- Real Estate
- Paris Flash
A committee that has recommended that the City of Paris, Lamar County and Paris Junior College end a policy of granting 10-year, 100 percent tax abatements to new industry is scheduled to hear this afternoon from at least three businessmen who don’t want the change.
Steve Gilbert, executive director of the Paris Economic Development Corporation, gave the PEDC an update last week of the Tax Abatement Committee’s proposal for a new abatement schedule that would put capital investment on the tax rolls sooner.
But he delayed until the PEDC’s next meeting, scheduled for 3 p.m. Tuesday, a vote on the new abatement policy. That will allow the abatement committee to meet with concerned businessmen at 4 p.m. today at the Depot, Gilbert said.
“Several of the elected officials received calls from some of our business community, and we have scheduled a meeting with some citizens and business people who just want some additional input and thought into the process,” Gilbert told the PEDC last week during a special called meeting that was primarily devoted to a review of PEDC policies and procedures.
On Sept. 13, the Tax Abatement Committee suggested a five-year abatement schedule for companies proposing to make at least a $1 million capital investment, with an abatement of 80 percent of taxes in Year 1, 60 percent in Year 2, and 40 percent in Year 3, Year 4 and Year 5.
The abatement would be increased by 20 percent per year if the project creates a minimum of 10 new jobs. That would make the abatement 100 percent in the first year, 80 percent in the second year, and 60 percent in the third, fourth and fifth years.
Any company proposing to invest more than $100 million or bring more than 225 jobs would be individually negotiated, basically “whatever it takes to get them.”
Tuesday, the tax abatement issue will again be before the PEDC — “to discuss and take action on the proposed revision to the current Tax Abatement Criteria as instructed by the Paris City Council at its June 24, 2013 meeting.”
Gilbert said: “So we’ll have one more discussion about this, with a goal to try to agree on a consensus, and then take this forward to the City Council, to the County Commission, and to the PJC Board of Regents.”
The Tax Abatement Committee is comprised of one person from each of the City of Paris (City Manager John Godwin), Lamar County (County Judge Chuck Superville), Paris Junior College (President Pam Anglin), plus Gilbert and the chief appraiser of the Lamar County Appraisal District (Jerry Patton).
“I’m real glad these local business people decided to bring their argument to this meeting, to the committee meeting, instead of to the broader board meetings — commissioner, the council, the PJC regents,” Superville said after last week’s PEDC meeting.
“It’s much better for them to come and be involved at the beginning, where it’s being planned and written and drawn, than to come back and criticize the finished product,” Superville said.
He declined to identify the businessmen in advance of the meeting.
“Their big concern is, they want to make sure we are doing everything we can to attract capital investment to Paris and Lamar County,” Superville said at last week’s PEDC meeting. “We know that if a company makes a $50 million capital investment here, we’re pretty sure they’re not going to be leaving.”
Mayor AJ Hashmi said he favors one policy for new industries and another for existing manufacturers.
“You don’t have to have the exact same policy for both. You can have a very different policy because, you know, we are going to support Campbell Soup, we are going to support Kimberly Clark — we want to support them and do whatever it takes,” Hashmi said.
Gilbert’s survey of other cities in Northeast Texas indicated that if Paris were to adopt the proposed new rules, the only city that might offer a better deal to new industry would be Sulphur Springs.
Hashmi asked that Gilbert broaden his survey to include other Texas cities, “because it’s not just a competition between Paris and Sulphur Springs.”
The mayor added: “I think we should also look at what other cities in Texas are offering, so that (a prospective new industry) doesn’t come to Paris because some other city that we didn’t look into offered them something better.”
Hashmi said “I’m the one who completely supported this,” the rollback from the 10-year, 100 percent abatement, “but I want to change my mind on it just a little bit and see what other cities are doing. Because the last thing we want to do is say, OK, this is our policy, and the next thing we know somebody went 200 miles away from us because they are not happy with this policy.”
Paris City Councilman John Wright, who was also at last week’s PEDC meeting, said of the businessmen:
“I don’t think we ought to take dictation, but I think we ought to listen to them. And I think citizens ought to have a representative here also, because we know this, that everything that’s given that affects the rate, the citizens have to pick up the difference. If big industry pays nothing, somebody has to pick up the slack. There’s no free lunch.”
Superville said the businessmen who asked for today’s meeting “are gentlemen that have been around a long time, and a long-time policy of the PEDC has been to give these 100 percent, 10-year tax abatements, and they felt it played to our strength, that we’re out here in Northeast Texas and we have to offer whatever we can offer.”
The county judge added:
“We have had a successful industrial development over the years and decades, and they’re very concerned that any kind of change with the mechanisms that helped attract capital to Paris and Lamar County could be looked at very, very carefully before we change anything, that we should not necessarily tinker with success.”
To the extent that truncating that 10-year period and lowering the percentage of those investments might discourage capital investment, “they’re concerned about that,” Superville said.
Weighed against that is the concern of some that the three taxing entities are”giving away the farm” and by waiving all taxes for 10 years, local government is not directly reaping any benefit.
“The counter argument to that,” Superville said, “is that we are receiving an indirect benefit by creating and/or retaining jobs, and the other businesses that feed off of that capital investment, and employees that are paying sales taxes locally.”
After the PEDC’s vote Tuesday on the abatement policy, it would be forwarded to the City Council, County Commissioners, and PJC Regents.
The new abatement policy would go into effect once all three governing bodies have given their approval.
By Charles Richards, eParisExtra