Business sparks tax break talk

January 19, 2006
A new package of property tax incentives may be part of the deal to bring an automotive-related plant and 160 high-paying manufacturing jobs to Wilson County.
Though economic development officials have declined to comment specifically on the prospect — TACLE Seating U.S.A. LLC — corporate filings indicate the Nashville-East Logistics Center in Gladeville rests atop the recently formed automotive seatmakers' list of locations for a new 90,000-square-foot factory.
Information on the proposed tax incentive program for industries set to be distributed to the Wilson County commissioners later this month also suggests the company is taking a close look at the ALDI-anchored business park. The incentive program is based on giving breaks on the portion of county property tax paid by industries on their personal property.
Referred to as "Project TACLE" on handouts prepared for commissioners, the company would bring 160 full-time jobs to Wilson County — 30 salaried employees earning an average of $65,000 annually and 130 hourly employees paid $28 an hour.
An analysis of TACLE's economic impact to be distributed to commissioners at this month's meeting states the company's impact will extend beyond the borders of the Nashville-East Logistics Center.
"The company will directly employ 160 jobs. Our analysis shows that this will result in the creation of another 203 jobs indirectly within the county, for a total of 363 new jobs," Sharon Younger, president of Jackson-based consulting firm Younger Associates, wrote in the analysis. "Wages and benefits paid to these new jobs will result in an annual economic impact of $14.4 million, generating $548,383 in new local tax revenues."
New capital investments of nearly $18 million related to the project would have a one-time economic impact of $26.9 million and create $168,476 in new local tax revenues during the construction and set-up period, Younger noted.
Wilson County Joint Economic and Community Development Board Executive Director G.C. Hixson would neither confirm nor deny TACLE had settled on the Gladeville site. Instead, he said the information on the company was meant to serve as a "shining example" of how economic recruitment efforts could benefit from an established tax incentive policy.
Earlier this month, documents filed with the Tennessee Secretary of State listed the address of TACLE's registered agent as ALDI Boulevard, the main traffic artery through the Gladeville business park.
"(TACLE) is an example of the type of project that we're trying to recruit," Hixson said, noting the information to be provided to commissioners shows how the project would "relate" to a tax incentive program. "… This would be the result of a structured incentive program using TACLE as the example."
The tax incentive "playbook" for business recruitment — which is not slated for a Commission vote this month — will establish a "basic" economic incentive package, District 14 Wilson County Commissioner Rusty Thompson said.
Thompson, chairman of the county's Financial Management Committee, described the establishment of an incentive program as an "economic investment" in the future.
During a meeting last fall with Hixson, Thompson said the county finance panel inquired as to what strategy might bring more "high-tech, well-paying" jobs to the county.
"As a result of that meeting, he brought us back a draft of a PILOT (payment in lieu of taxes) plan that the finance committee reviewed last Thursday night," Thompson said. "… When we send our developers out into the industrial and commercial marketplace, they need to know when they go what arrows they have in their quiver. They need to know what tools they have to work with."
Hixson explained those tools would come in the form of guidelines and criteria regarding a company's eligibility for county government tax breaks on personal property such as conveyor belts and other machinery.
"It would be good for us to have something on the books that we can talk about so we really don't have to shoot from the hip every time," Hixson said. "… It's more of a structured incentive program. It wouldn't do anything on the real property, because we think the real property tax should go towards education."
He added incentives would likely mirror tax breaks approved by the Wilson County Commission in August 2003 for an expansion at Lebanon's SouthTec facility.
Under the SouthTec PILOT plan, the county tourism and development board owns the company's personal property while the company makes payments equal to 20 percent of the value of the equipment instead of paying traditional personal property taxes. The plan is set to expire in 2018, and at that time the county board will sell the property back to SouthTec.
Officials noted the PILOT program has no affect on real property taxes, which are assessed on land and buildings.
"We would offer them a tax incentive as far as their equipment investments go, if their investment in Wilson County met a predetermined set of criteria," Thompson said of the proposal.
Noting Hixson possesses a unique knowledge of such programs across the state because of his time with the Tennessee Department of Economic and Community Development, Lebanon Mayor Don Fox said establishing tax incentive guidelines is "long overdue."
"Obviously, (Hixson) knows what other areas are doing, and this would take us to the leading edge … with counties like Rutherford and Sumner," Fox said.
A rough version of the guidelines will be introduced to county commissioners later this month, and Thompson said the recruitment tool could be up for a County Commission vote in the coming months.
"Here in Wilson County we don't need to give away the farm. We have a great location … so we don't need to give away too much," Thompson said. "But, we do need a basic economic incentive package for these clients that we're trying to recruit. This package needs to be put in place, once it's been discussed and debated within the next three to four months."
Staff Writer Brian Harville can be reached at 444-3952 ext. 16 or by e-mail at brian.harville@lebanondemocrat.com.