Two expanding companies to receive Cobb County tax breaks
by Sarah Westwood
July 14, 2014 04:00 AM | 3982 views | 2 2 comments | 11 11 recommendations | email to a friend | print
MARIETTA — A pair of growing companies will get an economic boost thanks to the tax breaks they’re set to receive through two of the county’s enterprise zone programs.

This week, commissioners voted to grant incentives to Casteel Heating and Cooling and Yates Cylinders, two companies that plan to make significant enough investments in designated areas that the county is willing to slash their property taxes for up to 10 years.

Dana Johnson, deputy director of the county’s Community Development Agency, said such areas must meet three of five state and locally mandated criteria in order to be eligible to become enterprise zones: pervasive poverty, unemployment, general distress, underdevelopment and general blight.

Businesses within enterprise zones can apply to the county for tax breaks if they plan to hire new employees or pour considerable capital into the zones, Johnson said.

He noted those companies must either create five or more full-time jobs or make an investment that is five times greater than the current assessed value of their property in order to qualify for enterprise zone benefits.

For a business that owns property worth $100,000 when it applies for the incentives, Johnson said, an investment of at least $500,000 would qualify it to reap the benefits of the enterprise zone.

Pehrson said he could not provide an estimate of how much the companies would save from their tax breaks because the amounts depend on what the eventual dollar value of their investment turns out to be.

Steve Cavera, national sales manager for Yates Cylinders, said the St. Clair Shores, Mich.-based company is in the process of opening its first facility in Georgia since acquiring parts of a defunct hydraulics firm several months ago.

“We were looking for tax abatements — incentives, if you will — in Austell so it could help us launch the new company,” Cavera said. “Yes, the (previous) company existed in the past, but we kind of have to start from scratch.”

Cavera said Yates manufactures cylinders — welded metal parts that play a role in the production of everything from paper products to car tires.

Besides its corporate office in St. Clair Shores, Cavera said Yates operates an additional facility in Decatur, Ala.

Yates selected Austell as the home for its third location for “a number of strategic reasons,” Cavera said.

One reason was to retain the assets of its acquired company, which include its machinery, intellectual property and former members of its staff.

“It’s a sad thing when a company goes out of business,” Cavera said. “We’re trying to make something good. If you’re trying to do that 40 miles away, you’re going to lose all your staff.”

The tax incentives provided through the south Cobb enterprise zone was another major draw for the company, Cavera said.

“Of course we’re looking for any kind of state and local help to help us launch our business, because we want to be there for good,” Cavera said.

John Hillis, owner and president of Casteel Heating and Cooling, said the incentives and the support of county commissioners encouraged him to grow his company locally rather than expand to other areas.

“We were looking at other locations for future growth,” Hillis said. “I felt like the county wanted to work with us and the commissioner wanted to work with us and help us find incentives we may not have been aware of.”

Hillis said Casteel’s services include electrical, plumbing, service repair and installation, primarily in residential properties.

Casteel owns 3.5 acres today, Hillis said, but is in the process of purchasing an additional 2.9 acres along Canton Road as part of a planned expansion.

“We want to continue to put more money into the beautification of our property and the property we’ve purchased,” he said.

While the company already employs 115 people, Hillis said it hopes to add even more to its payroll during the upcoming period of planned growth.

Michael Hughes, director of Cobb’s Office of Economic Development, said the areas in which Yates and Casteel planned to grow have experienced a process called “disinvestment,” during which economic and development activity has stagnated and unemployment has risen.

Hughes said the two companies would not have to pay the county any ad valorem taxes for the next five years now that commissioners have approved their applications.

Over the course of the second five-year timeframe, Hughes said those taxes will be phased back onto the company’s bill in 20 percent increments each year until they are back to paying the full amount of their property taxes.

Approved businesses can pay lower state, county and municipal ad valorem taxes, Johnson said, as well as lower occupational taxes and license fees, but do not receive a school tax break.

Hughes noted the county also has the ability to limit fees on their building permits and business licenses.

“If the project involves new construction, they get a cap on their building fee,” Hughes said.

Casteel plans to invest $1.5 million in the Canton Road enterprise zone it occupies, Johnson said.

The heating and cooling company expects to create 127 full-time jobs over the next eight to 10 years, Hughes added.

While Yates projects a larger capital investment in the south Cobb enterprise zone, Johnson said the manufacturer will only receive abatements on its personal property, such as equipment, inventory and machinery.

“They don’t own the property,” Johnson said. “We don’t offer abatements for renters.”

Hughes said Yates plans to rent a 60,000-square-foot building in Austell and fill it with $2-3 million worth of new manufacturing equipment.

Yates expects to create 45 new full-time position, Johnson said.

He added the two companies were the first to apply since the program was re-authorized last year.

“It’s certainly exciting to see that companies are back in expansion mode after numerous years of economic challenges,” Hughes said. “We certainly hope this activity picks up over time.”

Comments-icon Post a Comment
July 14, 2014
The Business Sector gets tax breaks and the Private Sector gets tax hikes.

And the Voters keep electing these 'Conservatives' back into office...
Gringo Bandito
July 14, 2014
The business sector is the private sector.
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