The City Council approved a $177,500 financial incentive request this week for an unidentified semiconductor manufacturing and design company that is considering expanding in Colorado Springs and adding 70 jobs over four years.

The council voted unanimously to approve a resolution at its regular meeting on Monday, authorizing a four-year economic development agreement between Colorado Springs and the unnamed integrated device manufacturer that produces high-performance analog and mixed signal products.

The council approved the request on the consent calendar without discussion; items on the consent calendar are considered as a whole and passed through with one vote.

Project Rey, the code name used for the company during the competitive process of attracting and retaining its business in Colorado, is considering spending $20.3 million over four years to expand and enhance facilities for new capabilities, city Economic Development Officer Jessie Kimber said at an October work session.

The company also has other future opportunities for growth, she said.

The agreement creates 70 jobs over four years, with average annual salaries of $87,000, “well above” the average yearly wage in El Paso County, Kimber said.

Another 135 jobs could be created indirectly or through induced demand over four years, for a total of 205 new permanent jobs. Fifty-six construction jobs could be created as part of the agreement.  

Kimber said the city will offer up to $177,500 in incentives for the project. The agreement includes sales and use tax rebates of $152,500 on the company’s purchase of business personal property like machinery, equipment, furniture and fixtures; and a $25,000 rebate on its purchase of construction materials, a staff presentation shows.

Under the agreement, the local economy is estimated to grow by roughly $92 million over four years and $276 million over 10 years. After the incentives, the company’s expansion would generate $880,807 in new city revenues over four years and about $1.7 million in additional revenue over 10 years.

The company operates a packaging facility in Colorado Springs. Kimber estimated that if its current operations remained here and it expanded locally, it would result in 315 combined permanent jobs over four years, the local economy would grow by approximately $145 million, and it would generate $1.6 million in new city revenues during that time.

This is a competitive project, Kimber said. The company is considering several U.S. locations for its expansion.

Last month, the Colorado Economic Development Commission approved more than $1.1 million in performance-based job growth tax incentives and $1 million in CHIPS refundable tax credits for the company.

The company expects to earn $704,600 over the next eight years in Enterprise Zone investment, new employee and job training tax credits through the upcoming Colorado Springs CHIPS Zone, state economic development officials said.

Proposal for Springs CHIP Zone approved

The council on Monday also unanimously approved the proposal that will establish the Colorado Springs CHIPS Zone. The request moves next to the state economic development commission, whose review and vote is expected in December.

Establishing a CHIPS Zone will allow Colorado Springs to compete for new investment and high-paying jobs by accessing state and federal incentives via the Colorado CHIPS Zone Act and the national CHIPS and Science Act, officials said in a news release this week.

The programs help support companies involved in semiconductor design, production and advanced manufacturing.

The Colorado Springs CHIPS Zone will also help retain existing advanced manufacturing companies that are already in town, city leaders said. If approved, it will go into effect Jan. 1.