Commission to consider Kimber abatements
Published 3:09 am Saturday, June 23, 2018
Pike County commissioners on Monday will consider adding a 10-year extension to tax abatement incentives for Kimber Manufacturing.
The upscale firearms manufacturer is scheduled to open a new facility in Troy in early 2019 and is expected to create 360 jobs and invest more than $38 million in the local economy.
City officials in January authorized a $24 million incentive package, including the financing of the design, renovation and construction of the facility. It also authorized tax abatements for 10 years. In order to extend the ad valorem tax exemptions for another 10 years, as now allowed by state law, all three entities – city, county and state – must give approval separately.
“The state has to give separate approval, the city has to give separate approval and the county has to give separate approval. That’s what it boils down to,” said Troy Mayor Jason Reeves.
The request before the commission on Monday guarantees the ad valorem tax exemptions for 20 years.
“This company is bringing over 360 jobs with a minimum hourly wage of $12,” Sullivan said. “The abatements would be on the new facility and the new equipment that they have to bring in to provide those jobs. I think the county would be behind by not doing it. I think it’s a positive thing for the county to go ahead and do it.”
Kimber officials estimate the first-year tax abatements will be about $138,424.
Kimber plans a $15.4 million investment in new buildings, a cost of $38.634 million for new manufacturing machinery and $250,000 for other new personal property, bringing the total value for property tax to $54.284 million. Of that, $48.124 million is taxable.
The state and city have already approved the 20-year abatement plan with Kimber – the county is the last entity to decide whether to grant the last 10 years of abatements.
“The county is only considering the county’s portion of the abatement,” Sullivan said.
Pike County charges 12.75 mills on property, 8.5 of which goes to the general fund and 4.25 goes to the road and bridge fund, according to the Alabama Department of Revenue. Education ad valorem taxes, which are collected for Troy City and Pike County schools, are not exempted in the abatement.
The application also requests abatement of non-educational sales and use taxes, but only on construction-related transactions.
The company estimates the total value of construction-related sales tax to be abated if approved at $264,345 over the course of construction.
The company’s facility will be built on nearly 75 acres of land in the Industrial Park and includes a 225,000 square foot building, incorporating an existing spec building on the site.
The commission will meet upstairs at the Pike County Health Department Monday, June 25 to discuss and potentially vote upon the request. The work session will begin at 5:15 p.m. followed by the business meeting at 6 p.m.