GP receives approval for local tax break incentive for its proposed distribution center near Shippensburg, Pennsylvania, resulting in 55%-65% reduction in taxes on the building and property over six years; GP aims to open the facility by July 2015
June 27, 2014
– Shippensburg school board has offered a tax break to entice a company to open a distribution center in the area, the construction and operation of which would boost the local economy.
The school board on Wednesday approved a Local Economic Revitalization Tax Abatement incentive proposal for Georgia Pacific, a pulp and paper company that is looking to possibly build a distribution facility at Proligis Park 81, on Walnut Bottom Road in Cumberland County.
Georgia Pacific would pay lower taxes on the building and property for six years. The company would pay 65 percent less taxes in the first two years, 60 percent in years three and four, and 55 percent less in the last two years ending in 2021, according to a LERTA summary.
Projections indicate that SASD will make $1,653,798 from taxes the company is set to pay over the six years.
The LERTA agreement with SASD "is another step in the process," toward a final decision on the future distribution facility, said Georgia Pacific spokesperson Kelly Ferguson. He could not offer a time frame on when the decision will be made, but said the process will move forward in mind of the goal to open the facility by July 2015.
"We believe this site is likely the best for us," Ferguson said. It has ideal access to interstates 81 and 78 and ease of moving products and reaching customers, he added.
If all goes through, Georgia Pacific's development at Proligis Park will mark the end of a seven-year vacancy at the site further strained by the down economy, according to Jonathan Bowser, CEO of Cumberland Area Economic Development Corporation.
The facility would open about 50 to 60 new jobs for loading trucks, managing inventory, fulfilling orders and other roles typical for a distribution center, according to Ferguson. While that is well below the 1,000 positions at Proctor & Gamble, another company coming to Shippensburg, Bowser said that is not a bad thing.
"Fifty is a good number of jobs. It's not going to have a negative impact on workforce and it won't have a negative impact on traffic on Walnut Bottom (Road)," he said.
According to Bowser, the distribution center would likely boost business in the local hospitality sector and increase demand for new residential development.
Just a short time before the school board chose to offer Georgia Pacific the tax abatement incentive, it also approved property tax increases. Board member Dr. Thomas Enderlein questioned "how much money we're giving away," particularly since the board raised taxes on residents.
Communities need to offer incentives in order to be competitive and gain the growth that new companies will provide over the years, Bowser said.
"If there is no incentive, there is no development," he said. "You're starting with nothing. That's something we continue to struggle with; you're not giving away when you don't have (anything)."
Amber South can be reached at 262-4771.
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