EDC considers tax abatement for a new business

A shipping and fulfillment company is considering relocating from Cedar Park to Liberty Hill and is seeking a five year break on property taxes.

Members of the Ecomomic Development Corp. Board of Directors discussed on Tuesday the possibility of granting a $50,000 tax abatement to Outlander Fulfillment and Logistics Worldwide. If approved by the EDC Board and ultimately by the City Council, the abatement would be spread over five years — an estimated $10,000 per year.

EDC Executive Director Greg Boatright, who also serves as Liberty Hill’s City Manager, said the company processes orders for customers and ships products worldwide. Companies that do business with Outlander send their products to them, which are then shipped to customers buying the products.

Boatright said Outlander is considering purchasing property at 14700 SH 29, which consists of office space plus a 20,000-square-foot warehouse. If the purchase proceeds, the company stated that it would build an additional warehouse on the property within two years and will hire 10 local employees immediately.

Because of the nature of the business, Outlander would not pay sales tax and would not generate revenue directly for the City of Liberty Hill.

However, Board member John Johnston said additional employees and their families would spend money in Liberty Hill. And possibly more important, the activity surrounding a new business opening and adding facilities could generate interest from other companies that might consider locating here.

“Just the activity of having a new building built in Liberty Hill would be a boost to people, and might signal to others that something is happening here,” Johnston said.

Brian Butler questioned whether the tax abatement would be opening the door to other businesses seeking  similar treatment without generating sales tax revenue.

“Eventually, we have to generate revenue to pay for the infrastructure,” Butler said.

“It is a net drain on our funds,” said Frank Spinosa. “I want to be astute about how we spend it (EDC funds).”

“To me, that’s what EDC is about,” said Boatright. “Recruiting business is our primary charge. We’ve been sitting on money, and this is exactly what it is intended for.”

Board members agreed that if the negotiations continue with Outlander, the company should be required to connect to city sewer.

A representative from the company was expected to attend Tuesday’s EDC meeting, but was not present. The Board agreed to table the item for future discussion.

Also Tuesday, the Board held a workshop and continued its discussion of development of a website and business directory.

Randy Hodges of HK Computers was present to answer questions from members about how the website would work, and how it could connect to other economic development websites as well as the City’s website, which Hodges also designed.

Although no vote was taken because the discussion was held during the workshop, the panel agreed to allow Boatright and Hodges to work together on a plan for website development and bring it back to the Board at a future meeting.

Spinosa said the Board will begin quarterly reviews of the EDC budget beginning in January. He said it is important that members know where the money is being spent.

The Board agreed to hold another Meet & Greet for local businesses in early 2014 at Dahlia Cafe. Dates and event details will be decided at a future meeting.

Board members not present were Vicki Brewer and Cathy Cantrell, who Boatright said submitted a letter of resignation from the Board.

Boatright said the Internal Revenue Service had recently notified the EDC that it had waived late filing fees in the amount of $3,280. He said in previous years, tax returns for the EDC were not filed in a timely way and late fees had been assessed. However, after a plea from the City to waive those fees, the IRS resended the order.