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- Paris Flash
About a dozen business leaders — speaking separately but almost as if one voice — argued Monday that the Paris Economic Development Corporation should continue to be aggressive in courting new industry.
After an hour-long meeting, they suggested that the newly formed Tax Abatement Committee tweak the current policy at best, staying true to 100 percent abatements for at least seven years and allow for above and beyond negotiations for anyone considering bringing to Paris a capital investment in the area of $20 million or more.
For the past several years, PEDC Executive Director Steve Gilbert said, companies interested in making a capital investment of $250,000 or more have been offered 100 percent abatement for 10 years.
The Paris City Council balked in August, when a similar deal came before that body on behalf of Potters Industries. After long debate, the council approved the deal but instructed the PEDC to work out a different arrangement, with less than 100 percent abatement and over less than 10 years.
Over the past several weeks, Gilbert said, a new proposal has emerged:
Carl Cecil of Liberty National Bank said $100 million is too high, “and I think seven years should be the minimum on the abatement.” He said Gilbert should be allowed to negotiate with anyone a capital investment of $25 million or more.
Mayor AJ Hashmi said he favors two separate agreements — negotiation to do whatever necessary to keep and promote new investment by existing industry like Campbell Soup, Kimberly Clark, Turner Pipe and Skinner Baking, but only what is necessary to attract new companies.
Hashmi said abatements are a consideration, but not the only reason new companies come into a community and that Paris should be competitive with other Texas cities of comparable size without going beyond, whatever that may be.
“I agree that it is more important to work with existing industry that we have here, that they’re more important than new ones coming in, because the economic impact of somebody pulling out is terrible,” said Jim Bell of Nathan Bell Realtors.
But Bell and other business leaders felt the sky should be the limit with prospective new industries as well.
“I don’t really care what other people offer. We need to offer the best thing we can,” argued Curtis Fendley, a former mayor himself and current president of the Paris Junior College board of regents.
“Why are we changing something that isn’t broke?” someone else asked.
“That’s exactly right,” said Fendley, an agent with Pierson & Fendley Insurance. “You don’t want to be as good as the next guy, you want to be a lot better. That’s what we need to do.”
Greg Wilson, with Lamar National Bank, said industries looking for new places to locate are interested in low utility costs, a suitable work force, and access.
“All these are essential, but a lot of these things, we have no control over. If someone wants water, and it comes down to us and Sherman, Lake Texoma is bigger than Pat Mayse Lake. Likewise, if it’s between us and Sulphur Springs or Greenville, they’re on the Interstate,” Wilson said.
“We have to be competitive where we can be competitive, and one of the things we do have control over is tax abatement. If that’s what it takes, then we need to be as aggressive as we can possibly be on that front,” Wilson said.
Charles Lynch, former plant manager for Kimberly Clark, said abatements were an important consideration, but not the only one.
“There are many things you look at. Tax abatements are a consideration, a part of the equation, but it’s not always economic. It is important whether the community is considered an ally. Or not. That absolutely has an impact,” Lynch said. Relationships developed along the way also are important, he said.
“Paris has some issues from a location standpoint,” Lynch noted. “You have a workforce here, but companies that require a lot of technical support, typically you’ve got to transfer that in.”
Asked about the length of the abatement, Lynch suggested staying with 10 years.
He was not a big fan of using a requirement for new jobs as a factor in getting up to 100 percent abatement, noting that as companies automate, “additional investment makes fewer jobs, not more.”
“I’d take a real hard look at that,” Lynch said.
Kirk Lee of Mount Pleasant, president of Guaranty Bond Bank in Paris, said:
“I would personally be very hesitant to monkey with the system that you have in place, because it’s working. As an outsider, I will tell you that this is one community out of 12 that we do business in — from here to Texarkana to Longview to College Station — and I can tell you that over the last five years, Paris has weathered the storm better than anybody your size.”
Barney Bray, a contractor, said: “It looks to me like our economy in Paris the last three years compared to a lot of the rest of the world is pretty decent.”
He mentioned a prominent car manufacturer and said, “They don’t change the body style very much. They just kind of refine it. Maybe we need to look at tweaking it a little bit, but we don’t have to cut it in half.”
Bray said that sends a bad message to a corporate headquarters when it is told by the local manager that Paris planned to cut abatements in half.
“Just being very candid,” Gilbert said, “with the financial constraints that each of the (governing bodies) have, part of the discussion was: ‘Instead of giving 100 percent for 10 years, with a pretty low threshold of investment of $10 million, can you revise the policy so that the taxing jurisdictions start to see some revenue from the new investment sooner?’”
Gene Anderson, finance director for the City of Paris, spoke to that issue.
“Our taxable value is actually lower than what it was four years ago. Despite that, over the last 10 years, the city has lowered the tax rate almost 28 percent, so we’ve been trying to do all we can to make Paris an attractive place to come,” Anderson said.
“But at some point, we’ve got to start increasing our operational revenues in order to continue to effectively function,” he noted.
Anderson said with the continual push to lower taxes and to grant abatements to new or expanding industry, the city has been basically operating on a fixed income, unable to give raises to employees or to increase services.
“I just want you to know, from a taxing entity standpoint, we’ve squeezed ourselves in trying to help industry. We are losing some of our best employees to the private sector — mechanics, police officers, firefighters. And it’s not just those departments, it’s every department,” Anderson said.
Bray said that doesn’t take into account how much the city’s industries mean to the local economy.
“If you can just imagine, driving around the loop, that there’s nobody at Campbell Soup, nobody at Kimberly Clark, nobody at Turner Pipe — what do you think would happen to your tax base, and to your income, sales-wise and everything else?” Bray asked.
“It’s a whole lot bigger picture than just this consideration from the tax stuff you’re talking about. If we don’t have any businesses, we don’t have kids going to our school districts. How much sales tax have all their payrolls and all their employees created for the city?” Bray asked.
By Charles Richards, eParisExtra