Friday, 02 September 2011 14:45

Polyplex receiving $2 million from state, local entities

Decatur Daily
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A 13K per job plant payout
Polyplex receiving $2 million from state, local entities

The state added $1.15 million to local incentives in the successful effort to lure Polyplex USA to Decatur, according to documents obtained this week.

Assuming it meets all construction and employment milestones, the company will receive about $2 million in direct benefits from state and local entities, or about $13,000 per job created.

The company also will receive an abatement of sales-and-use taxes during the construction period of about $5.75 million and an abatement of property taxes over 10 years of $5.47 million.

“We sure need the jobs,” said Abott Wood, team manager at Decatur’s Alabama Career Center. “There’s desperation all around. And when those employees spend money, they also create other jobs. There’s a multiplier effect.”

Company officials announced in July that the two-phase, $187.1 million project — to be located at Mallard-Fox Creek Industrial Park — will have 100 employees by the end of 2012. When it completes the second phase in late 2015, officials said the number of employees will grow to 150. The company plans to relocate its U.S. headquarters to the site.

The polyester film plant is under construction on a 42-acre tract purchased from Steel Technologies for $1.7 million.

One of the local incentives was clearing of trees and stumps from the previously wooded site. Morgan County, with assistance from Decatur, finished the job this week at an estimated cost of $200,000, although $16,000 from the sale of the timber will offset some of the cost. County Commissioner Jeff Clark said county workers removed about 2,000 trees.

Jeff Hudspeth, general manager of Polyplex, said Phase 1 of the plant remains on schedule. The next step, he said, will be to solicit bids for the mass-excavation grading of the land.

A team of Polyplex workers will locate in Decatur to supervise construction activities during the next six weeks, Hudspeth said.

The decision on how much in incentives to offer a company focuses on three primary factors, said Jeremy Nails, president of the Morgan County Economic Development Association. Local economic officials look at whether the company is a good fit for the community, whether it offers wages at or above the average local wage, and the county’s unemployment rate.

“It’s a good fit for the community,” Nails said. “Chemical-related companies are one of our target sectors. They would benefit from the infrastructure we put in at Mallard-Fox Creek Industrial Park, because they are a rail user and a potential port user.”

Polyplex’s fit with the community was enhanced, he said, because the company is a potential customer of BP Decatur. BP makes a raw ingredient that Polyplex needs for production of its plastic film.

Polyplex wages will average about $23 per hour, above the $17.30 county average, Nails said.

The county’s unemployment rate in July was 9.7 percent, which is higher than the national average.

The agreement between Polyplex and the state requires the state to pay the company $500,000, provided the company has employed 100 people at an average wage of at least $15.23 per hour by Dec. 31, 2012.

The state will pay another $500,000 to the company if it completes a planned second line by Dec. 31, 2015, with total employment of 150.

The board of the Morgan County Industrial Park and Economic Development Cooperative District also approved $350,000 in local cash incentives over seven years, provided Polyplex meets milestones similar to those in the state agreement.

The payments come from the Tennessee Valley Authority in-lieu-of-tax payments otherwise payable to Morgan County and its municipalities.

The Morgan County EDA agreed to seek $200,000 from the Decatur City Council as a reimbursement of money Polyplex pays for building permits, and to reimburse the company up to $75,000 for charges relating to hook-ups for water, fire and sewer utility services.

State law prohibits school taxes from being abated for industrial recruitment. The Decatur Industrial Development Board estimates Decatur City Schools will receive $506,500 a year in property taxes from the project, with Morgan County schools receiving $50,300 a year.

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