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Drop WEDC (Wylie Economic Development Corporation) Lawsuit against Sanden

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Background (Preamble): Sanden and the WEDC signed a Performance Agreement in February 2010. The Performance Agreement stated that the WEDC would provide financial assistance of $300,000 to Sanden. Sanden would not have to repay the assistance as long as Sanden: 1. Employed 275 “at any time during the term of this Agreement;” 2. Produced 340,000 compressors by April 1, 2012; 3. Invested $9,240,000 by April 1, 2012; 4. Paid its taxes on time; and 5. Had a taxable base of $58,000,000 “during the term of the Agreement.” There is no argument that Sanden met (and exceeded) 1-4 of the terms listed above. With regard to the 5th criteria: WEDC is claiming that the Sanden’s 2010 taxable base of $51M failed to meet the $58M threshold as specified in the agreement. The WEDC claims that the $58,000,000 “during the term of the Agreement” provision meant Sanden had to have a tax base of $58M at all times during the term of this Agreement, including in 2010. It is Sanden’s position that the ‘at any time during the term of the Agreement’ verbiage applies to the number of jobs. Conversely, the ‘during the term of the Agreement’ verbiage applies to the taxable base and means at some time during the Agreement after the investment specified in the 3rd criteria is made. The taxable base had to reach $58M at some time during the term of the contract and Sanden reached that in 2011. The 2011 tax year is the first time after the Agreement was signed that Sanden could have included the new investment in its tax base. Even if the WEDC is correct and Sanden was required to have a $58M taxable base at all times during the Agreement, the 2010 taxable base figure used by the WEDC is based on a January 1, 2010 valuation. This valuation was determined before the Agreement was even signed by the two parties and before the investment into the facility could have been made. Sanden claims the January 1, 2011 figure, which reflects the new investment and is above $58M, satisfies the 5th criteria. Even taking into consideration the difference in the 2010 taxable base of $51M and $58M, the cumulative tax difference between what Sanden has paid in taxes and what WEDC claims Sanden would owe in taxes is only $35K. In an act of good faith, Sanden offered to contribute $50K to the Wylie school district, to a community organization or to any charity named by the WEDC (presumably in Wylie). Unexpectedly, the WEDC sued Sanden for repayment of the entire $300,000. Why would an organization charged with the economic development of Wylie attempt to alienate the single largest taxpayer in the city? Sanden’s taxable base is greater than 2.5 times the tax base of the second largest taxpayer. Discounting tax dollars, Sanden’s employees spend their dollars in Wylie. Most businesses in Wylie are directly affected by such patronage. In addition, many Sanden employees live in Wylie and are actively involved in the community. Why has the WEDC selected Sanden International as a target for a lawsuit? Employees, friends, families, neighbors, and business partners, would like Sanden to prosper and grow in the community that we love. We are requesting that the WEDC drop the lawsuit against Sanden. The people and the businesses of Wyle will be adversely affected if Sanden’s future growth or existence is threatened by this lawsuit. Petition: We the undersigned call on the WEDC as a matter of good business sense, and just plain ‘ol decency, to drop the lawsuit against Sanden. Sanden has been a good neighbor. Help us keep Sanden in Wylie.

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