Danville approves tax incentives for up to 170 new jobs
Published 11:41 am Wednesday, September 27, 2017
Danville finalized tax incentives for two companies and began the approval process for a third Monday night.
The tax incentives for Adkev Inc., Wilderness Trail Distillery and Denyo Manufacturing amount to about $477,000 the City of Danville would reimburse to the companies. The reimbursements would come out of payroll taxes paid on an estimated 170 new jobs that could be created by the companies.
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Danville commissioners approved second readings of ordinances granting up to $251,453.10 in reimbursements to Adkev Inc. over 15 years; and up to $43,598.88 in reimbursements to Wilderness Trail over 10 years. And they approved the first reading of an ordinance granting up to $181,979.86 to Denyo over 10 years.
The tax incentives amount to .72 percent of the 1.9 percent in payroll tax Danville assesses on all paychecks in city limits, meaning the city will collect a net payroll tax rate of 1.18 percent on those new jobs.
Danville’s local tax incentives serve as a match to state incentives also provided to the companies. City Manager Ron Scott said the incentives are the city’s “standard approach” for businesses that create 10 or more new jobs.
A “job development incentive” sheet from the Danville-Boyle County Economic Development Partnership shows that Adkev expects to employ 25 people with a total payroll of about $972,000 in its first year of operation, currently slated for 2019. That number is expected to grow to 40 employees with a payroll of more than $1.4 million in year two, and continue growing to reach 70 employees with a payroll of about $2.56 million by year five, according to the sheet.
Similar sheets show the same kinds of statistics for Wilderness Trail Distillery and Denyo Manufacturing:
• Wilderness Traill expects to employ 10 new people with a total payroll of $442,000 in year one; swelling to 15 new people with a payroll of $663,000 in year five.
• Denyo Manufacturing expects to employ 66 new people in its first year of expansion, with a total payroll of more than $2 million; that’s projected to grow to 90 new people and almost $2.79 million in payroll by year seven.
Danville’s tax incentives work in tandem with incentives from Boyle County. The city provides .72 percent and the county provides .28, equaling a 1-percent reimbursement of payroll taxes once it’s all said and done.
Boyle County’s incentives are planned to equal up to $97,787.32 for Adkev; up to $16,955.12 for Wilderness Trail; and up to $70,769.94 for Denyo. The total amount Boyle could provide as incentives is $185,512.38.
The combined city-county total of incentives for all three companies over the lifespans of the incentives would be $662,544.22.
If all the proposed jobs are created, they would amount to approximately $6 million annually in new salaries. The city and county would collect about $159,000 in payroll taxes on that amount, about $60,000 of which would be reimbursed to the companies while the incentives are active.
If the companies do not reach their employment targets, they would not receive the full incentive amounts.
Hal Goode, chief operating officer for the EDP, told city commissioners Denyo will be building a new 63,000-square-foot facility at its current location in the light industrial park in order to do more fabrication of sheet-metal components. Denyo makes power generators.
“That business has really changed a lot over the past 15 years,” Goode said. “It’s very high-tech jobs; it’s state-of-the-art equipment for cutting, for bending, for welding steel and these are very complex, structural components — they’re going to do those on-site.”
Goode, who started in his position with the EDP on Sept. 5, said he believes “this could be the first of many expansions that we see from Denyo.”
“Sometimes we overlook the importance of taking care of our own,” Goode said. “When you start looking at the growth of your community, 70-75 percent of your growth — job creation, capital investment — is going to come from your existing businesses. So it’s really exciting for me to be here just a short period of time and see two or three projects my first month here come from existing businesses — and no more exciting than Denyo.”