Following the lead of Brown County, the Early City council approved a tax abatement agreement with 6:21 Heartland Investments, LLC Tuesday evening, setting in motion yet another step in making the new Bruner Chevrolet and Toyota dealerships a reality for the City of Early.
Owners Greg Bruner and Dwain Bruner were present at the city council meeting along with their business consultant James Campbell.
Campbell presented the council with the proposed guidelines and criteria for granting tax abatement and explained that the state requires taxing entities to renew every two years, coinciding with the biennial Texas legislative sessions. He also explained to the council that these guidelines and criteria have been approved and adopted by Brown County and all taxing entities must agree on the same criteria and guidelines; however they do not have to agree on the same tax abatement agreement. These guidelines and criteria, according to Campbell, are good for the full term of a tax abatement made within the two year period. After a short discussion, the council approved the matter.
According to Campbell, some companies ask for abatements which are 100% and for a term of the state allowed maximum of 10 years; however he explained this is not the case they were presenting.
“We decided that’s too long and too much,” said Campbell.
Campbell went on to explain the abatement requested on behalf of the Greg and Dwain Bruner through their 6:21 Heartland Investments, LLC which is the owner of the land upon which the dealerships will be built.
The abatement agreement states that Bruner must continue to retain or create at least 50 full time employees at the new facility, and the construction process will be completed within three years. During which time, no taxes will be paid on the unfinished improvements.
The owners anticipate that the new facility will grow and create 10-15 new positions through its separate GMC and Toyota service and parts departments. Currently, Bruner has 52 full time employees.
The Bruners hope to complete construction of the 30,000 square foot $10 million project in time to have the new facility on the 2013 tax rolls, which will be approximately a 12 month period.
Campbell explained that the abatement is applied only to the improvements after they are completed and will last for a 7 year period and taxes are abated on a declining percentage each year. Upon construction, completion and issuance of a certificate of occupancy from the City of Early, 90% tax abatement would apply, will decline by the 7th year to 30%, then on the 8th year of business, 100% of the taxes would be paid each year based on the Brown County Appraisal District appraised value at that time.
Abatement, according to Campbell, does not apply to inventory or the land value so immediately significant taxes will be collected by the City of Early and Brown County. Early ISD is prohibited by state law from offering abatements; however can offer a tax ceiling according to Campbell.
According to Campbell and Bruner, the move is a win for everyone involved. Currently the land is valued at $955,370, which will continue to bring the City of Early, Brown County and EISD its current tax revenue as will any inventory such as vehicles and equipment on the site. Campbell stated that the inventory is anticipated to be increased at the new dealership.
During commissioners’ court on October 17th, County Judge Ray West figured the abatement agreement would result in 1/3 of the taxes being abated and 2/3 of the taxes being paid during the term, while increasing the tax base of the property to $10 million.
“The location of this project will be a great enhancement to the City of Early,” said Campbell. “At the end of the day, I think this new project is going to enhance the future development of this entire area and this intersection. I think it is going to be a real plus to the community and you are not giving up anything for this, because there is nothing there now. I think this is a very good project.”
The Early City Council unanimously approved the requested tax abatement for the project.
Early City Administrator Ken Thomas stated that the city has recently become aware of Proposition 12 funding which was not funded until last year and part has been approved to construct the roadway within the project site which will save the City of Early approximately $660,000. The road will connect Hwy 183N and the Old Comanche Road. Because this road’s construction will result in traffic safety improvements and ease congestion problems near the intersection, the funds were approved for use by the City of Early after an application was made by local TxDOT officials. The roadway construction will coincide with the completion of the Bruner Project.
“We cannot thank TxDOT enough,” said Thomas regarding the assistance TxDOT provided in submitting the application for the funding.
Assistant City Administrator Wayne Creel stated that since the announcement of the new Bruner dealerships, there have already been inquiries of another well known business regarding possibly opening in that location.
Pictured above: Greg Bruner hands Early Mayor Bob Mangrum the deed to the parcel of land upon which the road within the project will be built.
