(Seguin) — The city’s economy continues to grow. The Seguin City Council on Tuesday approved a performance agreement that will allow a new manufacturing company to set up shop in Seguin.
Seguin Economic Development Director Josh Schneuker says Premium Waters, LLC will bring new jobs to the community and make a large capital investment, with the construction of a new facility.
“They are a bottled water manufacturing company. They’re based out of Minneapolis, MN. They operate in 21 locations across the US, and they do both private label and branded products,” said Schneuker.
Schneuker says city officials have been working with this company for months, and they are pleased to be able to bring this project to Seguin. He says the company is making a sizable investment in Seguin, and they will be great addition to the city’s economy.
“The scope of the project that they’re proposing here in Seguin is the construction of a new manufacturing facility on a 27-acre site, located at Freeport Way and Crossroads Blvd — within the Crossroads Industrial Park area. The project will represent a total capital investment of at least $80 million. And just to put that into context with some of the recent projects that we’ve had, Maruichi (Stainless Tube Texas Corporation) was a $65 million announced project;. Niagara Bottling, at the time, was a $50 million announced project; and Teijin (Automotive Technologies) was a $55 million announced project. So this would be one of the more capital-intensive projects that we have had in recent years,” said Schneuker.
In addition to building its $80 million production facility, Schneuker says the company also is bringing new jobs to the community. He says these are good jobs and will help to boost the wages being offered here locally.
“The company expects to create at least 60 new jobs over a three-year ramp up period. These jobs will create $3.6 million in new total payroll at the facility. So this is on average about $60,000 in average annual wages that will be paid out at the facility. This is something that we’ve been working hard to recruit companies that are going above and beyond what the county average annual wage is currently, and that’s right around $51,000. So this will greatly exceed what we’re seeing in the county, and really help boost some of the underlying income levels that we have currently in the Community as well,” said Schneuker.
The city is not offering Premium Waters a tax break for bringing its facility to Seguin. Instead, Schneuker says the city, through its Seguin Economic Development Corporation, will be offering a cash incentive of $150,000.
“As a component of this project, we are proposing an incentive from the EDC. This incentive will be formalized through a performance agreement. The incentive amount that the company can realize here is $150,000. This is going to be a performance-based incentive, so no funding will be paid up front. The company has to meet their performance obligations in order to be paid out the full value of the incentive,” said Schneuker.
There are several benchmarks that the company must meet before it sees any of the proposed financial incentive. Schneuker says they will be monitoring the company’s progress on its building and on its job numbers once the facility opens.
“So, we have evaluated this project and the potential economic impact. Obviously, this is at least $80 million coming onto the tax roll. There is no tax abatement being proposed to this project. The only incentive is the EDC performance-based cash grant. So, this will be on the tax rolls at full value. We expect over a five-year period that the project will help generate over $2 million in new ad valorem tax revenue to the city, and close to $4 million over a ten-year period. Obviously, with the wages as well, we are checking off that box in order to try to recruit high wage, high demand jobs to the community. And then looking on the utility side of things, this company will be located within all three city utility service areas. This will be a very substantial water customer, (and) electric customer and wastewater customer as well. So obviously you have, impact fees and utility revenues associated with that project as well,” said Schneuker.
Schneuker says the company will need to find employees with the necessary skills to help maintain the facility. He says that makes them a perfect candidate for the Texas Federation for Advanced Manufacturing Education, or TX FAME program. Texas State Technical College is working with local officials and manufacturers to offer paid, apprenticeship-style opportunities as part of the FAME program. He says Premium Waters will be a good fit for this program and for this community.
“I think one of the most important things I want to point out with this company, as we’ve been talking to them, is that a lot of these positions that they will be hiring for are going to be maintenance positions. There’s a lot of automation in these facilities. There’s a lot of investment on the equipment side of things. So, they need to make sure that they have the labor force there to ensure that equipment is running properly at all times. In the event that it does go down, they want to make sure they have the right individual there to get that equipment up and running. That is why we anticipate them to be a huge player in our Texas FAME project, that we’ve been working so hard on, with the first cohort (of students) scheduled to start in August of 2023. The company has already been engaged with us in conversations related to that, and we do anticipate once they start moving forward with the project here in Seguin, that they will sign on as a member company associated with the with the Texas FAME here,” said Schneuker.
While there are no local tax break incentives being offered to the company, the city council on Tuesday did approve a nomination that would allow the company to receive some tax relief from the state.
“The Texas Enterprise Zone program is a state sales and use tax refund program, and it is designated to encourage investment and job creation in economically distressed areas. The census tract where Premium Waters will be building their facility is designated as an economically distressed area. A component of going through the application process for the enterprise zone program, which is handled by the Office of the Governor and the Comptroller’s Office, is a nomination by the local jurisdiction, and that’s what we have in front of you tonight — is to nominate Premium Waters as an enterprise project,” said Schneuker.
The council unanimously approved both the performance agreement with Premium Waters and the nomination for the Texas Enterprise Zone Program (EZP).