Denton board recommends United States Cold Storage for Texas Enterprise Zone nomination

The Economic Development Partnership Board on Sept. 10 voted to recommend the City Council nominate United States Cold Storage LP for designation as an enterprise project under the Texas Enterprise Zone program, a state incentive that can reimburse companies for sales and use taxes tied to qualified expenditures.

Erica Sullivan, the city’s economic development program administrator, told the board the company plans about a $35 million expansion at its Denton facility, including a roughly 100,000-square-foot addition and investment in machinery and equipment. Sullivan said the project, if all new and retained jobs qualify, could yield up to about $800,000 in state refunds tied to job creation and capital investment.

The board’s recommendation is a step in a two-part local process: the city must both provide a local incentive and pass a nomination via resolution before the company applies to the state. Sullivan said Denton has six nominations available for the current biennium and that this would be the city’s first nomination in that cycle; if approved, five would remain.

Board discussion covered program basics and eligibility criteria, including the requirement that new and retained jobs work a minimum of 1,820 hours per year (a 35-hour workweek, 52 weeks) and that projects located inside an enterprise zone must meet a 25% economically disadvantaged hire threshold. Sullivan noted the company’s facility is within an enterprise zone, which affects the disadvantaged-resident threshold for qualifying hires.

Jason moved the board recommendation; Rick seconded. The chair called the question, members voiced their approval and the motion passed with no opposition noted.

Sullivan said the company intends to apply in the state’s December application round. She told the board the local nomination and incentive process imposes no fiscal impact on the city if the nomination is approved and the state later awards reimbursement to the company.

Background: the Texas Enterprise Zone program reimburses qualifying companies based on capital investment, jobs created or retained, and hires of economically disadvantaged individuals or veterans. Sullivan said double- and triple-tier project categories on the state table apply only to new jobs, not retained jobs. The city previously reviewed this project in May; city council approved the local incentive in July, and the board’s Sept. 10 vote forwards the nomination to the council for consideration.

The board did not set any additional conditions at the meeting; the next formal step is city council consideration of a nomination resolution followed by the company’s state application.