City, county and school board leaders are considering negotiating tax incentives that could bring $6.2 million in taxable value improvements to the county in the form of an expansion of the Young Automotive Group.
“We are looking at a substantial development here,” Morgan City Councilwoman Shelly Betz told the Morgan County School Board Tuesday.
The Young Automotive Group, which recently bought out Carrigan Motors, would like to build a new development on 6.79 acres just west of the Young Ford dealership (formerly Barber Brothers Ford). The area is a prime location just off the Interstate 84 near the Morgan City exit.
Young is proposing a new 21,000 square foot Chrysler dealership in their first phase, as well as a 5,000 square foot commercial car wash and wholesale parts distribution center in future phases. Young Automotive Group is planning to complete the dealership by August of 2014. The car wash designed to service cars, RVS and semis has a projected finish date of August of 2015. Estimates put the number of new jobs created by the development to 60.
Currently, the proposed land is used for agriculture and is part of the greenbelt valued at $12,812 and bringing in a total of $168 in annual property taxes. Of that, the school district receives $100 each year while the county collects about $40 and the city collects about $26. When all three phases are completed, the project could generate a total of $81,607 in annual property taxes, of which the school could receive $48,436.
However, the Young Group is seeking an incentive to move forward with its plans that could benefit the tax base in the county. Morgan City leaders have proposed offering a post-performance tax incentive to the group by creating a Community Development Area (CDA). Part of this CDA is that each taxing entity has the ability to negotiate their own terms for the incentive.
City leaders propose a seven-year deal, where all taxing entities continue to receive the same property taxes they have always received from the property, as well as 20 percent of the new taxes created by the added value of the new improvements. Young would keep 80 percent of the new property taxes for those seven years as an incentive for developing a stronger tax base in the community.
That would mean Morgan County School District could receive an extra $65,938 total after seven years for their 20 percent (or $9,420 annually), while the county would receive $26,240, and the city would receive $16,913.
City leaders said the maximum increment Young could claim would be $327,000, which could be reached earlier than seven years. The seven-year time frame would begin after improvements in two phases are complete. After the seven years or $327,000, Young would pay all taxing entities property taxes in full.
City leaders said the CDA would open up a gateway to the highway commercial area, potentially enticing other commercial developments in the area.
The new development could substantially increase regional foot traffic in the area, bringing visitors to shop and eat in Morgan, Betz said.
Garth Robinson, of Young Automotive, agreed.
“We have considered the growth will be tremendous here. We are building on the freeway. It will bring more businesses here. It will get people to stop and notice with a second dealership,” he said. “Your business area can’t be seen from the freeway. People think it is a sleepy little town.”
“Morgan is the next area where we are going to see a lot of creative things taking place,” said School Board President Bruce Galbraith.
Despite the promise of a new development, city leaders are proceeding cautiously.
“We were cautious,” Morgan City Mayor Jim Egbert said. “We studied and researched, and felt the CDA was a way to help our community and schools with a tax base.”
In the meantime, the former location of Carrigan Motors could become the home of a new retailer, perhaps a repair shop. Robinson said he already has interest in the properties. The city may also be interested in some of the real estate.
Egbert said the city intends to keep the former location all retail to keep generating taxes.
School Boardmember Ken Durrant praised the city for its efforts to accommodate Young. “I have to give credit to the city for taking the first step toward developing the county the way it should be developed,” he said. “Down the road this will help us. I am excited about it.”