Wal-Mart and Carolina Beverage seek tax breaks to add hundreds of jobs April 10, 2013
By A. Lee Graham
Fort Worth could gain hundreds of new jobs if Wal-Mart Stores Inc. and Carolina Beverage Group LLC accept tax breaks offered by the city to establish new operations.
“This is a good deal,” said District 7 Councilman Dennis Shingleton, voicing support at the April 9 City Council meeting.
“It looks like an excellent partnership,” said Mayor Betsy Price.
At the pre-council session, city economic officials outlined tax abatement proposals hoped to lure Carolina Beverage to town and see Wal-Mart add another operation to its growing local presence.
With the retail giant expecting to exceed $9 billion in online sales this year, the company has prioritized developing what it calls a “next-generation fulfillment network” to accommodate online sales. Product inventory on company website walmart.com grew 35 percent to 40 percent to 2 million items in 2012, with the company requiring bricks-and-mortar fulfillment centers to handle inventory expected to double this year.
“If this fulfillment center is as successful as they think it will be, there will be some real growth opportunities at this site,” said Robert Sturns, the city’s economic development manager.
To that end, the city is offering to abate 75 percent, or about $2 million, of city property taxes on the incremental value of its proposed location at 5300 Westport Parkway in far North Fort Worth and equipment and other items classified as business personal property for 10 years. Wal-Mart would pay $1.5 million in that period.
In return, the company would be required to invest $30 million for the 788,000-square-foot building that it would lease, with more than 55 percent, or $210,000, to be spent each year on supplies and services with Fort Worth companies. The company would have to spend of 25 percent of its supplies and services budget, or about $96,000, with Fort Worth minority- and women-owned businesses.
The deal would bode well for local employment, with 160 of the 400 full-time equivalent jobs expected to be created by Dec. 31, 2017 required to be filled by Fort Worth residents. Eight of those jobs would be filled by residents who live in the central city.
The council is expected to consider approving the proposal at its April 23 regular meeting.
Meanwhile, Carolina Beverage could reap tax savings of its own by leasing a 400,000-square-foot building at 13300 Park Vista Blvd. – just west of the proposed Wal-Mart site – for shipping and manufacturing.
The company, whose website describes the business as “the go-to source for quality East Coast contract beverage production,” produces ready-to-drink teas, fruit drinks and energy drinks.
“They are one of the premier contract beverage manufacturers in the country,” said Sturns, telling the council that the company has reached its production capacity in North Carolina and is seeking new locations.
The city is offering to abate up to 70 percent, or about $2.4 million, of city property taxes on the increased value of its proposed location and equipment for 10 years. The company would pay about $1.9 million during that time.
The city would also waive permit fees saving the company an additional $20,000.
Local employment would see at least 225 new full-time equivalent jobs created by the end of 2018, with at least 79 filled by Fort Worth residents and four those filled by workers living in the central city area.
But Fort Worth is not the only location the company is considering.
“Oklahoma is another one,” said Sturns, who said he did not know others in potential consideration.
The council is expected to consider approving the proposal at its May 7 regular meeting.
One of several individuals who worked with the companies after they began considering Fort Worth lauded the potential deals.
“It’ll mean that we’ll have a little mini-cluster of beverage manufacturers, with Miller Brewing already here,” said David Berzina, executive vice president of economic development with the Fort Worth Chamber of Commerce, speaking of Carolina Beverage Group.
The company contacted the Chamber in January, with Wal-Mart making its own inquiry about potential Fort Worth sites last year, Berzina said.
If Wal-Mart and Carolina Beverage secure tax incentives, they would become the latest of several firms awarded such designation in the past year. ATC Logistics & Electronics Inc., In-N-Out Burger, FTS International Inc. and Ferris Manufacturing Corp. are just some of the companies given tax breaks by the Fort Worth council. Proponents consider such incentives as indispensable for bringing more jobs to town and enriching the tax base when employees of those firms buy homes, patronize restaurants and pump other money into the city’s economy.