Correction: The initial web version of this article mistakenly listed the number of years during which Project Pine would add seven new employees. The new employees are expected to be added by the end of 2013.
The Covington City Council approved its first small business incentive package Monday night, only a few weeks after the mayor first proposed the idea.
The council unanimously approved offering incentives to an unnamed, existing small business, dubbed Project Pine, which is planning to expand and hire seven new employees by the end of the year.
The company is not being disclosed because it is still negotiating to purchase a piece of property. If the property is purchased, the company will renovate the building and add an additional 10,000 square feet at a total cost of $750,000 and add $600,000 in equipment. The company currently employs 17 people at an average salary of $44,470.
The company, represented by its vice president Richard Davis, opened in 2001 in a small rental space, according to paperwork it submitted to the city.
“We started out as a couple of guys with a specific set of skills and a dream to start our own business. Since then, we have grown to the point where we need to make some big decisions in the life of our company,” Davis said in a letter to the city. “We currently have the opportunity to expand our business and plan to purchase a property that will be our long-term home. We are currently in the due-diligence phase of the decision process and there are several factors that need to be weighed in order to ensure that our goals align with the goals of the community and its leadership.”
Mayor Ronnie Johnston, who proposed the incentives to try to spur retail and small business growth in Covington, said it was hard to say whether the incentives prompted the expansion, but the incentives were designed to really to seal the deal and to show businesses Covington is serious about helping them be successful.
“That was the whole purpose because it said to the masses the city of Covington is interested in working with you to make this as much of a win-win as you possibly can,” Johnston said. “As far as incentives with electrical, we’re taking a little hit on the margin, but it’s insignificant because it’s short term; this is not a tax abatement deal.”
The incentives are tied to the level of investment by a company; in this case, the company wasn’t hiring a lot of employees but was making a sizable investment in renovations and equipment.
The incentives approved by the city, if the company moves into a new location in the city, include:
• A three-year reduction in the electricity rate (a 20 percent reduction for the first two years and a 10 percent reduction for the third year — the discount could be worth $22,447, according to paperwork from the city)
• A 20 percent stormwater fee credit for two years — which would be worth $94.86
• A $4,205 reduction in permit and plan fees.
No gas or water and sewer rate reduction will be offered because of expected low usage.
The company’s customers include Lithonia Lighting, Evans Tool and Die, Komatsu Forklift in North Carolina (which formerly had an office in Covington), Clairon Metals, SKC and others outside of the community.
In addition, the city will make upgrades to its infrastructure at no cost to Project Pine, including:
• Replacing the existing 75-kilovolt amp transformer with a new 300-kilovolt amp transformer at an estimated cost of $10,000-$11,000
• Providing and installing a new transformer for the new building at an estimated cost of $9,500-$10,000
• Providing and installing a new transformer and associated cable in the future for an estimated cost of $15,000-$16,000
• Providing, installing and maintaining leased security lights.