Victoria City Council gives initial OK to Caterpillar supplier

Melissa Crowe By Melissa Crowe

April 16, 2013 at 9:03 p.m.
Updated April 16, 2013 at 11:17 p.m.

Victoria City Council is saving a spot for the first resident at Lone Tree Business Park No. 2.

Ken Garner Manufacturing - Victoria Operations Inc., the first Caterpillar parts supplier in Victoria, received unanimous initial approval Tuesday on its 16-acre site at the business park on Wayne Watkins Drive.

The council must vote one more time before the site's designation as a reinvestment zone is final. This is the first step to granting a tax abatement.

Councilman Emett Alvarez said the seven-year phase-in abatement will apply only to city taxes, not Victoria Independent School District or Victoria College.

Furthermore, the company will pay full taxes on its property, valued at $15,000 an acre, or about $240,000, according to information from Victoria Sales Tax Development Board.

"Ken Garner is evidence of the ability to attract a manufacturing company to the area and have suppliers follow," Alvarez said. "Given the investment and job creation, it becomes a multiplier for development."

About 30 new positions are expected at the company during start-up, with the potential for up to 100 production and management positions by 2017.

The City Council is expected to vote whether to approve the tax abatement in a few weeks.

Victoria Economic Development Corp. Vice President Adrian Cannady presented the matter to the council.

"We're extremely excited to bring before you our first Caterpillar supplier into that Lone Tree 2 Park," he said.

The company estimates the first part of the project will invest about $10 million and be completed in late 2014, according to a news release from VEDC.

The rest of the project will invest an additional $4 million with a target completion date in late 2015.

The tax abatement would apply only to the $10 million first phase, Cannady said.

He said the business has been interested in Victoria since Caterpillar made its announcement almost three years ago.

Mayor Will Armstrong congratulated VEDC.

"You and Mr. (Dale) Fowler both have shepherded this announcement for some time," Armstrong said.

The sales tax development board approved an agreement with Ken Garner Manufacturing earlier Tuesday. That agreement is part of the incentive package used to encourage the company to locate in Victoria, Cannady said.

Along with purchasing the land at-cost, Cannady said the agreement also includes the tax abatement and help with construction permit fees.

"They looked all along the state of Texas," he said.

Councilman Joe Truman praised the deal.

"VEDC did a great job," he said. "The whole idea of why we have the business park is paying off."

Councilman Paul Polasek was absent.



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