Upshur County: Commissioners court grants tax abatement

Published on Thursday, 1 May 2014 23:39 - Written by Phillip Williams Special Correspondent

Upshur County Commissioners Court granted a conditional tax abatement Wednesday to Steel Country Threaders of Upshur County Inc., an Ore City area firm which County Judge Dean Fowler said is expected to eventually provide 140 jobs.

The court exempted the firm from paying 100 percent of Upshur County property taxes for two years, 50 percent the third year, and 25 percent the fourth year on condition it provide at least 100 jobs by May 2015, and maintain that number. The action does not exempt the firm from paying school property taxes.

The business is constructing a new pipe heat treatment facility, Fowler said.

Precinct 2 Commissioner Cole Hefner said that if the firm improves the property by $10.5 million as planned, its county tax bill without an abatement would be about $54,000 annually. Ron Bedard, SCT’s President and Chief Executive Officer, replied that “you’re going to get a large chunk back” from his firm’s customers of “what you’re giving us.”

Lee Simpson, SCT’s Chief Financial Officer, told the Tyler Morning Telegraph the county would receive additional tax from his firm’s investment as well as from the inventory of pipe which the SCT’s customers would maintain on site.

Bedard contends he needs the abatement in order to help his firm compete with Houston-area businesses which treat pipe that comes into the Port of Houston. His prospective customers would be sending the pipe 235 miles to the Ore City area instead of five miles to a Houston treatment firm, thus incurring $30 per ton in additional freight costs, he said.

Simpson told the court that Wednesday was the first anniversary of his firm buying Steel Country Threaders, which had threaded pipe near Ore City, and that the new ownership has been laying out a new plant which will include a heat treatment facility.

The firm now has 26 workers, Bedard told the court.

Besides purchasing the threading operation, Steel Country Threaders bought 20 more acres nearby. It has “sourced local labor where we could” and plans to be operational within two months, eventually providing 140-150 jobs in direct employment with an estimated annual employment expense of about $6.7 million, Simpson said..

A separate company will be on site to inspect pipe, he said.

In a related move, after holding a short public hearing on the issue, the court voted to establish a permanent “Ore City North Reinvestment Zone” on the firm’s 42-acre site on U.S. Hwy. 259 north of that city.

Fowler said establishing the zone, which is near the intersection with Texas Hwy. 155, was a necessary legal step in creating the tax abatement.

During the 4-minute hearing, Upshur County Democratic Party Chariman Dan Miles Jr. asked if granting the abatement was the only way to get the business to locate in the county. Fowler replied that SCT is providing a “pretty significant number of jobs” and that granting the reinvestment zone “sends a message. . .Upshur County might be a good place to come.”

Fowler noted that Gilmer-based Upshur-Rural Electric Cooperative is building a substation in the area for the firm because “that’s how much electricity they need.”