One more box was checked Monday afternoon in a process to bring a Global Fortune 500 company to the county.
The Williamson County Budget Committee unanimously agreed to a tax incentive that helps make opening an office here attractive to Schneider Electric USA.
The Paris, France-based global specialist in energy management and automation would get up to $2.11 million in tax rebates over 10 years by meeting employment markers. The agreement has Schneider bringing up to 1,140 jobs to the county, at 6700 Tower Circle in Franklin. Schneider would open a 150,000 to 180,000 square foot office at Two Franklin Park. The total economic impact of the company over that time is expected to be $79 million.
Williamson County is in competition with several other locations. Before Schneider makes a choice, the county has to commit.
Last month, the Tax Committee unanimously approved the Tax Increment Financing (TIF), the economic tool being used by the county in this case as an incentive (explained below).
On Tuesday the matter goes before the Economic Development Board, and if it passes there the last hurdle is the County Commisson on June 13.
“After that it is up to Schneider,” said Kenneth Young, a lawyer consulting with the deal.
To earn the rebate, the 180-year old company, which has 180,000 employees around the world, 30,000 in the U.S. and 1,600 currently in the state, will have to bring 80 percent of the jobs projected in the deal- or 916- to the county by 2023.
Because the jobs will increase base disposable income spent here- they average a salary of $73,000 per year plus benefits- the county would make money back on the deal over time.
“It is one of the highest wage deals I have ever worked on in four decades,” said economic development lawyer Thomas Trent.
However these are not all created jobs, but jobs new to the county. 250 of the jobs would be new to the state. Schneider currently has employees working in LaVergne, Murfreesboro and elsewhere.
Its national American headquarters are in Boston, with offices in Raleigh, NC, the San Francisco Bay Area of California, and Chicago.
“Consolidation is the goal here,” Ryan Stanton, smart cities account manager for Schneider, representing the company at the meeting, said. The jobs are to mostly be engineering and research and development positions.
Stanton said at the Tax Committee meeting that Chicago would lose Schneider employees that Williamson County gains.
Construction would be complete on the new office by 2018.
With the TIF, the county would, at maximum, give Schneider a $2,110,254 break in property taxes over ten years. However, this break happens only if Schneider has created at least 912 jobs, or 80 percent of the maximum.
As explained by Trent, Tax Increment Financing can work over time, or as an upfront incentive. The company undertaking the project can arrange to make a loan through the Industrial Development Board. Then all or a part of the increase in property tax as a result of the project is called the increment. That dollar amount can be used to repay the loan, so that money is available up front.
All or part of the increment can also be used to simply pay for costs of the project being incentivized over time.
“The incentive is truly performance based,” Trent said. “If you don’t get the property tax increased, there is no increment.”
When a project is built or constructed on a tract of land, the property taxes will go up as the value of the site is increased. In the case of a TIF, the county trustee will pay the county an amount equal to the property tax for the year before the TIF plan is approved. In Williamson County, the next 42 percent of the increment (the increased taxes) will go to Williamson schools. Up to the remaining 58 percent of the increment could go back to the Industrial Development Board to provide an incentive for the company.
