Chapel Hill News

Chatham to consider incentives for poultry facility

The Chatham County Board of Commissioners will hold a public hearing Monday to get input from residents on a request from Mountaire Farms for county incentives to support its new poultry processing operations in Siler City.

The hearing will be part of the 6 p.m. regular session at the Historic Courthouse in Pittsboro.

In May of 2016, Mountaire Farms announced the purchase and renovation of the former Townsend Facility in Siler City, purchase of the Townsend Main Office, purchase of the former Kellwood facility and expansion of the Mt. Vernon Hatchery. The entire project is expected to bring 714 jobs with an average weekly wage of $539.21 and a capital investment of $70.77 million.

“Given the total economic impact, we believe that the proposed incentives are a very good investment for Chatham County,” Kyle Touchstone, president of the Chatham Economic Development Corporation (EDC), said in a news release. “The impact on local sales tax revenues and property tax base also are very positive.”

Touchstone said that the requested property tax incentives are consistent with Level 4 of the county’s incentives policy, based on the jobs created and capital investment. Level 4 incentives provide the following:

▪ Year 1 – 90 percent of taxes paid

▪ Year 2 – 80 percent of taxes paid

▪ Year 3 – 70 percent of taxes paid

▪ Year 4 – 60 percent of taxes paid

▪ Year 5 – 50 percent of taxes paid

▪ Year 6 –incentives end

Chatham County still comes out ahead in terms of tax revenues since it keeps an increasingly larger share of property taxes paid by Mountaire Farms until the incentives are phased out in year six, Touchstone noted in the release.

To determine the level of incentives, the EDC conducted a study of the economic impact of the Mountaire Farms expansion. The model developed by Economic Modeling Specialists International (EMSI) looked at four major categories of expected economic impact of the project.

The study shows that for every job created by poultry producers like Mountaire Farms, another 0.32 jobs is created in the local economy. For every dollar in sales made, another 19 cents of sales is produced locally. For every dollar of total employee earnings, another 28 cents of earnings is generated locally.

Using these factors, the release said the new processing plant would have the following impact:

▪ Initial Impact: 700 employees, $19.55 million in employee earnings and $187.67 million in sales

▪ Total Impact (including multiplier effect above): 922 jobs, $22.96 million in earnings and $223.23 million in sales.

For the hatchery expansion, the study found the following expected impact:

▪ Initial Impact: 14 new employees, $475,000 in employee earnings and $3.55 million in sales.

▪ Total Impact (including multiplier effect above): 18 jobs, $590,750 earnings and $4.01 million in sales.

The study indicates that the Mountaire Farms projects will increase their overall property value by an estimated $67.67 million. Based on this estimated value increase, Mountaire Farms would pay an additional $429,000 per year in property taxes. Currently, a half-penny on the tax rate is about $500,000.

The construction work involved will have major non-recurring impacts, including 142 local workers with about $4.2 million in earnings and $11.6 million in sales.