Ellis County commissioners will consider a tax abatement agreement at their Sept. 22 meeting for the Sunrider Corporation, which looks to open a new manufacturing facility in Midlothian Business Park off of Miller Road and Challenger Drive.
Midlothian Economic Development President and CEO Kyle Kinateder presented information about the development to commissioners at their Sept. 8 meeting.
“This is a project that we have been working on for several months out in a park that has been in the works five-plus years,” Kinateder said. “So, this is really exciting for us and the entire county as we are finally seeing some of these pieces come together.
“What is proposed is a tax abatement for the Ellis County portion of the ad valorem taxes,” he said. “One of the things to highlight and make the court aware of is that this only deals with the new incremental value, which is there. We have accepted abase value that would be in place if it were not owned by a public entity. So, though the fact that there is zero ad valorem value there now, we have identified a base value as it were though it is owned by a private entity.”
Sunrider, which is based in Torrance, California, controls all of its product development, research and development, quality control, product formulation, manufacturing and final packaging. The company manufactures a variety of items, including food, drinks, herbal nutrition, beauty and body, and household products.
Sunrider Vice President for global manufacturing Eric Chen also spoke to the commissioners.
“Everything that we do is made in that Los Angeles facility,” he said. “We have three other facilities in Asia and they only supply products for those markets. We make all of our base material here and all of those health and wellness products in our Los Angeles facility. They will package it over there.
“We do everything in-house and that is our philosophy at Sunrider,” he said. “We employ all different kinds of people. We have machine operators, packagers, line workers and R&D scientists.”
Overseeing their own products ensures quality control, Chen said, noting that the company produces more than 400 items.
With the tax abatement agreement, Sunrider and Earth Root Holdings LLC agree to purchase and construct a 600,000 square foot facility that would see a later expansion of 300,000 square feet. The county 55% tax abatement on all real and personal property would be for 10 years.
“The company must maintain these minimum annual performance standards criteria,” Kinateder said. “So, when we talk about an agreement that is mutually beneficial, we want to make sure there are built-in guarantees for us as a community to make sure we get what we are asking for.
“Each year the company will be required to certify that they have met each of these items before they receive their tax abatement for that year,” he said. “If they fail to meet these then the agreement would either come back to the commissioners and you can do an adjustment to that agreement or it cancels. If we as a community are not going to get what we agreed to then the company would not receive that tax abatement.”
In total, the county would gain about $900,000, the city of Midlothian $1.9 million and Midlothian ISD about $8.8 million over the abatement’s 10 years. The project does not require any immediate, direct county services since it is located within the city of Midlothian. In the abatement’s second year, there would have to be $51 million of taxable value in place on the property; by year 10, there has to be $53 million.
The city of Midlothian will have to establish a new tax abatement reinvestment zone in the Midlothian Business Park; the Midlothian City Council approved a tax abatement for Sunrider and Earth Root Holdings LLC at its Sept. 8 meeting.
For more information about Sunrider, visit its website at www.sunrider.com.