Tax abatement approved for OSB manufacturer County agrees to 10-year plan for $280 million timber products plant

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LIVINGSTON – A 10-year tax abatement plan for the proposed Corrigan OSB manufacturing plant was given the green light Tuesday by Polk County commissioners.

During their meeting, the commissioner first held a public hearing on the creation of a reinvestment zone near Corrigan covering about nine square miles. They then approved the zone during their regular meeting.
The zone includes all of the land being purchased by the RoyOMartin Co. of Alexandria, La, to be used as the site of a proposed $280 million oriented strand board plant.
After setting up the reinvestment zone, commissioners then agreed to a tax abatement plan for the property within the zone.
Although some details still have to be finalized, the commissioners approved the general 10-year plan under which the county would waive all property taxes on the "eligible" items such as buildings, equipment and other improvements for the first five years, starting on the date the plant goes into operation. In year six, the county would waive 98 percent of the taxes, a figure that would decrease by 2 percent per year until it reaches 90 percent in year 10. On the 11th year, the facility will go on the tax role at 100 percent of its value.
"Even though we're granting a tax abatement, the county will see an immediate increase in its tax income because the land is not included," County Judge John Thompson said.
It was noted that the land in question would be purchased by the RoyOMartin Co. at a cost of $5 million or $2,500 per acre.
"Right now the land is on the tax roll based on timber values which I think are in the $300 to $500 per acre range. When the deal is finalized, it would go onto the tax rolls at commercial values – in this case $2,500 per acre -- which means we would experience an immediate increase in tax revenue," he added.
The approval of the tax abatement agreement Tuesday morning was a major hurdle in having the OSB plant come to Polk County but it is not the last. The Corrigan-Camden Independent School District's board was scheduled to consider a tax abatement plan for the plant at its meeting Tuesday night but results of that discussion was not available at press time.
Roy O. Martin III, president of the company, said he hopes his company will give final approval for the Corrigan plant sometime in January. He noted one hurdle outside the control of local officials is the EPA permitting process, which is taking longer than anticipated.
"I am very hopeful that everything will be completed soon and we can get started," he said.
In addressing the commissioners during Tuesday's meeting, Martin noted his company tried to locate a plant in Polk County 10 years ago but ran into problems with the Union Pacific Railroad. That issue has now been resolved because the company has decided to use trucks to ship the product produced by the plant rather than the railroad.
The plant would be the company's first in Texas and Martin said they want the facility here to take advantage of the strong Texas economy and its building market.
He also noted one of the major reasons his company is interested in coming to Polk County is the Corrigan-Camden school district. He said wherever they build a plant, they work with the local school system to help encourage young people to consider the timber industry as a potential career path and the Corrigan-Camden schools already have programs in place that will help train a future workforce.
In his presentation, Martin noted the plant would hire 160 "direct" employees to work in the plant at average wage of $50,000. However, the number of indirect jobs created by the plant would include about 250 loggers, about 200 truck drivers and 50-75 maintenance personnel.
He added that over time, the 160 direct jobs at the plant could expand.
"We have a plywood plant in Chopin, La. and when we went in there, we promised them 300 jobs. Today we have 700 people working there."
Martin noted that the tax abatement granted that plant by Natchitoches Parish expired in 2006 and today it is one of the parish's largest taxpayers.
During the public hearing held prior to the commissioner's regular meeting, only one person spoke against offering the company tax abatement.
Rick Andrews of Onalaska said that while he favors having the company come to Polk County, he believes they should not be given "special treatment" and should pay taxes like everyone else.
"All taxes should be assessed equally," he said. "I believe a tax abatement would shift the burden of taxes onto other taxpayers."
Other speakers including Claude Thomas, Marlin Hughes, Corrigan-Camden School Superintendent Sherry Hughes, County Judge-elect Sydney Murphy and Jim Johnson all voiced strong support for offering a tax abatement plan.
Thomas noted the county also would benefit through an increase in its sales tax income generated by the increase in the local workforce.
"It will benefit everyone," he added.
Marlin Hughes noted that the plant would also allow more of the local young people to remain here. He noted that many area students are forced to leave as soon as they graduate from high school in order to find jobs.
"In the long run, this will benefit Polk County in many ways. It will not just bring in jobs, but it will bring in families," he said.
Sherry Hughes said she has been working with Martin and others on the tax abatement and other issues associated with the plant coming to the Corrigan area and she sees major benefits for the Corrigan-Camden school system.
Murphy, who will sworn in as the new county judge on Jan. 1, said she sees tax abatement as an investment in the future of the county. By helping attract an industry such as the Corrigan OSB plant, the county will help create needed jobs.
In his remarks, Johnson simply pointed out that if Polk County failed to grant tax abatement, there are other locations that would jump at the chance in order to attract a major manufacturing plant.
Other business
During the meeting, commissioners also:
-- Cancelled their Dec. 23 meeting due to the Christmas holiday and rescheduled the Tuesday, Jan. 13, 2015 meeting to Wednesday, Jan. 14. Thompson explained that commissioners would be in Austin on Jan. 13 for the opening of the 2015 legislative session.
-- Approved the purchase of computer equipment for the sheriff's department at a cost not to exceed $39,380 and for the county clerk's office at a cost not to exceed $11,400.
-- Voted to formally terminate a contract with the Committee to Save Dunbar regarding the management of the Dunbar Community Center. Thompson noted the county has spent almost $1 million to renovate and upgrade the building and he felt the county should have more control over the building and its maintenance. The committee will remain as an advisory group regarding the Dunbar center.