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Enterprise zone subject of City special meeting

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The Navasota City Council will conduct a public hearing Tuesday, Jan. 18, 2022, to receive comments regarding the City’s support of Champion Home Builders, Inc. application to the Office of the Governor, Texas Economic Development, to be designated an Enterprise Zone Project.

A Special Meeting will follow the hearing to take action on the first reading of Ordinance 990-22 authorizing the City’s participation and nomination of Champion Home Builders, Inc. and designating a liaison for communication purposes.

Champion Home Builders, aka Skyline Champion, is located at 9601 Industrial Drive in the City’s ETJ (extraterritorial jurisdiction) and is one of the largest homebuilders in the United States, employing 7,700 people.

Investment incentive

The Texas Department of Economic Development describes the Texas Enterprise Zone Program (EZP) as a state sales and use tax refund program designed to encourage private investment and job creation in economically distressed areas of the state.

If approved on a state level, Champion could receive a refund of all or a portion of the maximum allowed of the 6.25% state sales tax it pays for items purchased for its business.

Reimbursement is determined by a number of criteria – amount of investment, number of jobs and the average weekly wage. Champion plans to invest $5.5 million in buildings and the parking area and hire 275 employees, of which 25% must live in Grimes County.

According to City of Navasota Economic Development Specialist Rayna Willenbrink, the jobs criteria is based on the number of jobs which exceed the average weekly wage of Grimes County.

Willenbrink said, “They’re hiring 275 new employees but for whatever portion will exceed the average weekly wage of Grimes County, they can receive up to $2,500 per job.”

Willenbrink continued, “An enterprise zone is based on census blocks and tracts. 9601 Industrial Drive is within the economically distressed census area. Even though Grimes County is not a distressed county, we’re still able to nominate them on just the thresholds of percentage of economically disadvantaged employees that are hired. The threshold for that differs 25-35% depending on the census track the business is located in. Also, it reverts back to the average weekly wage rate. That’s determined on the County level.”

Impact to City?

Since Champion is located in the City’s ETJ, there is no loss of city sales tax revenue. Newly hired Navasota City Manager Jason Weeks has previous EZP experience from his tenure with the City of LaPorte.

Weeks said, “They (Champion) don’t pay city sales tax. There’s no monetary loss for the city. The city council is being asked to support the project. The County will make the decision, because it’s outside the city limits, on whatever type of incentive they wish to move forward with.”

Weeks added that if the project were inside the city limits that city council would have the ability to determine if the City was willing to forego all or a portion of the

City’s sales tax percentage.

Win-win for city

Weeks said, “I think it’s a win-win. There are no tax dollars going out. I think that 275 new jobs coming in is a win. Those 275 jobs, hopefully, will buy gasoline, go shopping downtown, they’ll become Grimes County residents – there are a portion that have to be.”

He continued, “This is just one part of the process. All those pieces go to the State and the State determines if they’re going to grant this project.”

Mayor Bert Miller agreed saying, “It’s going to provide jobs that a lot of local people can fill because of the type of work they’re doing – construction and local trades. I feel that making an application to the State for this incentive is a win-win for the City because the City’s not going to be out anything as far as cash or dollars the City has to put out for it. It’s simply an application we give to the State and the State provides the incentive through sales tax. It’s exciting that we have this opportunity to work through the State and appreciate that for our economic development.”