Industrial development — and with it, more jobs — is on the rise in Claremore, showing no signs of slowing down.
The Claremore City Council will decide this month on a request from AXH Aircoolers for development financing assistance to purchase and renovate the old Burgess Norton building, as well as, construct an additional facility within the Claremore Industrial Park. AXH also has asked the city to create a tax increment district for the property.
Tax increment financing (TIF) is a method of financing the public costs associated with a private development project. Essentially, the property tax increases resulting from development are targeted to repay the public infrastructure investment required by a project.
The first of two public hearings on the proposal was held Monday night.
During his presentation, Dan McMahan, representing the City of Claremore, said that AXH is requesting $650,000 in financing assistance.
“They plan to spend between $6-$8 million in the renovating and building of these facilities,” McMahan said.
Last year, the company purchased 15 acres in the industrial park from the Claremore Industrial and Economic Development Authority (CIEDA) with plans to build a 110,000 square feet industrial facility to expand their operations.
Then, in November, AXH Owner Ken Jones approached CIEDA about purchasing the old Burgess Norton building, which they have been leasing, as well.
“By the time this transaction takes place, it will be $3.6 million that (Ken Jones) will have invested in this building. At the end of 2014 there will be 100 new jobs,” said City Manager Jim Thomas. “On that 15 acres, they will have over 500 employees (total) by the end this year.”
McMahan said the TIF does not cause an increase in property taxes or any new type of tax. The project plan stipulates the district will terminate after a maximum of 15 years.
In addition to the AXH increment district, the council will consider a proposal by the city and CIEDA to provide capital cost assistance in the amount of $70,000 to Claremore Public Schools to help offset the additional costs incurred by the school district from CIEDA’s industrial development activities.
“AXH — on its own — stepped up and said they would give $10,000 a year for seven years to the school,” Thomas said. “CIEDA is matching that, so the school will get $20,000 a year for the next seven years as a way to assist the school with its funding challenges.
The public-private partnership between the city and AXH to foster their expansion is similar to the relationship between city and Baker Hughes, Thomas said.
“They were thinking about going back to Houston when the city offered to build them an electrical substation to supply the power they needed to expand,” he said. “They said, ‘that’s the kind of partnership that will keep us in Claremore.’”
Baker Hughes now is planning on investing more in the future than originally thought, he added.
Thomas believes that is the key to economic development — government and business partnering together, using resources to expand and grow, which in turns benefits the entire community.
“We are committed to helping businesses grow in Claremore,” he said.
“As they continue to create jobs, our hope is that those employees will buy homes and live in the area, invest in the community themselves by spending their money here, and thus increase our sales tax (revenue).”
The second public hearing on both items, as well as the vote, will be held at a special city council meeting on April 14.