City Council agrees to incentives for two local businesses to expand

The Amarillo City Council met Tuesday and approved incentive agreements with two companies to expand their business and create new jobs in the area.

Councilmembers discussed reimbursement for three public infrastructure projects for about $15 million in the South Gateway Reinvestment Zone to better understand these projects.

Up for its second reading, a new reinvestment zone was created near Farmers and Georgia Street to facilitate the Amarillo Economic Development Corporation’s incentive deal with Sage Oil Vac, a local company that manufactures oil change equipment.

Councilmember Tom Scherlen, who voted against the zone at the last meeting, was swayed by further explanation of its need, but councilmember Josh Craft voted "no" on both the creation of the new investment zone and the tax abatement for Sage Oil Vac.

Craft expressed that he believes that tax incentives cannot be justified for new business at the taxpayer's expense with all of the other city's needs.

“I believe that these businesses that are being brought here by the Amarillo Economic Development Corporation (AEDC) are already getting incentives to come here, and it's hard for me to justify that property taxpayer should also incentivize them,” Craft said. “Public safety is funded by these taxes, and to give away tax money in these agreements is not in the best interest of the citizens.”

Amarillo conveyed 20 acres to the company for its expansion in two phases and will provide a $10,000 incentive per job created over five years up to $600,000. The 175,000-square-foot expansion is expected to create 60 new full-time jobs. A one-year tax reduction of 10% was also approved for the company, which is expected to be about $4,000.

Also approved was a job creation incentive for Asset Protection of $10,000 per newly created job over five years up to $300,000, with an expectation of creating 30 full-time employee positions.

Kevin Carter, president of the AEDC, spoke about the approved new incentive deals.

“We are really excited about the two businesses that have decided to expand,” Carter said. "The new jobs that Sage Oil Vac and Asset Protection will create will provide our citizens with that much more opportunity.”

Carter spoke about criticisms of giving tax incentives to new businesses and expansion.

“This is a tool we have in our toolbox to incentivize an existing business to expand or to entice new business to the city,” Carter said. "I know for sure that we would not have some of our major projects if we did not have the AEDC and its ability to offer incentives. Many of these projects are products of the hard work the AEDC and the city do together to bring new business to the area.”

Mayor Cole Stanley weighed in on the incentive agreements passed during the meeting.

“The Sage Oil Vac package was an easy one for me,” he said. "If they perform as predicted, then that will be money well spent. I think you are seeing the council struggle a little bit with making sure that we are making good investments and driving hard deals, so that we do not have anything that we are giving away that we do not need to.”

Stanley said the council is pressing the AEDC to make the best deal possible with the taxpayer in mind.

“We are still on a good trajectory to grow at a faster rate over the next five to 10 years,” Stanley said. “The AEDC levels the playing field, bringing larger companies here that may not otherwise look here first, and you are competing for that business.”

This article originally appeared on Amarillo Globe-News: City Council agrees to incentives for two local businesses to expand