Sherman recently sweetened the pot for a potential $47 million expansion of the local GlobiTech facility.
The Sherman City Council created an industrial reinvestment zone for the local GlobiTech property during its meeting last week, and set a public hearing for a proposed tax abatement agreement with the company for Aug. 20. The tax breaks from Sherman, along with a $1.9 million incentive for the silicon-epitaxy manufacturer from the Sherman Economic Development Corp., will be part of a competitive proposal GlobiTech will make to its corporate board to get permission to move forward with the expansion.
The proposed capital investment in the local facility would see a 78,000-square-foot facility built that includes 10,000 square feet of clean room space at a cost of $23 million and an additional $24 million in equipment. The proposed expansion would also include the addition of 32 new jobs to the company’s current total of 247 employees.
The existing GlobiTech facility contains 8,000 square feet of clean room space in each of its current Fab 1 and Fab 2 facilities. If approved by corporate, the first phase of the local expansion would begin in the fall of this year and be completed in 2020.
Sherman Director of Finance Mary Lawrence said the city establishing the industrial reinvestment zone was the first step before it could grant a tax abatement.
“GlobiTech has applied for a tax abatement for phase one of the new project that’s about $47 million in real property and additional improvements,” Lawrence said. “The tax reinvestment committee has recommended the tax abatement, which will be considered separately on the Aug. 20 agenda.”
The council approved the creation of the industrial reinvestment zone unanimously after a public hearing that saw no one come forward to speak. Later in the same meeting, the council unanimously set the public hearing on the tax abatement agreement for its Aug. 20 meeting with no discussion.
The proposed eight-year tax abatement agreement would give GlobiTech a 60 percent tax abatement for each of the first three years, a 50 percent abatement for each of the following four years and a 25 percent abatement for the final year of the agreement.
SEDCO officials said they are hopeful a decision on the future of the Globitech expansion will be made soon. The $1.9 million incentive approved by the SEDCO board last month is 4 percent of the proposed capital investment and would be distributed in two payments of $95,000 before the end of the agreement on July 31, 2021.
City officials said the establishment of the reinvestment zone, and the possible approval of the tax abatement, wouldn’t cost the city any money if GlobiTech decides not to move forward with the local expansion.
“They only get the tax (abatement) if they put the investment in,” Director of Administration Terrence Steele said. “This is strictly for that expansion.”
The Sherman Planning & Zoning Commission approved the site plan for GlobiTech’s proposed expansion at 200 West FM 1417 during its meeting in June.
“Essentially, GlobiTech’s expanding their facility,” engineer Justin Walton, from Teague, Nall and Perkins, said to the commission, adding GlobiTech is nearly out of room in its current fabrication facility. “They’re building a new Fab 3 Expansion.”
Information provided to the city states the expansion to the current GlobiTech facility will be a Fab 3, which is similar in size to the facility’s existing fabs. The proposed expansion will be designed to connect to the existing facility.
With the site plan, the commission also approved an exception to allow a retaining wall, security fence and plant screening with a 38-foot setback from Howe Drive. Sherman Director of Development Services Scott Shadden said the planned retaining wall along Howe Drive will accommodate the building’s fire lane.
Separate from the proposed expansion, GlobiTech is moving forward with the construction of a private Power Generation Facility that would serve the company’s existing building. The company’s request to build that was approved unanimously by the Sherman City Council last month.
Walton explained in May GlobiTech has had “upwards of 15 utility outages throughout the year” and the power generation plant would allow for “consistent power at the site” and reduce “those outages to two to three a year.”
In May, the SEDCO board approved a land purchase contract for GlobiTech to purchase 2.2 acres for $10,000 for the facility. Information provided to the commission states the generation equipment will be capable of operating in conjunction with the company’s electric utility provider, or in “island mode” where it is disconnected from the utility. The power generation facility will be natural gas fueled engine generators and are expected to be in use less than 200 hours each year.
After approving the sale of the land to GlobiTech, the SEDCO board also approved a separate performance agreement with the company that will see GlobiTech investing $650,000 in switching equipment and receiving an incentive of $32,500. SEDCO staff said that incentive agreement is only scheduled to last through the end of the year, so GlobiTech could receive the $32,500 incentive payment in the next five months.
SEDCO’s board also approved a $487,500 incentive for the local manufacturer last September after GlobiTech said it would be adding 12 new jobs over the following two years as part of a nearly $10 million capital investment in its Sherman plant.