IP, Cameron OK’d for county tax breaks

Published 12:51 pm Tuesday, June 24, 2014

Exemptions from property taxes calculated by Warren County was extended Monday to two long-tenured industries as county supervisors, tried at great pains, to distinguish it from a tax abatement program at the heart of a public hearing in three weeks.

International Paper received an exemption on more than $26 million in new equipment and upgrades to its Redwood mill in 2013. Cameron Inc., formerly LeTourneau Technologies, was approved one for personal property taxes to apply to $2.3 million in expansions and supplies bought last year. Each are good for 10 years and were OK’d on the basis of a “preliminary order” signed for each by Board President Bill Lauderdale. The vote on each request was 5-0. Each becomes official once the state Department of Revenue approves the county’s land roll later this year. Personal property refers to assets not tied to land.

Upgrades to IP’s hardwood digester and lime kiln made up about $6.2 million of what the Memphis-based paper and packaging giant spent on the mill in 2013, according to an exhibit filed with the request.

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“The additions and expansions allow us to stay competitive in this industry,” plant manager Tom Olstad said before the vote, adding no jobs would be added to the current labor force of 300 or so. About 800 contract workers worked at the plant during a 36-day shutdown last year as part of the overall upgrade, Olstad said.

Cameron’s upgrades are worth $2,318,305, according to the half-page order pertaining to its request. No exhibits or other inventoried list accompanied it, however. In December 2012, the oil services company said the expansion underway at the south Warren County yard involved buying presses, a paint booth, cranes and a new sprinkler system.

Instead, a “position statement” from the Tax Assessor’s Office was filed with Cameron’s request. On it, the upgrades were listed as “oil rig components” and the same date — Dec. 31, 2013 — was entered for the improvements’ completion and expansion. John Lewis, the office’s contract appraiser for personal property, signed the statement, which was faxed from Lewis’ Brandon-based company, Statewide Appraisal Services.

Improvements granted by county and city boards to industries for buying new equipment or adding onto a physical plant follows Mississippi Code Section 27-31-101, or the “new enterprises” law. It cuts county taxes on the new inventory for 10 years, but leaves school taxes alone. The law specifies 11 types of “enterprises” as being eligible — warehouse/distribution centers, manufacturing, processors and refineries, research facilities, corporate regional or national headquarters, movie studios, airports, recreational facilities and enterprises in data/information processing, technology, health care facilities and telecommunications.

It differs from the much-debated tax abatement program that follows Section 17-21-5, which allows counties and cities to exempt all but school taxes for seven years for properties in central business districts, historic preservation districts, business improvement districts, urban renewal districts, and historic landmarks. Cities are given the latitude to define each as they see fit. Vicksburg has tied eligibility for its abatement program to whether the Inspections Department has issued a remodeled business or property a building permit.

County officials plan a public hearing July 21 on plans to scrap and rewrite its abatement ordinance. That program differs from the city’s in that it doesn’t include multifamily structures and says a property must have been demolished first, then redeveloped at a minimum cost of $300,000.

Two abatements OK’d by the city in 2013, both for car dealerships along the Interstate 20 frontage roads, spurred discomfort on the county board when they granted their half of the tax break. Chief among issues supervisors had with each was that it was outside Vicksburg’s historic preservation district, where the vast majority of requests in past years had come.

“This is just a partial exemption on the expansion,” Board President Bill Lauderdale said during the votes on IP and Cameron’s requests. “These people are providing jobs for our community and making everything work. This is completely different from retail sales.

IP paid $342,410.60 in real property taxes for 2013 on parcels that include its main plant and most essential buildings, according to tax records. The company owns and pays taxes several other parcels of undeveloped land. Eight company-owned structures carry tax exemptions, the last of which comes off the books in 2020, records show.

Cameron paid $134,872.53 in real property taxes on its roughly 100-acre tract of riverside land that includes in main yard, office, parking lot and ancillary holdings. It also owns several other small parcels of undeveloped land. Last week, supervisors and city officials nixed separately-filed applications by Texas-based Brownstone to exempt property taxes for Aeolian Senior Apartments and the soon-to-be-rebuilt former Carr Central building. The company had asked each board to drop their request, saying the firm was to pursue “Section 42” designation from the state. The status bases taxes for rent-assisted property on income generated rather than property value.