Mineral Wells Index, Mineral Wells, TX

November 7, 2013

Pulling the trigger

City Council approves tax abatement in attempt to woo bullet factory to Mineral Wells


Mineral Wells Index

— By CLINT FOSTER



The City of Mineral Wells is doing its part to ensure the arrival of a new factory that will bolster the economy and create a multitude of jobs and specialized training opportunities for the community.

In a regular meeting Tuesday night, city council unanimously approved a resolution for a tax abatement agreement in an attempt to help woo Texas Ultra Precision Ammunition to build its new manufacturing facility in Fort Wolters Industrial Park in the near future.

According to Steve Butcher of the Area Growth Council, Texas Ultra Precision Ammunition LLC. is a startup company, intent primarily on manufacturing specialized bullets for military and law enforcement use.

The $50 million project includes $20 million worth of equipment and another $4 million spent on patents for specialized manufacturing processes. Butcher, who has been negotiating with the company for the past three months, told city council the presence of such a factory would have a very positive impact on Mineral Wells.

“One of the interesting things about this project is even though it’s a startup and startups we usually shy away from like crazy, because they don’t have a track record – they are looking at a marketplace that could be considered rather hot right now,” he said. “To bring a tax base in here that’s going to be in the $30-million range and to create a couple hundred pretty decent jobs, we need to throw everything we can against the wall and see what will stick.”

Butcher explained that TUPA already has the financing necessary for its project and is simply looking for a place to put down stakes. They had originally planned on building their facility in Las Vegas, but decided that they would be better suited in Texas, particularly because of the absence of unions. Now Mineral Wells and Fort Worth are two of their primary candidates with the decision to be made based on which city can assemble the best package that benefits the company.

The wine bottle in the middle of Mineral Wells’ gift basket is the City’s recently approved tax abatement on 75 percent of the company’s valuation over the next 10 years. Butcher added the Area Growth Council is also looking into the possibility of tapping into the governor’s enterprise fund, Texas Capital Fund or offering new-market tax credits, which he said would generate about $1.5 million of free equity for the company.

Butcher said the 100-acre property the facility would be built on – at the southwest corner of Ellis White Road and Lee Road in Wolters Industrial Park – currently carries an agricultural exemption and is only valued at around $8,000. Therefore, even with the abatement, the presence of the factory would cause the tax base to increase significantly. Most importantly, Butcher assured council members that Parker County would not be involved in the taxation of the property, rather taxes would come to Palo Pinto County.

“If we got the new-market tax credits, we’re talking about almost $9 million of incentives on the table,” Butcher said. “If new markets fall through, [it would be] $7.25 million. Still, it’s a lot of money, it seems to us.”

In addition to its individual positive impact, Butcher said TUPA’s presence could also have an overarching positive effect on the entire local workforce. If TUPA chooses to locate in Mineral Wells, the company has a goal of acquiring some of the old barracks, previously owned by the Corrections Corporation of America, and using that property for housing, medical and training facilities.

“We’ve got manufacturing companies all around town that are begging for people with the right skill sets,” Butcher said. “They’re going to be teaching welding, fabricating, machining and all those types of things. Everybody needs those. That could be a great help to our local manufacturing base.”

The only concern brought up in the City Council meeting was from Ward 2 council member Tammy Underwood, who wanted to assuage worries about the safety of the plant, saying she did not want anything like the tragedy in West to happen in Mineral Wells.

But City Manager Lance Howerton said the Bureau of Alcohol, Tobacco, Firearms and Explosives has a strict set of regulations for such facilities to be built. He added that the company would be required to submit their construction plans to the city for approval, at which point city officials could provide input on the process.

After examining the fire code, Howerton also said that the facility would not require any increase in emergency personnel. Mineral Wells Police Chief Dean Sullivan added there would also be no need for additional training of emergency personnel and they already have contingency plans for such a disaster.

Butcher quelled many council members worries by stating that TUPA’s original plan was to build their factory in the middle of Las Vegas. The only potentially dangerous aspect of the factory would be the bunker in which they would store their gunpowder. However, the ATF requires a 300-foot buffer on all sides of such materials, which should be feasible on a 100-acre property.

Before the council unanimously voted in favor of doing whatever possible to bring the factory to Mineral Wells, Mayor Mike Allen expressed his belief in the importance of the project.

“This has the potential of replacing two-thirds of the jobs lost from CCA,” he said. “We’ve got to try.”

Assuming TUPA does choose Mineral Wells as its future home, Howerton said construction of the new facility could begin in as few as six months. If that is the case, it would mean a positive boon for the local community and represent the latest in a line of developments that are nothing but good news for the city.