GOOD HOPE — AGCOR Steel is planning an expansion, and the city of Good Hope has approved a tax abatement to help the company cover some of the costs of its $2.3 million investment.
Under the resolution passed by the Good Hope City Council during Monday night’s meeting, AGCOR will be exempt from state and local noneducational ad valorem taxes and any construction related transaction taxes for the next 10 years.
AGCOR President Zac Smith said AGCOR had 15-17 employees when the company moved to Good Hope last July, and it has now grown to 54 employees since the move.
The $2 million expansion of a new building and equipment will let the company add from 15-20 employees over the next two years, he said.
Smith said AGCOR will likely begin purchasing new equipment for the expansion this month, and the new building should be built next year.
City Planner Corey Harbison said tax abatements are common for municipalities to encourage growth and expansion among local industries, and Smith has a proven record with the city to warrant this abatement.
“I see it as a win for the community, because Zac’s already shown the community that he’s going to produce the numbers and go above and beyond what they project,” he said.
The tax abatement will include around $25,000 in taxes that AGCOR would have paid Good Hope over those 10 years, but Harbison pointed out that the abatement does not include any educational ad valorem taxes that the company will pay — which means local schools will still see the benefit from the company’s growth.
“Anything that he does with that property is going to be more money that pours into the coffers of the county school system,” he said. “And that’s a good thing to see that money go to schools because they need it.”
The city will still see taxes from any retail sales that AGCOR has in the coming years, and the additional employees working there will pay taxes and use their money in the community, so Good Hope will still see plenty of benefits from the company’s presence in the city, Harbison said.
This isn’t the first time that Good Hope has worked on a tax abatement for AGCOR, as the company originally agreed to move to the city after Good Hope, Cullman and Cullman County each provided a $133,334 sales tax incentive to help the company pay for its site on Industrial Drive.
“We greatly appreciate everything, all the support, both from the community and the council,” Smith said. “Thank you, we appreciate it and look forward to continued success as we stay here in Good Hope for many years to come.”