Two Baton Rouge-based manufacturers are on track to land industrial tax exemptions for multi-million dollar expansions.
Applications for Stupp Bros Inc. and International Mezzo Technologies Inc. sailed through the Metro Council on Wednesday and then the East Baton Rouge Parish School Board on Thursday, passing both in unanimous votes. The last stop is Sheriff Sid Gautreaux, who plans to consider approving the tax-exemption requests early next week, said a representative of the law enforcement agency.
The two companies are seeking tax breaks via the decades-old Industrial Tax Exemption Program. ITEP gives property tax breaks to manufacturers that plan to spend money on expansions or improvements.
In June 2016 and then again in August 2018, ITEP rules changed. So instead of a 100 percent property tax exemption over 10 years it has shifted to two five-year exemptions with no more than 80 percent of property tax abatement during that time frame.
And local taxing authorities now have an opportunity to say “yea” or “nay” to the portion of the tax breaks that applies to them. Heretofore, the Louisiana Board of Commerce and Industry was the sole arbiter of ITEP applications.
Both the Metro Council and the parish School Board have adopted guidelines for ITEP applicants. But there are applications still in the pipeline that predate the latest August 2018 rules.
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Stupp’s application falls under the new rules while International Mezzo first began the process under the old rules. Stupp’s project won’t be over until early 2021 while International Mezzo’s work is largely complete.
Stupp, a manufacturer of steel pipes, is doing the bigger expansion of the two, adding an estimated 128 jobs. The company is in line for a break of $2.5 million over 10 years. International Mezzo, which manufactures heat exchangers, is doing an expansion that adds two jobs and is in line for a break of $13,365 over 10 years.
Stupp expects to invest $22 million to modernize its Baton Rouge steel manufacturing facilities, which date back to the 1950s. The manufacturer expects to hire 128 employees and retain 338 workers at the company. Company officials say they are seeking to meet an uptick in demand for steel pipe.
Donnie Miller, director of business development for the Baton Rouge Area Chamber, spoke in support of both requests. For the Stupp project, the company is also hiring an estimated 64 contractors, he noted.
“It’s a significant investment in the community,” Miller said. “We’re going to see the effects for a long time.”
International Mezzo is investing $93,100 in new machinery. The business already has 42 employees and is hiring two more. The value of the 10-year property tax deferment is worth $13,365 for the manufacturer.
“It is a fantastic company doing great things, and we want to help this company to grow,” Miller said.
Miller said the company is still adding equipment.
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The School Board made news in January when it rejected ExxonMobil’s ITEP request for two property tax breaks, one for work at its Baton Rouge refinery and another at its polyolefins plant. ExxonMobil subsequently withdrew the request.
It was a rare defeat for ExxonMobil, which has received hundreds of ITEP exemptions through the decades, and a big victory for critics of the program, including the faith-based advocacy group Together Baton Rouge and school employee groups, including the two teacher unions.
Since then, those groups have held their fire, not opposing either the latest requests or a successful request in June.