COVINGTON - The first business to take advantage of incentives intended to spur economic development in Covington had an incentive package approved by the City Council Monday night.
A manufacturing industry, identified by the code name Project Pine, intends to expand to an undisclosed location within the city. The business has not closed on the property it is targeting said Vice President Richard Davis, adding that he can’t say with certainty yet that the expansion will take place.
The council agreed Monday night to an incentive package worth more than $60,000, including: 20 percent reduction on electric rates for two years and 10 percent reduction for a third year, a total discount of $22,447; replacing an existing transformer with a new transformer at a cost of between $10,000 and $11,000; installing a new transformer when needed at a cost of up to $10,000; installing a new transformer and new primary cable at an approximate cost to the city of $15,000; if desired, providing and installing new security lights; waiving of permit fees totaling $4,205; and 20 percent reduction on stormwater fees for two years.
Former City Manager Steve Horton, who assisted with the incentive process and still does part-time work for the city, primarily at the airport, said the city will begin to break even after 4.7 years, according to an analysis by Electric Cities of Georgia.
The incentives were approved under the code name Project Pine, as requested by the company. Davis was present at the meeting and spoke in general about the project on Tuesday.
“It was definitely a very strong component of our decision to stay here in Covington,” Davis said of the fact that the city offered the incentives, adding that other counties were considered. He said the city staff was very easy to work with, also contributing to the decision to stay in Covington.
If all goes as planned, the expansion could happen by fall, Davis said. The business has been in Covington for 12 years and employs 17, not counting two new hires recently made, and five additional hires which will be made by the end of the year, Davis said.
In a letter to the city, Davis said the business will move to an existing facility and also build an additional 10,000 square feet at that site. The renovation and construction cost alone will total $750,000. The move will allow the business to add more machinery necessary to grow its customer base, and capital equipment investment is expected to total more than $600,000.
With all the talk about Baxter International and big industries, Davis said he’s pleased to know the city values small businesses.
The incentives offered were part of an economic development incentive package proposed by Mayor Ronnie Johnston and just approved by the city council in March.
“The benefactor is the community as a whole with added jobs, investments made, taxes paid, etc. that will take place within the community,” said Johnston. “In the short run there is some loss with the incentives provided, but the utility incentives losses are expected to be recouped overtime. It really is a tradeoff wherein you forego some short term losses in exchange for the long term benefits that new and expanding businesses will bring to the community.”