Mineral Wells Area News

City Recruits Manufacturing Plant to MW

City Recruits Manufacturing Plant to MW
July 18
20:52 2021

A 380 Economic Development Incentive Agreement was signed between the City of Mineral Wells and Shumard Corporation, d/b/a Associated Fiberglass Enterprises that establishes a 35-year long term to relocate their manufacturing plant and business headquarters to the community.

AFE, who’s main source of business utilizes fiberglass technologies, will build a manufacturing facility as well as their business headquarters on15 acres of land owned by the city just north of the golf course as well as on Lot 1 of Block 1 of the MW Industrial Reserve Addition.

“What we’ve got here is what I think will be a ground-breaking type industry coming to Mineral Wells,” said City Manager Randy Criswell. “This is a pretty big day for Mineral Wells with regard to us kind of getting back in the incentivizing of manufacturing and industry in a way that is probably really gonna be a game changer for the community.”

According to Criswell, AFE has taken a proven technology with the use of fiberglass and patented a process that has improved the process of years old technology. “This company has the ability to make a real difference in the trenchless pipe repair industry,” said Criswell.     

Economic Development Director David Hawes explained that AFE’s proven patented process has to do with its bonding agent.  “That’s the real innovation. They already have contracts with cities in the metroplex, New Orleans, and in New York City.”

Hawes said this agreement negotiations began in December of 2019 and started with a desire to open a subsidiary business here with about 4 or 5 employees. “Well that’s not what’s going to happen here. It’s going to be much bigger and brighter than that. They are going to move their whole operation here. I really could see this as the next company as large as Cantex,” said Hawes.

Chapter 380 Economic Development is an economic incentive law that allows municipalities to utilize almost any asset that the city has to incentivize economic development. City council adopted a local 380 Economic Development Plan in October of 2020 to facilitate business growth in the city. This agreement is the first of its kind for the community.

Economic Incentives

The agreement between the two entities calls for the AFE to relocate its manufacturing operations and business headquarters to MW and construct a facility for manufacturing business products at a minimum cost of $900K and to purchase capital equipment to be used on site for business manufacturing at a minimum cost of $400,000. AFE will have 12 months to construct the facilities and have a Certificate of Occupancy (CO) issued. They are required within 90 days of the CO issuance to hire at least 28 full time employees with an average wage of $16 per hour and then 40 employees at the same rate average after 24 months of the CO issuance. These numbers are required for the duration of the 35-year agreement.

In exchange for AFE’s relocation, the city will secure private third-party financing in the amount of $2,804,194 for the company to construct business facilities and the city agrees to deliver those funds within 60 days of signed agreement. AFE will be responsible for the note payment. The city will manage the property taxes on the facility for the first 10 years of the agreement. The incentive will also allow for AFE to lease the newly built facilities from the city for $1.00 for 30 years

“We’ve all experienced in the past, seen companies been given incentives here and then the day after they have met their term they say, oh by the way, we are leaving. Not in this case. The agreement maintains this business will be in the community for 35 years. At any time during the term, once full payment of the debt is made, AFE can purchase the property from the city,” said Hawes.

“We’re protecting the citizens of Mineral Wells by owning the land, the building and the equipment. We will not turn it over to them.” Hawes said in the past, the entity has owned everything. ‘“We will now own everything.  We carry a heavy stick here. Where we own the land, we own the building, and we own the equipment and they have to meet all of those conditions, otherwise they lose it.”

“This project is not what you’ve seen typically over the last 20 years. We are taking a very different approach that has not been used before, we are using the 380 Agreement for manufacturing development, Hawes explained.

            He says the loan has been approved by a lender and they are in the middle of completing the paperwork. He says AFE plans to spend over $1.2 million on the project in the first 60 days. Also worth mentioning, and while it’s not the bulk of business for AFE, area citizens may have already seen some of their craftmanship. According to Hawes, they manufacture the life-size cow for Chik-Fila and the stagecoach signs for Wells Fargo.

 

City Signs Historic 380 Economic Incentive Agreement

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