Gus Percy, Lebanon Reporter
At a special meeting Monday, the Lebanon City Council approved a $5.1 million abatement package for a British packaging manufacturer that plans to invest more than $100 million locally.
The seven-year tax abatement for personal property is contingent on DS Smith securing ownership of a lot in the Lebanon Business Park from Duke Realty.
DS Smith hopes to begin building a 550,000 square foot facility next month to be completed in November 2019.
The manufacturer of corrugated cardboard packaging and consumer packaging expects to hire up to 140 employees at wages of at least $22 an hour plus benefits by 2020. The total investment by DS Smith will be $31.2 million in construction and $75.7 million in personal property investment, company representatives told city leaders.
Molly Whitehead, executive director of the Boone County Economic Development Corporation, billed this deal as one of the largest investments in the county in the last couple of years.
“This (deal) ranks higher in terms of capital investment and these are good wages that the company anticipates paying, as well,” she said.
A seven-year abatement, like the traditional 10-year abatement, reduces property taxes only by a percentage. Taxes are reduced 100 percent in the first two years, 75 percent in the third and fourth year and so forth.
The Boone EDC estimates the company will save $5.1 million, but the city will receive $5.7 million in taxes in 10 years and another $345,000 in new income taxes from employees.
“We really like to focus on creative incentive packages that not only benefit the company but the taxpayers of Lebanon as well,” Whitehead said. “When we are negotiating incentives with any company, we perform a full cost-benefit analysis on every project to take a look at their capital investment, number of jobs, and wages. We took feedback from what was important to the company, versus what was important to the city and that’s how we arrived at that number.”
This is the first facility in the United States by DS Smith. The new facility will be built across from the DA Lubricant facility and joins Monosol, Festool, IBC Coatings and Consolidated Container Corporation Co., all of which have announced new plants or expansions this year.