• November 25, 2014

Lampasas residents divided over city’s deal with Calif. company

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Posted: Tuesday, April 15, 2014 11:22 pm

LAMPASAS — Residents are split on the city’s decision to spend $375,000 on an economic incentive package for a California company that relocated to the area last year, while others involved in the deal said it all seems to be a misunderstanding.

The agreement, which city officials approved Friday, included “leasing to own” the $375,000, 3.87-acre property along U.S. Highway 281 purchased by the city to the new company, Lampasas Trucking and Redi-Mix.

The company will pay $275,000 for the property across a 15-year time frame with a 3 percent interest rate, as long as the company agrees to have 10 full-time employees for five years.

“The city is financing this for only 10 new, $10-an-hour jobs: What am I missing here?” said Sandy Eckermann, reading a letter written by her husband, Heath Eckermann, to council members. “Local business owners and citizens should be outraged that our decision-makers are making these deals and passing them off as having a positive impact.”

In his letter, Heath Eckermann raised concerns about whether the company would pay property taxes on the city-owned land, how the business would “increase property values,” as the city claimed, and if the company would be requiring additional city utilities at the site. The property is not connected to the city’s sewer system.

At Monday’s meeting, residents asked officials why an out-of-state company was given incentives instead of local businesses already in the area, and many commented about the behind-the-door nature of the deal.

City Manager Finley deGraffenried said local and state businesses were provided with similar economic incentives in the past.

Economic incentive projects

Several economic incentive projects included $58,000 spent last year on a 58-unit senior living center. DeGreffenried also said the city worked with Stripes Convenience Store, a state-owned business, to extend utility lines. The city was approached by Redi-Mix owner Mike Jones and Gov. Rick Perry, he said, and did not solicit the out-of-state business.

The city will extend sewer lines to Redi-Mix’s site, DeGraffenried said.

He said the “10 jobs at $10 an hour” was a conservative number used in an economic development study done in October by Austin-based company Impact Data Source.

“We feel like potential for this company is many, many more jobs in the future,” he said.

Jones said the jobs will pay more like $30 to $40 an hour, but those numbers were not released because he did not want to advertise the salary everywhere.

Ad valorem taxes

DeGraffenried said Lampasas Trucking and Redi-Mix will pay ad valorem taxes even when its property is still owned by the city because it was a stipulation in the deal.

The city and economic development corporation will see its $100,000 incentive paid back in 2.6 years, according to the economic study.

Using the conservative number, the study factored in numerous revenue and expenditure costs including property taxes, cost of utilities and payroll spin-off, DeGraffenried said.

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