After approving three tax abatement within a few weeks of each other earlier this year, the Sherman City Council recently voted to renew its Industrial Tax Abatement Program
The council approved a resolution to revise and renew its guidelines for the program during its meeting earlier this month.
“Every two years, the council is require to readopt our policy on tax abatements,” Director of Finance Mary Lawrence said. “We’ve updated the policy for a few things this time — mostly to require additional information, such as we’re asking an applicant about depreciation information on the property that they’re asking to be abated, water usage, sales tax generated during construction, expected source of labor — just things that looking back we would have liked to have known.”
In March, the council approved a 10-year tax abatement for Finisar Corp., which announced in December that it would begin producing vertical-cavity surface-emitting lasers for Apple products at its new Sherman facility later this year, as well as a five-year Chapter 380 tax rebate agreement. City staff estimated the tax abatement agreement would save the electronics components manufacturer around $3.3 million in property taxes, and the tax rebate agreement would save it around $1.2 million.
Later that same month, the council voted to extend a tax abatement agreement with the local Texas Instruments facility.
“The original abatement was for five years at 55 percent per year,” Lawrence said to the council in March. “Over the next five years, the total taxes, assuming the current rate and the current value on the estimated value of about $10 million, is $213,000 with a benefit to the taxpayer of about $117,000 and the city realizing about $96,000.”
Then in April, Sherman approved a tax abatement agreement for the West Moore Solar energy farm in the 900-2000 blocks of West Moore Street. That agreement is expected to save the facility around $119,000 over a five-year period.
The Commercial Tax Abatement Program was first established by the city in July 1988 to help create jobs and promote industrial and commercial development. It was last renewed in May 2016. Another addition to the program is a change to the minimum project investment from $10 million to just $5 million.
“It really reflects what we already do,” Lawrence said, adding the revision would also allow abatements to be deferred. “Right now, the policy states the abatement starts the next year. Well, we know sometimes construction doesn’t follow that schedule, and we already do allow for that deferral, it just puts that in our policy.”
The council had no questions about the program’s revision and renewal and approved the resolution unanimously, though Deputy Mayor Pam Howeth was absent from the meeting.