East Texas companies are not creating the number of jobs required to receive tax abatement

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TYLER, Texas (KETK) — Almost 50% of the businesses that receive a tax abatement from Smith County did not create enough jobs last year, which is a requirement.

In some cases, companies fell far short of their goal.

“These are speed bumps in the economic history of our county that we’re easily going to get past because this is a very resilient community and one that’s very independent and one that’s pretty innovative. When you have those innovate ideas coming out of businesses here you’re going to see a resurgence without question,” said Nathaniel Moran, Smith County Judge.

Each year, the county grants tax exemptions to companies that commit to spending money on improvements and creating at least 25 full-time jobs.

When the company does not meet its job creation obligation, the abatement is lowered to match the percentage of jobs they created compared to what they committed to create.

Smith County offers abatements to Dragline Service Specialties, GG Distributing, Jasper Ventures warehouse, John Soules Foods, the Sanderson Farms processing plant and Wastequip.

The county also offers tax abatements in cooperation with either the cities of of Tyler, Whitehouse or Lindale to Estes McClure & Associates, Fresenius Medical Care, Hiland Dairy, Homeland Title, the offices of Jasper Ventures and the hatchery of Sanderson Farms.

Dr. Felicia Herndon, Tyler Economic Development Council executive vice president of Finance and Operations, presented the annual abatement report to county commissioners this week. The report informs the commissioners if each company met its requirements.

As a group, the companies invested $340 million on equipment or expansions, she said..

“They are all hitting the mark on their investment goals. They are actually exceeding the investments that they made,” Herndon said. “These companies kind of struggled in terms of their employment.”

She attributed the failure to reach the number of jobs required to a downtown in the economy and health concerns as a result of the pandemic.

“We have been doing this a long time and this is the first time I can remember that this number of companies were adversely affected and not able to meet their (job creation) goals,” Herndon said.

“They understand that there is a (job creation) compliance component,” she said. “When we (Tyler Economic Development Council) consult with the county judge on these projects and determine what they are eligible for, we make it very clear that this is a contract and these incentives require them to hire these new employees from within Smith County and make that investment in Smith County.”

Judge Moran said although unusual circumstances contributed to companies not meeting hiring goals, economic conditions are improving and the county will continue to “partner” with the companies in way that encourages economic growth.

“We are pleased to partner with these companies and we are hopeful this next year they will see an increase … And that is why we partner with them to begin with. Economic devleopment assists the community in many ways.”

According to the report:

  • Dragline Services was required to create 74 jobs but only created 49. A division of Wyoming Machinery Co., the company’s provides equipment used in the mining industry. Herndon said the mining industry is in decline and because of pandemic issues, the company enacted a hiring freeze last year.
  • Fresnius Medical Care, which provides kidney dialysis services, was supposed to create 345 job but only created 267. Herndon said Fresnius hopes to add 100 jobs before the end of the year.
  • Highland Dairy, was supposed to create 114 jobs but only created 98. Herndon said the company is now “back on track” to meeting job goals.
  • Homeland Title, was supposed to create 40 job but missed the goal by two. Herndon said that a project was delayed by permitting issues and weather issues.
  • Jasper Ventures, a gas processing plant, was supposed to create 209 jobs but only created 97. The company was hit with a decline in the oil and gas industry and faced staffing issues related to COVID-19, Herndon said. The company is now adding numbers to its workforce.
  • The office complex for Trane was supposed to add 469 jobs but only added 450. COVID-19 concerns contributed to Trane not meeting its goals, Herndon said.

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