Washington County committee refers Packaging Specialties’ $24 million expansion, seeks tax‑back endorsement

Packaging Specialties told the Washington County County Services Committee that it plans to expand its Fayetteville operations with roughly $24,000,000 in new investment and about 100 new jobs over the next three to five years. County officials and county staff then referred a local resolution endorsing the company’s application for a state sales‑tax refund incentive to the full quorum court with a do‑pass recommendation.

The company’s representative, Nick Gugliomi, said Packaging Specialties currently employs about 240 people in Washington County and expects the expansion to add 100 positions. Mark Goodman, economic development director for the Fayetteville Chamber of Commerce, presented the chamber’s economic‑impact model and said the project’s employment multiplier is about 1.56, which the chamber estimates would generate roughly 56 additional jobs in the community beyond the 100 direct positions.

County questions focused on how the incentive works and how much local tax revenue would be foregone. Chung Tan, an economic developer for the city of Fayetteville, told the committee that the tax‑back tool refunds a portion of the local sales and use taxes that would otherwise flow to the county and city; she said the state will not refund the 6.5% portion that supports state pension obligations. Tan said local shares are roughly 2% for the city and 1.225% for Washington County and that the refund applies to qualifying purchases of building materials, machinery and equipment rather than the company’s product sales.

County Attorney Bridal Lester said the program is typically applied to expansion purchases and not to product sales, and that the Arkansas Economic Development Commission administers the state package and may require the company to meet investment and job guarantees. Lester noted the county’s sales and use tax rate of about 1.25% and estimated that if all $24 million were spent locally the county’s direct loss would be modest and substantially offset by new payroll and property tax revenue in most scenarios.

Several justices asked how long the refund period would run; company representatives said the company expects to make the purchases over three to five years, and attendees said typical tax‑back terms vary but that the company is not seeking a long‑term tax abatement in the manner of larger projects.

The committee voted to forward the local endorsement resolution to the full quorum court for final consideration and to include it on the county’s packet to the state as part of the Consolidated Incentive Act application process (ACA 15‑4‑2706). The referral carried on a do‑pass recommendation.

Next steps: the item will appear on the full quorum court agenda for a final local certification vote before the company’s application proceeds with the Arkansas Economic Development Commission.