City Council approved economic development incentive packages Thursday for two companies planning to build and expand in San Antonio with the promise of bringing 1,200 total manufacturing jobs to the city.

The incentives for baked-goods supplier FGF Brands and trucking manufacturer Navistar include about $11.5 million worth of tax abatements, infrastructure improvements, and fee waivers.

FGF Brands Texas, formerly known as Hill Country Bakery, announced in September it planned to expand its operations here by investing $129 million in a manufacturing facility on San Antonio’s West Side. The company has said it plans to hire an additional 600 people, adding to its current local workforce of 328.

Illinois-based Navistar – a global manufacturer of commercial vehicles, chassis, and diesel engines – is planning a $250 million plant near Mitchell Lake and the Toyota Motor Manufacturing Texas plant. Navistar is planning to hire 600 workers, and construction on the plant will start this year with production at the plant starting two years later.

City Council approved incentives for FGF Brands that include a 10-year, 100 percent Upskill Project Tax Abatement valued at $4.5 million, a $500,000 Workforce Development Training Grant, $150,000 in City fee waivers, and $300,000 in San Antonio Water System fee waivers.

The City estimated the incentives would result in a positive fiscal impact of approximately $3.8 million over a 16-year period.

“This agreement with FGF Brands is further evidence of District 6’s potential for economic growth,” said Councilwoman Melissa Cabello Havrda (D6). “I’m proud of the work we did in collaboration with the Economic Development Foundation to infuse millions in capital and create hundreds of good jobs on San Antonio’s West Side.”

The incentive agreement with FGF Brands is the City’s first Upskill incentivized project which provides tax abatement and grant monies to companies that commit to promoting economic mobility through their hiring practices and workforce training programs.

The incentive agreement calls for FGF Brands to hire 35 percent of its workforce from targeted populations, including residents of zip codes in which more than 30 percent of the population is living below the federal poverty line, who are receiving federal assistance, or who were formerly incarcerated, as well as residents served by City-funded workforce development nonprofits. The company also will host job fairs in the inner city during an initial hiring period.

Jobs at FGF Brands, which produces baked goods sold under the Stonefire brand at grocery retailers across the U.S., as well as other baked goods for large U.S. based clients like Starbucks, pay an average annual salary of $38,511.

“The relocation and expansion of FGF Brands Texas and its operations in San Antonio … is an opportunity that is over twenty years in the making. We’re proud to bring this investment to San Antonio’s Westside community,” stated Ojus Ajmera, co-founder of FGF.  

The announcement that Navistar would build a plant in San Antonio came Sept. 19 on the heels of Toyota saying it plans to invest $391 million in an expansion of its San Antonio plant and news that automotive parts supplier Aisin AW would build a $400 million plant in Cibolo and bring 900 jobs.

Navistar will build medium- and heavy-duty trucks at the plant, which officials said would complement the manufacturer’s existing assembly plants in Springfield, Ohio, and Escobedo, Mexico.

The incentives approved for Navistar include a 10-year, 100 percent tax abatement agreement on real and personal property valued at approximately $7 million. The agreement is contingent on the company investing $126.2 million in personal property and $108.8 million in real property over four years, creating 598 full-time jobs, and exclusively using CPS Energy and SAWS for the term of the agreement. It also requires Navistar to invest at least $348,000 over five years on paid internships and over $1 million to promote sustainability initiatives and employee wellness initiatives.

The council also passed an ordinance designating 426 acres of land as a Navistar Reinvestment Zone. The property is located at 15770 South U.S. Highway 281 on the South Side. 

Councilwoman Rebecca Viagran (D3), who represents the district where Navistar will be located, said the company has already committed to contributing $348,000 to workforce initiatives in San Antonio. Navistar jobs are expected to pay annual wages of about $50,000, with leadership positions paying roughly $90,000.

“International companies are taking notice of San Antonio as the ideal location to expand into the U.S. market,” stated Sarah Sanchez, executive vice president of global development at the San Antonio Economic Development Foundation. “We look forward to the work ahead supporting the company as they hire San Antonio residents to build their careers in manufacturing.”

At an Oct. 1 meeting, Bexar County commissioners approved a 10-year, 50 percent real and personal property tax abatement valued at $1.7 million for FGF Brands. County officials estimated, over that time, it would realize new taxes of nearly $2 million, plus new annual tax revenues of $31,000 for flood control and $372,861 for the University Health System.

Commissioners also approved an incentive package for Navistar that included a 10-year, 100 percent tax abatement on real and personal property, a $250,000 skills grant for creating 250 new jobs paying at least $50,000 a year, a public infrastructure grant of up to $5 million for all site improvements, and a county economic development agreement up to $680,000.

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Shari Biediger

Shari Biediger is the development beat reporter for the San Antonio Report.