6i}; Kimberly-Clar Mobile Min lame: Cl 7/00 /r7 Can/?7 MM mew 7 May 1,2017 industrial Development Board of Crty of Mobile c/o Ms. Shelby Glover Mobile Area Chamber of Commerce PO Box 2187 Mobile, AL 36652?2187 Rb: Update on Project Plan for Kimberly-Clark Mobile Mill Dear Members of the Board: On behalf of Kimberly-Clark Corporation and the employees of our Mobile Mill, thank you for the resolution of support the Board approved on March 23" for our project plan. As you were briefed, Kimberly-Clark anticipates investing approxrrnately $1 l0 million and adding approximately 1721 jobs over the next 24 months at our Mobile Mill. Mobile Mill received great news last week that the K-C Board of Directors approved the $75 million energy plant project, the largest one of the four projects discussed with the IDB. The natural gas-?red, combined heat-power plant (CHP) will greatly improve the energy cost and ef?ciency ot'K-C Mobile, which will boost its competitiveness for future investment and jobs. CIIP construction is slated to start in early 2018 lQ'l 8 and startup of the plant in early 2019. Regarding the balance of the $l10 project plan, $35 million and 17-21 new jobs, the anticipated timing is as follows: 1. Trssue Machine #11 upgrade approved and all installations in place by mid-2018 2. Tissue Machine #8 upgrade approval expected late 2017-early 2018 and all installations in place by late 2018-early 2019 3. New Tissue Converting 1 17-21 newjobs) approval expected early 2018, construction commencing mid-2018 and startup by early-mid-2019 Thank you for your patience with the various moving parts of this 24-month project plan and rest assured that we will keep the IDB apprised as major milestones are reached. Sincerely, ?Maw/21W Todd Visscher Kimberly-Clark Corporation Mobile, Alabama Plant Manager Mob?e, Nation? 36610 (251) 330-3000 Kimberly-Clark Corporatlon (eat a/ Pm7/ve/? 0m?, (336M) Summary of versus Per Department of Revenue as of 2/2/17 It is abatement 101 for the 40-9B and 40-9G statute. 40-9B is the statute that has been around since 1992. You must have a qualifying business activity and there is no minimum investment for new projects for manufacturing business activities and for expanding projects the minimum investment must meet the lessor of or 30% of the original cost of the existing facility. It is for new projects and major additions. It covers new or upgraded real and personal property. This statute de?nes upgrade as equipment being replaced does one additional function from the previous equipment. If the real property is an existing owner, anything done to the building must include adding square footage. Under 40- 9B, true replacements, renovations, and modi?cations did not qualify for abatements. is a bit more complex: A qualifying project under 40-9G is any project that l) spends at least in capital expenditures as part of any addition, expansion, improvement, renovation, re?opening, or rehabilitation of a facility, or replacement of any existing equipment or tangible personal property, 2) predominately involves an approved activity, and 3) for which no project agreement has been entered into with the Governor for the provision of other incentives. Chapter 9G abatements are subject to and shall follow the same procedures, provisions, limitations, and de?nitions under 40-9B, Code of Alabama 1975 with the following exceptions. For sales and use tax purposes, capitalized repairs, rebuilds, maintenance, and replacement equipment shall qualify for abatement. For property tax purposes, capitalized repairs, rebuilds, maintenance. and replacement equipment shall qualify for abatement and the amount of property tax abatement for such property will be equal to the excess amount of property taxes owed for the real or personal property that is being replaced, upgraded or improved, for the applicable tax year that is greater than the amount of property taxes owed on such property for the tax year immediately before the qualifying project was placed in service. A complete and detailing listing of any and all project costs for the addition, expansion, improvement, renovation, re-opening, or rehabilitation for a facility or replacement of any existing equipment should be attached to the application to the local granting authority in order for the granting authority to make a cost/bene?t analysis in accordance with Section 40-9B. For personal property abatement purposes, a listing of all existing personal property, including manufacturing equipment, non-manufacturing equipment, of?ce equipment, and computers, affected by the project must be attached to the application as well, and must be listed by original acquisition date, original acquisition cost and description of asset as reported on FORM ADV-4O as of the Oct 1 lien date immediately preceding the date the project is placed in service. PMM 7/bca/i7 029M Cow 7W1 Mobile Chamber Benefit-Cost Analysis City of Mobile Kimberly Clark July 6, 2017 Exempt Years 10 Impact Years 20 Proposed Investment Capital investment; Wages $0 Equipment $25,000,000 Material 0_ Land _t0 total $25,000,000" Annual operation: Direct jobs 17_ Annual salary per job 88,235 total annual payroll $1,499, 995 Taxes Exempted First Year Total Exempted Ad Valorem Taxes Exempted City: mobile Mobile County State of Alabama Sales Taxes Exempted City: Mobile State of Alabama Total Ad Valorem Sales Taxes Exempted Taxes Collected - Unaffected by Exemption First Year Impact Years Ad valorem tax for local public education $147,500 $2,950,000 Ad valorem tax for state public education $15,000 $300,000 Local government through expenditures from construction wages $0 $0 from annual payroll $1,303,510 State government through expenditures from construction wages $0 $0 from annual payroll $2,765,851 Total Taxes Collected Unaffected by Exemption $162,500 $7,319,360 Taxes Collected - After Exemption Period Ends Post-exemption Years Ad Valorem Taxes after exemption ends City: mobile $350,000 Mobile County $1,025,000 State of Alabama $175,000 Total Taxes Collected after Exemption Ends $1,550,000 >Total Taxes Collected minus Exempted $4,694,360 >Net Tax Bene?ts - exemptions not subtracted $8,869,360 >Total Cumulative Payrolls,including construction wages $1,499,995