Friday, 01 July 2011 19:56

Tax breaks mean extra $5.6 million for local schools

Decatur Daily
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Three industrial building projects benefiting from the Decatur Industrial Development Board will generate $5.6 million in taxes for local schools over 10 years.

Details on the money for schools were released Thursday when the IDB voted to waive $9.8 million in other state and local taxes for the projects as an incentive.

Part of that benefit to schools will be immediate from taxes generated during the construction phase of the projects.

Estimated sales and use taxes during construction of the three projects, which are not abated for schools, total $773,000 for Decatur, Hartselle and Morgan County schools. Over the next 10 years, local schools also will receive $4.9 million in real and personal property taxes from the projects.

The IDB meeting showed the results of regional economic development. Two of the three companies — Independence Tube and Hexcel — were early occupants of Mallard-Fox Creek Industrial Park, created with money from Morgan County and all of its cities more than two decades ago.

Independence Tube was the first company to buy land at the park, although it did not begin building its plant until 2004. Hexcel — formerly Hi-Span — was the first company to build a plant there.

Hexcel Corp. will add an acrylic fiber line to its Mallard Fox Drive plant at a cost of $100 million.

The IDB agreed to abate $3 million in noneducational property taxes over 10 years and $1.8 million in Decatur sales taxes during the construction period. Company officials estimated the project will generate $278,000 a year in property taxes for Decatur City Schools and $34,000 a year for Morgan County schools.

The project will create another $462,000 in sales tax revenue during construction, which will be shared by Decatur, Morgan and Hartselle school districts.

“That’s a one-time shot that, especially in the next couple years, will be significant to our school systems,” IDB lawyer Barney Lovelace said. “Sometimes those kinds of numbers get lost, but it adds up in a hurry.”

The Hexcel expansion also will create 25 jobs, according to Hexcel Finance Manager Bright Bruorton. The company has 150 employees.

In the last six years, Hexcel has invested $300 million in its plant. The company produces PAN, a precursor of the carbon fiber used primarily in passenger jets and other aerospace applications.

Ascend Performance Materials LLC, formerly Solutia, also is expanding. It will expand the plant on Alabama 20 — outside Decatur — at a cost of $28.8 million. IDB voted to abate $421,000 in noneducational property taxes over 10 years and $2.7 million in state sales taxes. Ascend estimated the project will generate $156,000 in sales taxes during the construction period, which will benefit Morgan County, Decatur and Hartselle school systems.

The expansion also will create $488,000 in property taxes for local schools over 10 years.

Ascend expects the project to add between three and 10 new jobs. It has 233 employees and about 145 contract employees.

“This is a continuation of an expansion that got started last year,” plant manager Al Faulkner said. “It’s to expand our capabilities in chemical intermediates production for nylon 6,6.”

DuPont discovered nylon 6,6 in the 1930s. Its heat-resistant properties make it popular for under-the-hood automobile components.

“As the automobile industry has continued to move toward lighter, more fuel-efficient vehicles, there’s more plastic under the hood than there was a few years ago,” Faulkner said. “It’s replacing many metallic parts, and nylon 6,6 is a major player in that.”

Independence Tube is rebuilding its tornado-ravaged Mallard Fox Drive plant at a cost of $33.5 million. IDB agreed to waive $1.2 million in noneducational property taxes over 10 years and $616,000 in Decatur sales taxes during construction. As compared to closing the plant, company officials estimate the project will generate $111,000 a year in property taxes for Decatur City Schools and $14,000 a year for Morgan County schools. The project will create another $154,000 in sales taxes during construction, which will be split by Decatur, Hartselle and Morgan County school systems.

The company expects the project to permit it to retain its 76 employees.

Independence Tube President Rick Werner said an April 27 tornado destroyed about 80 percent of the building, collapsing many of its 14 overhead cranes, destroying its roof and damaging most of the structure. Employees avoided injury by taking refuge in concrete block rooms within the plant shortly before the tornado hit.

Fite Building Co. of Decatur built the plant. Jack Fite, its president, abstained from the IDB vote.

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