Guadalupe County commissioners and the Cibolo City Council approved an economic incentive package Tuesday for a major Toyota supplier planning to bring a $400 million plant and 900 jobs to the region, signaling an expansion of Toyota’s presence in San Antonio.
Members of the council and commissioners court gathered for a special joint meeting in council chambers and approved tax abatement agreements for AW Texas, a U.S. subsidiary of Aisin AW Co. The Japanese manufacturer of drivetrains, transmissions, and vehicle information technology plans to invest $400 million in a manufacturing site along Interstate 10 and break ground on the plant in September, further indicating that Toyota’s presence in San Antonio could grow soon.
The 159-acre site is located in a former extraterritorial jurisdiction for Cibolo along I-10 at South Santa Clara Road that the suburban city annexed in June. AW Texas is purchasing the land, which sits in a reinvestment zone designated by the City Council in June from the Guadalupe Valley Development Corporation (GVDC), which is part of the local energy cooperative GVEC.
The 20-year agreement with the City of Cibolo includes a tax abatement of 75 percent of property taxes for the first 10 years, 50 percent for the next five years, and 30 percent for the final five years. It is valued at $9.6 million over the period of the agreement.
In addition, a Chapter 380 Economic Development Agreement, an incentive designed to promote economic development through grants or loans, is valued at between $2.3 million and $4.6 million over the last 10-year period of the agreement depending on the value of any additional investments in those years.
A similar tax abatement agreement valued at over $13 million with the County abates 100 percent of County taxes, except for property taxes collected for lateral roads. “As we build, we need those dollars, so we’ve been excluding them from our incentive agreements for some time,” said County Judge Kyle Kutscher.
“I was an exciting day,” Kutscher added. “It’s always a challenge when people look at abatements, but the alternative, with projects of this size, you either make that incentive and have a company here with new jobs and incentives … [or] there’s the potential [they] go somewhere else. [AW-Texas] has a lot of history and stability, and I think will be a positive attribute to our county for a long time.”
City Manager Robert Herrera told the council and commissioners that an economic impact study reported the development will bring a $36 million payroll to Cibolo and is expected to deliver an annual net benefit of $3.7 million to the city and $4.5 million to the county in sales and property taxes.
“This is a signal for San Antonio and South Texas in general in terms of our ability to actively recruit, promote, and sell our community to these types of manufacturers,” said Tom Long, chief development officer for the San Antonio Economic Development Foundation (SAEDF). “The automotive [and] the transportation industry has proven that they can be successful here in San Antonio, and I think this is just an indication of what the future might hold for us as well.”
SAEDF has worked with Guadalupe County entities on attracting AW Texas to the area. “It has been a team effort like I have never seen in a region before,” Long said. “It is the beginning of great things in this end of the county.”
The infrastructure – water, wastewater, electric, and natural gas – that will be created to support AW Texas is brand new, Long added, opening the door for more manufacturing development in the region. “We’ve got the land, now we’ve got the infrastructure,” he said.
GVEC Senior Executive Manager Tammy Thompson said GVDC purchased the tract of land in 2013 hoping it would spur economic development in the cooperative’s service area. GVDC is marketing an industrial park in Cuero and two lots in Seguin for the same purpose.
Based in the Aichi prefecture in Japan, the Aisin AW group of companies employs 38,000 people worldwide and operates auto parts manufacturing plants in Michigan and North Carolina, where it employs over 2,000.
“I am honored to stand before you today and would like to extend great appreciation for you both coming,” said Satoru Kasuya, managing officer and deputy chief officer of AW-Texas, during Tuesday’s meeting. “We have found many of the attributes that match our company culture in Cibolo and Guadalupe County. Thank you very much for giving us this opportunity today.”
In April, Aisin AW announced it was planning to invest $400 million to enhance the business ability of its automatic transmission business in the U.S. at its North Carolina plant, which was established in 1998 and employs over 2,000 workers.
Cibolo, a 32-square-mile town of about 31,000 that sits in the heart of the burgeoning Interstate 35 corridor between San Antonio and New Braunfels, has been growing by 14 percent since 2000. Major employers include AGE Industries, Builders FirstSource, and Liberty Oilfield Services.
This is the first time the City and County have joined in a public session to enter into and offer a tax abatement and incentive program for development in the county and city.
In March, the City Council approved economic incentives for Santikos Enterprises for constructing a theater, only the second time in city history it has extended such incentives or grants to promote economic development.
Less than 20 miles east of Cibolo lies Seguin, the county seat of Guadalupe County, and a city that sits at the intersection of Interstate 10 and State Highway 123.
Seguin is home to a number of major manufacturers, including auto parts manufacturer Continental, maker of everything from electronic sensors to brake systems and powertrains for vehicles, machines, and traffic and transportation systems for every U.S. automaker and Toyota Texas.