basis for the ad valorem rebate. The recommendation is a council-level action; final authority and any performance conditions or clawbacks will be determined if and when city council considers the full incentive agreement.
What’s next: staff will present the recommendation and the supporting performance measures to Denton City Council at its scheduled meeting next week for final action or further direction.
