Trio of agreements highlight new frontier for local economy
By MIKE EDDLEMAN
Liberty Hill has been a new growth center in Central Texas for some time, with a City focus on making sure the local economic growth keeps pace with residential growth.
The approval of three new economic development incentive agreements in the last week is a strong signal that Liberty Hill is entering a new frontier in business growth.
The agreements with Heritage Ridge Investments, Golf Cart King and Tex-Mix Concrete come with limited investment from the City and Economic Development Corporation (EDC), but are projected over a decade to net the City an estimated $14.1 million to the general fund, according to EDC Executive Director Matt Powell.
“You’ve got an interesting collection of projects,” Powell said. “You’ve considered an employer and a manufacturer, you’ve considered infrastructure to allow some brand names to come in that people have been asking for and you’ve got a sales tax monster coming in. All three of these projects are beneficial in that they are diversifying offerings the City has.”
All three agreements passed through both the EDC Board and City Council. The sales tax revenue reimbursements for two of the companies ensure that the incentives are tied only to sales tax revenues those companies generate.
The Heritage Ridge development – located on property along eastbound SH 29 in front of Liberty Hill Junior High – is slated for seven to eight lots for food service and retail as well as a car wash.
“We have been working here in liberty Hill to bring to fruition a couple of client projects of ours,” said developer Mike Beevers. “This piece of property we now own we closed on in September. The primary client that brought us to this site is Starbucks. With any luck we will break ground (this week) with that facility.”
The developer has been working with City staff on the site plan and with a number of needed infrastructure upgrades that will be funded by Heritage Ridge, they approached the City about a grant to offset some of the investment costs.
“They’re definitely going above and beyond, not only in terms of a lift station, but there is also a hike and bike trail they are putting in,” said EDC Executive Director Matt Powell. “It’s going to be a nice-looking project.”
The grant is a $160,000 package, to be funded solely through EDC revenues – which come from local sales tax – comes with the requirement that the project be substantially completed in the next two years and a total of $1 million is invested in the project in that time.
Both Powell and Beevers pointed to this project as an effort to set a new precedent for development in Liberty Hill.
“The City of Liberty Hill has some unique challenges when it comes to development, that site in particular,” Beevers said. “The low-pressure sewer system that is predominant on SH 29 is a real buzzkill for national brands. We put in a gravity sanitary sewer collection and right now we are approved for a lift station that would collect it at an eight-lot level and that comes at a cost.”
Golf Cart King
Golf Cart King will be relocating its facility from Austin to Liberty Hill, and will be located just north of the QuickTrip at SH 29 and CR 214.
“They’re a terrific company,” Powell said. “Not only do they move a lot of parts, but they will also be doing the assembly of custom golf cart units, which can be very pricey. They’re very excited about having their own facility. They’re going to own this building and purpose-build this facility.”
The company will come to Liberty Hill with 23 jobs and anticipates up to as many as 41 total within a decade. The project is expected to see $6.5 million in improvements to build the new facility.
The agreement involves the EDC and City and includes employment incentives and sales tax reimbursements.
Golf Cart King will receive $2,000 per full-time equivalent position at the end of 2021, 2023, 2025 and 2027, up to $230,000 total with an annual cap of $50,000.
The EDC will pay Golf Cart King 60 percent of the EDC’s portion of the sales tax generated by the company over 10 years. The EDC earns one-eighth of a cent in sales tax for every dollar. The City will reimburse 50 percent of its one-cent sales tax revenues generated by golf Cart King for three years, then 33 percent for three years, and 25 percent in the final three years of the agreement.
The sales tax incentive to Golf Cart King is capped at $300,000.
The agreement expected to lead to the most revenue in the next decade for the City is with Tex-Mix Concrete, which is expected to bring as much as $30 million in sales tax revenues to a variety of entities.
“This is a 10-year deal, and over that time they anticipate doing somewhere in the neighborhood of $1.5 billion in taxable sales, which would mean a collection of right at $30.5 million on the two cents that would be coming in to the City of Liberty Hill and distributed various places,” Powell said. “Just the General Fund of the City would see a little bit north of $15 million.”
In addition to the City and EDC, sales tax revenues will increase for the library district, Emergency Services District #4 and the City road fund.
The new Tex-Mix location will be at the Vista at 29 business park, just west of Ronald Reagan Boulevard on SH 29 and will be the company’s primary sales and dispatch office.
Eric Bailey – who also serves on the EDC Board – has been with the company three and a half years and recently took over as CEO.
“It’s been a labor of love for a lot of people,” Bailey said. “Right now we’re based out of Leander and we continue to grow and have the need to expand, and my story was always that we need to recruit ourselves. If I couldn’t recruit myself, who could we recruit to Liberty Hill.”
The company is expected to have between seven and 10 employees.
Tex-Mix will be paid $2,000 per full-time equivalent job certified each year for the length of the agreement, with an annual cap of $24,000.
The EDC will also reimburse Tex-Mix 50 percent of the sales tax revenues generated on the company’s sales that would go to the EDC.
“By just sharing 50 percent of our eighth (of a cent) over 10 years, we would be sharing approximately $1.9 million,” Powell said. “It means we will also be keeping $1.9 million.”
The agreement stipulates the City will also share a portion of its one-cent in sales tax revenues. The first two years will be 80 percent, the next two 50 percent, the next two 40 percent and years seven and eight will be 20 percent. The estimated total in shared sales tax revenue from the City is $2.65 million, but if that amount is paid to Tex-Mix, the City will gain $15.25 million in new sales tax revenues as well.
Bailey abstained from voting on the agreement with Tex-Mix, and did not participate in any discussions of the proposed agreement among the EDC Board, according to City and EDC Attorney Tad Cleaves.
“When serving on any board of directors, I think it is reasonable to support the organization you are working with,” said EDC Board President Johnny Johnston. “All of us serving the city and the EDC believe in and support doing business in Liberty Hill, and I think it would be difficult to say that if we weren’t willing to consider that for our own businesses. My wife and I own and operate a business here in town, after all. I was proud that both Eric and the board not only followed the rules to the letter, but that any board member would demonstrate their belief in Liberty Hill in such a way. I’m appreciative that our attorney assisted us along every step.”