DynCorp International, the major multinational service contractor with 1,000 employees and most of its operations already in Fort Worth, is considering expanding here and moving its headquarters from Virginia under a tax abatement the City Council is considering.
DynCorp would expand the footprint of its Fort Worth offices in the Alliance Corridor, maintain its current 1,000 full-time equivalent employees, and move at least 100 here from the Washington suburb of Falls Church, Va., under the terms of the agreement the council will vote on in August.
The company also is considering Alabama and North Carolina, Robert Sturns, Fort Worth’s assistant director of housing and economic development, told City Council members Tuesday (see video). If Fort Worth loses the headquarters to one of those two states, it also risks losing the company’s Fort Worth operation, he said.
“That’s really the risk factor,” Mayor Betsy Price said Tuesday.
The city and D/FW Airport will benefit significantly, she said.
“A lot of people fly in and out of their headquarters at DynCorp, and they’re excellent jobs, the pay on these jobs is excellent,” Price said, praising the city staff and Fort Worth Chamber of Commerce for a “long hard fought battle” in shepherding the DynCorp negotiations.
Fort Worth also will present the DynCorp development to the state for consideration as a State Enterprise Project Designation, which would give the company a refund on its state sales tax.
Ashley Burke, a spokesperson for DynCorp, declined to say whether the abatement and the sales tax designation would be enough.
“We are always looking for ways to operate more efficiently and effectively while reducing our costs across the organization,” Burke said in an emailed response to questions.
“ Part of that process includes an examination of our facilities and our location-sensitive operating costs,” Burke said. “We love Fort Worth – DI has had operations there for decades – and, if it makes sense financially, we would be open to expanding that presence.”
DynCorp’s aviation business is based in Alabama, and the company has a “signfiicant presence” there, Burke said, declining to answer other questions about the company’s motivation for relocating and whether it’s in negotaitions with Alabama and North Carolina.
Both states are pursuing the company, Sturns said. The average annual wage of the headquarters employees is between $125,000 and $130,000 a year, he said.
DynCorp, a Fortune 1000 company with 30,000 employees worldwide, has operated in leased quarters at 13500 Heritage Parkway since 2006. Ninety-six percent of the company’s income comes from contracts managed by the Fort Worth facility, Sturns said.
DynCorp would receive a 10-year city propertty tax abatement of up to 80 percent of the new real and business property value it adds to the tax rolls.
The abatement would be a maximum $970,600 over 10 years. The company would pay an estimated total $1.7 million in city tax over that time.
To get the maximum abatement, DynCorp would have invest at least $14 million in expanding the building and adding equipment in four annual increments starting next year and ending in 2017. The expansion and relocated employees would be be in place by December 2014, Sturns said.
The increments would be $2 million in improvements and $4 million in buisness property in 2014; $2 million in business property in both 2015 and 2016; and $2 million in improvements and $2 million in business property in 2017.
The greater of 30 percent or $600,000 of its construction spending on the improvements would have to be done with Fort Worth contractors, and the greater of 25 percent or $500,000 with Fort Worth minority and women-owned contractors.
The greater of 25 percent or $1.25 million of the company’s estimated $5 million in annual service and supply spending would have to be done with Fort Worth companies. The greater or 25 percent or $1.25 million would have to be done with Fort Worth women and minority-owned companies.
The abatement contract also contains benchmarks for employment of Fort Worth and central city residents.
Failure to meet any of the measures would result in a reduction of the abatement, with the overall employment target comprising 15 points of the maximum 80 percent abatement.
- Scott Nishimura, Star-Telegram Fort Worth City Hall reporter