Industrial board approves 5-year tax break for new industry
By Steve Short
Citing the promise of new jobs and planned improvements in rail access for industry, the Milan Industrial Board voted unanimously Jan. 25 to give a 5-year property tax break to a new manufacturing firm.
Escue Wood Treated Products, located in the old ITT plant on Telecom Dr., was granted a Real and Personal Property Tax Abatement (PILOT) of city and county taxes for a period of five years. The company would save a projected $106,555 in tax payments, according to documents.
The tax relief will be contingent on Escue adding 80 new jobs in the next 5 years. The company, which began operation in early January, currently employs 10 people.
Escue owners agreed to a “claw-back” provision regarding job growth. During the PILOT time frame (2017-2021), if the firm does not achieve its projected job growth, the percentage of job reduction from the projected number will be calculated, and Escue Wood Treated Products will be obligated to pay that same percentage in property tax.
While the new firm will be given an abatement on property taxes, the company will pay school district taxes to the Milan Special School District, estimated at about $14,000 annually.
Receiving the PILOT abatement will allow Escue to qualify for a state grant of about $518,000 to construct a connecting railroad spur, improve drainage on the property, and train employees. Escue would pay $33,440 in matching funds to receive the state grant.
$418,080 in grant funds would help pay for a 600 ft. rail spur to the building and drainage improvements. The West Tennessee Railroad line is near the firm’s building. A $100,000 grant would help pay for training of employees.
Industrial Board Chair Lynn Arnold and Chamber Exec Julie Allen Burke both said Escue needed the city-county tax abatement to receive state funds. Arnold said the creation of the rail spur would be an improvement to the industrial property, regardless of its ownership.
“The rail spur is good for that property even if (Escue) goes under,” he said. “The rail spur is worth a lot; it will be there at the property.”
Board members expressed concern about setting a precedent, so that any local business wanting to expand would seek tax abatements. But Mike Hill, who was elected as the board’s new vice-chair, said the promise of 80 new jobs won his support for the Escue abatement.
“If you bring us a proposal for eighty jobs, we’ll consider (a PILOT abatement),” said Hill.
Production and office jobs at the Escue plant will pay $14 to $15 per hour, while maintenance jobs will pay more, $17 to $20 per hour, the company stated. Escue plans to add jobs incrementally, 20 jobs per year in 2017 and 2018, 15 jobs annually in 2019-20, and 10 jobs in 2021.
Making the pitch to the board were Escue stockholders, Alvin Escue; his son, Nathan Escue, and partner, Calvin Moore of Lawrenceburg, TN. Kingsley Brock of the Jackson Regional Partnership supported the PILOT request, as did Blake Swaggert, the state’s Northwest Regional Director of the Dept. of Economic and Community Development.
“I’m very confident of this project,” said Brock. “If I didn’t believe in it, I would not be here.” Brock said cities across America are giving businesses 15-20 year tax abatements to attract jobs.
Mayor B.W. Beasley also was supportive of the PILOT abatement.
Escue family involved
Executives for the Escue are Phyllis Escue, President; Alvin Escue, General Manager; and Nathan Escue, Vice President.
In printed material provided to the Industrial Board, the firm’s leaders said they plan to produce 60 million board feet of treated pine lumber per year. Owners listed personal capital investment in the firm at $662,350, including cost of the building and property, three cylinders, pipes, pumps, valves, a stacker, and grant match funds.
“Escue Wood Products is dedicated to building a wood treatment plant in Milan that will add value to existing pine production in West and Middle Tennessee,” company leaders said in a statement. “We intend to manufacture and market high quality products that are consistent and satisfy our customers’ needs. We plan to achieve these goals in a way that is environmentally safe and provides growth opportunities for area residents, producers and investors.”
Alvin Escue noted his experience in aspects of the lumber industry, having worked for Georgia Pacific, Gulf States Paper, Harrigan Lumber and Brunswick Pulp and Paper.
Nathan Escue said he was glad to be coming back to Milan. He graduated from Milan High in 1996 and has lived in Nashville. “I was able to talk my wife into moving back here,” he said. “We’re extremely excited, very happy and very much looking forward to working with the city of Milan to bring back jobs to this area. We appreciate all members of the Industrial Board voting to give us the tax abatement.”
The Escue plant will treat lumber with chemicals to improve its durability for use in construction and projects involving ground contact. The firm ship to lumber sellers and stores.
Asked about potential hazards related to the firm’s use of chemicals, Nathan Escue said his company would protect employees from safety and health risks. He also said the business would not discharge chemical pollutants into the groundwater or air. Mr. Escue said he earned a college degree in environmental safety and health and had worked in recent years in the construction industry on employee safety and industrial hygiene.