10-year tax abatement OK’d for facility
Posted: Wednesday, June 23, 2010 9:04 pm
By: John Brannon, Staff Reporter
By JOHN BRANNON
Two little words — “tax abatement” — caused quite a stir Monday at a regular meeting of the Obion County Commission.
Discussion, pro and con, lasted almost an hour.
The bone of contention was a resolution giving a major agribusiness — DuPont/Pioneer Seed Corn — a tax abatement over a 10-year period beginning in 2011.
After prolonged discussion, commissioners passed the resolution 17-4 and then passed a follow-up resolution about future negotiations with industry about tax abatement.
The county legislative body convened in the Circuit Court courtroom at the Obion County Courthouse in Union City. All 21 commissioners answered roll call. Commissioner and chairman Ralph Puckett of South Fulton presided over the session.
The tax abatement issue was one of several items on the commission’s business agenda. It proved to be controversial.
Here are the basic tenets of the issue:
• Bedford Dunavant, chairman of the Union City Industrial Development Board, presented the proposed resolution.
“They (DuPont/Pioneer) are asking for tax abatement on real and personal property here in the county,” he said. “They are asking for a 75 percent abatement the first five years and a 50 percent in years six through 10. It’s standard in the industry for bringing in business.
“I am estimating the total taxes of the county would have been about $5,000 a year. They will be paying close to $1,500. So it’s about $3,500 a year for five years, then $650 the next five years. It’ll begin in tax year 2011.”
• DuPont/Pioneer is building a $1 million research facility alongside Old Troy Highway near Belle Aire subdivision. Dunavant said it’s “three-quarters” finished.
“It’s not inside city limits,” Dunavant said. “When they were coming here (at first), it was going to be inside the city. For the building to go there, the area would have to be rezoned. So to avoid any construction delays, it’s easier for them to go just outside the city limits, which is 300 feet off the highway and construct it in the county. Then they will request annexation and let the Planning Commission of the City of Union City do whatever it has to do.”
• The research facility would provide 11 new jobs.
“They have a plot where they have been growing corn and doing research here since 1960,” Dunavant said. “They have certain fields where farmers grow different brands of corn. That’s where their genetic research is done.
“They have been doing research here and a lot of the strains that have made corn a viable crop in the South were developed here. Pioneer has owned a 90-acre tract there for years and has been farming it all along.
“There’s been a good relationship between Pioneer Corn and Obion County all those years.”
• DuPont purchased Pioneer Corn several years ago. Its headquarters is in Delaware.
Several commissioners seemingly came unglued when they learned the tax abatement issue with DuPont/Pioneer had been “in the works” about eight months.
The implication was that Dunavant brought them a “done deal” and the commission was expected to “rubber stamp” it.
Dunavant said that in his position as chairman of the Union City board, he tries to work with the county and the local Chamber of Commerce.
Tax abatements, he said, are traditional when negotiating with industrial prospects who signal an interest in relocating here. It’s all part of an incentive package, and it’s been done time and again.
“Goodyear. The ethanol plant. Blue Steel. The expansion of Williams Sausage,” he said. “It’s pretty common in the industrial realm that when you are recruiting an industry, they ask what incentives are there. It’s standard.”
Dunavant said it didn’t bother him that the commission passed its follow-up resolution about tax abatements for incoming industry.
“I think they were concerned we didn’t start with them from the very beginning,” he said. “We’d be more than happy to work with the county in any way and provide them this service.
“The (tax abatement) resolution passed. The building is under construction. We’re looking forward to their (DuPont/Pioneer) continued presence and even larger presence in Obion County.”
Obion County Mayor Benny McGuire said that when recruiting industry, Obion County competes with other municipalities and counties. “We have to give some kind of tax abatement to influence their decision to come here,” he said. “We need jobs. That’s what creates sales taxes and other things.”
Published in The Messenger 6.23.10