Tyson Expansion: Poultry giant proposes $136M plant in Green Forest

Friday, April 15, 2016

Carroll County's largest employer hopes to get even larger.

Representatives of Tyson Foods Inc. on Wednesday presented the Carroll County Quorum Court's finance committee with a proposal to build a new processing facility near Tyson's existing plant in Green Forest.

Tyson officials estimated construction costs for the proposed plant at $136 million and said that once the facility is fully operational, it will create about 85 jobs.

"I'm excited," Green Forest Mayor Charles Reece said Thursday. "We haven't seen anything like this in 20 years. I appreciate Tyson going to bat for us."

Tyson already employs nearly 3,000 people in Carroll County, with processing plants in both Berryville and Green Forest, as well as a hatchery, a truck shop and a grow-out office in Green Forest. The company's annual payroll in Carroll County is $138 million, not including the hundreds of local farmers who supply chickens to the local plants.

The new project is contingent on financial incentives from the county and state. Tyson officials said they would like the county to agree to a tax abatement that would waive 65 percent of the property taxes on the new facility for 10 years.

Such an abatement is legal in Arkansas under Act 9 of 1960, the Municipalities and Counties

Industrial Development Revenue Bond Act, which authorizes cities and counties to issue revenue bonds for industrial development or expansion. After the 10-year abatement, Tyson would be responsible for paying the full amount of property tax on the new plant.

The new plant would cover more than 200,000 square feet across the street from the existing Green Forest plant. Plans call for the facilities to be connected by a corridor. Improvements would include new equipment and production lines, as well as processes and technology designed to benefit food safety, quality and workplace safety. Construction could begin as early as summer and the project would be completed in late 2017.

At Wednesday's meeting, Tyson officials said construction of the new plant would not change the number of chickens needed for operations in Carroll County but would increase the facility's partially cooked capacity, increasing efficiency by reducing transportation of products to other locations for further processing.

Justices of the Peace who attended Wednesday's committee meeting seemed generally supportive of the project, although the proposed tax abatement did generate some comments from JPs who said the idea might not sit well with residents and other local businesses.

"This is gonna open a big can of worms," said JP Larry Swofford, who nevertheless expressed support for the project. "I'm gonna get out in my community and talk to my constituents. I feel like it's the way to go."

JP Lamont Richie pointed out that although the county wouldn't collect the full amount of property taxes on the new plant for the first 10 years, it would still collect a portion of the money. An influx of construction workers and other visitors also would provide an economic boost to the county, as would the jobs created by the new facility.

"In all fairness, if this doesn't go through, we stand to lose a lot in the long term," Richie said.

Carroll County Judge Sam Barr also indicated support for the project.

"I think it all boils down to, do you want our county to stand still and fall behind, or do you want us to move forward?" Barr said.

Tax rate

According to the Carroll County assessor's office, the property where the new plant would be located is taxed at a rate of 46 mills.

For the purpose of calculating property taxes, the millage is applied to the assessed value of a particular property, with one mill equaling one tenth of one percent. In most cases, the assessed value of a property is calculated as 20 percent of the appraised value. Thus, for a property with an appraised value of $100,000 and a tax rate of 46 mills, the annual property tax would be $920. Although there is no way to calculate the actual appraised value of Tyson's proposed new plant, the tax on a property with an appraised value of $136 million and a tax rate of 46 mills would total $1,251,200. An abatement of 65 percent would lower that total to $437,920.

The majority of the property taxes collected on the new plant would go to the Green Forest School District, with 36 mills dedicated to the school district, five mills to the county's general fund, three mills to the county's road fund and two mills to the county library. Thus, the school district would be most affected by a tax abatement.

Dr. Matt Summers, superintendent of Green Forest schools, said he is firmly in support of the project.

"You have to look at it from a big-picture economic view," Summers said. "It means more jobs and more people. As far as the tax abatement goes, 35 percent is better than zero percent. Growth is growth. I think you have to stop and look at the big picture."

Bond issue

In order for the project to move forward under Act 9, the county government would serve as a conduit for issuing industrial revenue bonds and would be the legal owner of the new plant with the bonds as collateral. The county would then lease the property back to Tyson, with the lease payments going to the bond trustee to pay off the bonds instead of to the county. Once the debt was paid off, Tyson would own the property.

Act 9 allows local governments to waive the industry's property taxes on the real and/or personal property purchased by the bonds in favor of in-lieu-of-tax payments for which the local government sets the formula. The bond-issuing government is not responsible for repayment of the debt. That is the responsibility of the industry for which the bonds were issued.

Next step

The next step in the process is for the county to hire attorneys to handle the bond issue. Tyson has recommended the Little Rock-based law firm, Eldredge & Clark, Friday saying the firm has extensive experience in bond issues. Although the firm would represent the county, its fees would be paid by Tyson.

Tonya Byers, plant manager for Tyson's Green Forest plant, is scheduled to address the quorum court at its next regular meeting, which begins at 6 p.m. Monday, April 18, in the courtroom at the Carroll County Eastern District Courthouse in Berryville.

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