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City, county OK tax breaks, $950,000 grant for hanger company

City, county OK tax breaks, $950,000 grant for hanger company

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Editors note: The story has been revised to reflect that the company makes hangers from plastic, not wire.

A maker of plastic clothes hangers is ready to build a $33 million plant and headquarters at 7201 Mars Drive with assistance from city and county tax breaks.

Merrick Engineering, of California, already employs 150 at warehousing and production sites locally but will combine all operations in a new 400,000-square-foot facility to improve efficiency, McLennan County commissioners were told Tuesday. The Mars Drive site also will become Merrick’s corporate headquarters.

Commissioners and the Waco City Council approved incentives in separate meetings Tuesday.

Earlier this month, another company, Germany-based Zinkpower Group, announced it would place a 161,000-square-foot hot-dip galvanizing plant in the 7500 block of Mars Drive. It will employ at least 100 people directly, creating another 75 jobs when a multiplier is applied, said Kris Collins, senior vice president for economic development at the Greater Waco Chamber of Commerce, who worked extensively with Zinkpower.

The job creation “will mean a more than $50 million increase in payroll, which will work its way through the community,” Collins said.

Since that announcement, representatives of two other Germany-based companies have been kicking tires in Waco in visits hosted by the chamber, she said. German business executives seem to have a fondness for Texas, noting that the 60-foot-long dipping barrel, or kettle, Zinkpower is placing in its Waco plant “will be the largest in its global system,” Collins said.

Merrick, meanwhile, has said it will hire at least 10 more people to fill manufacturing and assembly positions making at least $12 an hour, plus benefits, while also filling 10 headquarter positions making an average of $57,500 a year, Waco Economic Development Director Melett Harrison said.

Merrick will get a $950,000 Waco-McLennan County Economic Development Corp. grant disbursed in three portions: $345,000 to apply toward the purchase of acreage on Mars Drive from the Waco Industrial Foundation, $250,000 to assist Merrick in securing a rail spur from Union Pacific Railroad to serve the new plant, and $355,000 contingent on Merrick meeting requirements relating to job creation and retention and in generating new real and personal property taxes.

Merrick has pledged to spend $23 million on land and buildings, and another $10 million on equipment to run the facility, Harrison said.

Waco and McLennan County leaders also approved tax breaks for Merrick on Tuesday for the increase in taxable value on the property to be developed and on the taxable value of the equipment to be installed. Over the seven-year term of the agreement, the city will forgo $1.1 million in taxes while getting $1.16 million in newly generated property taxes, Harrison said.

A county breakdown was not available late Tuesday afternoon.

Collins, who prepares an analysis of proposed tax breaks for industrial projects, told commissioners the Merrick incentive package is a good one. She said the city and county combined can expect a 44% annual return on their investment, and will recoup the value of the breaks in fewer than three years.

Another economic development project that could create demand for welders and others who work with steel will receive commissioners’ consideration in about 30 days, McLennan County Judge Scott Felton said Tuesday. Tax breaks for a Canadian company proposing to place a 54,000-square-foot production facility and warehouse on 16 acres owned by the Waco Industrial Foundation appeared on Tuesday’s agenda, but action was deferred. The Waco City Council also will take up the matter, Felton said.

The company is involved in the manufacture of trailers, he said.

“As I understand it, this is a family-owned company of several generations,” Felton said. “These would be high-skill jobs and would highlight our need to ensure we have a talented workforce to offer industrial clients.”

He said personal and real property im- provements would exceed $10 million.

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