Sanderson Farms is looking at three locations in Smith and Wood counties - one for a poultry processing plant, one for a hatchery and a feed mill and rail yard - for a $200 million project that could bring as many as 1,700 jobs to East Texas.
In a press conference Monday, officials said they couldn’t list the exact sites, since real estate negotiations still are taking place, but they will likely include a hatchery site in the Winona area in northeast Smith County, a plant near Interstate 20 and Farm-to-Market Road 2015 in the Lindale area and a rail site near U.S. Highway 80 near Mineola.
The project is dependent on a number of tax abatement proposals and incentives that will total somewhere near $18 to $19 million, according to Tyler Economic Development Council President Tom Mullins.
“And in exchange for that, we will see an estimated economic impact of $1.43 billion over the first 10 years,” Mullins said. “I think that’s a pretty good bargain.”
Mullins said the success of John Soules Foods, which is one of Sanderson Farms’ largest non-retail customers, helped attract the poultry processor.
“They have looked in other parts of Texas, but John Soules Foods got them to focus on us,” Mullins said.
Local property tax abatement is a tool that communities use for economic development. Under a tax abatement agreement, a taxing entity (in this case, Smith County) agrees to not collect property taxes for a period of time, as a way of encouraging an employer to relocate or expand a facility. If a company fails to follow through on its side of the agreement - usually in the number of jobs created and the amount of money spent on expansion and new equipment - then the agreement is void.
Under Texas law, public school districts can’t offer tax abatement to private companies.
An example of a successful tax incentive agreement is the Target Distribution Center in Lindale, a $36 million project built in 1997 with the help of tax abatement; it brought 1,000 jobs. That was a 100-percent property tax abatement for 10 years.
Details about the tax abatement packages for Sanderson Farms are not yet finalized, Smith County Judge Nathaniel Moran said.
“It will be something less than 100 percent (of property taxes abated),” Moran said. “And it will be for 10 years. But I really can’t go into any more detail.”
But he added that the entire project is “dependent on incentive packages.”
“We’re setting up to move forward with those agreements and get them passed. We’re confident that will happen, within the next 60 days,” he said.
Other incentives will include help from the state on transportation infrastructure needs; Mullins mentioned the interchange at I-20 and FM 2015, which needs to be widened and the sharp curve made more gradual for the convenience of big trucks.
And there will be some training funds from the state as well, he added.
Mullins emphasized the quality of jobs that Sanderson Farms provides, complete with benefits and higher-than-average starting wages.
“This is a company that cares about its employees,” Mullins said. “Their starting wages are $2 to $3 higher than industry average. And the health package is impressive. After someone works there for 90 days, they are eligible for their insurance package, for themselves and their families.”
According to a fact sheet provided by the company, vacation time is offered based on tenure, and there are eight paid holidays per year. The company offers compensation for jury duty. There’s a company-matched 401(k) retirement plan, and an employee stock ownership plan.
Mullins also addressed environmental concerns. It’s true that in the past, some poultry processing plants have had problems, both environmentally and aesthetically. They were dirty and they smelled.
“But that’s based on 20-year-old technology,” Mullins said. “We took about a dozen people to the Sanderson Farms plant in Palestine, and we stood right next to the treatment ponds (at the hatchery). There was no smell.”
Although the Lindale area is already experiencing an economic boom, with new industry and retail going in, county officials said the Sanderson Farms project location near Winona could ignite something like that in the northeast part of the county, which has lagged behind economically.
A fact sheet provided at the press conference said families moving to Winona, for example, could result in more than 40 new students.
Those 1,700 new jobs with Sanderson Farms Inc. don’t include indirect employment, Mullins added.
As many as 80 new growers will be needed in the East Texas area to supply the new facility, officials have said.
The next step in the process is closing on the real estate deals, and finalizing the incentive packages, officials said.
When the tax abatement portions are ready to be made public, there will be public hearings, Mullins said.
“We’re going to have representatives of the company on hand for those meetings, and you can ask them questions,” he said.
This story will be developing.