Analysis Project The Local Economic Impact of Greenfields, Louisiana – L’Observateur

Wallace — Greater New Orleans, Inc. analysis predicts that Wallace will create 371 jobs and generate $8.4 million in annual tax revenue after the Greenfield Louisiana grain terminal opens.

This forecast does not take into account tax relief from the Cooperative Effort Agreement between Greenfield, the Port of South Louisiana, and the St. John Parish Sheriff’s Office. A “pay in place of tax” (pilot) deal established between the parties will bring approximately $209 million in tax relief to grain terminals over 30 years.

Greenfield will pay the parish $4 million this year, followed by $2 million annually through 2025.

While the pilot will affect how ad valorem taxes are distributed to parish governments, schools and law enforcement agencies, representatives of GNO, Inc. said tax revenue will be net positive each year for the life of the contract. rice field. parish.

GNO, Inc. President and CEO Michael Hecht said the greenfield project could spur development in the St. John West Bank. Job creation was highlighted as one of the key impacts.

Of the 371 jobs expected to be created after the greenfield project opens, 100 will be direct jobs at the greenfield site with an average salary and benefits of $75,000. Another 161 are indirect jobs and 110 are induced jobs. Construction of the facility is expected to create 500 direct jobs, 148 indirect jobs and 325 induced jobs.

Hecht said indirect jobs will be created as part of the supply chain related to greenfield operations. Examples include new hires for transportation companies, catering companies, security companies, or cleaning companies that service the facility.

Meanwhile, induced work is linked to other businesses not directly involved in the manufacturing process that grow as a result of greenfield projects.

“The simplest example is a local restaurant that needs to add more employees because more people are eating breakfast and lunch and working at the facility,” says Hecht. “They are new jobs created because greenfield exists, but their business is not part of the supply chain.”

Job creation and tax revenue projections are calculated using a model called IMPLAN, a leading provider of economic impact analysis.

According to Harrison Crabtree of GNO, Inc., IMPLAN is a model based on the following concepts: A given economic activity therefore supports the spillover of additional economic activity across the economy. “

Crabtree said that at the most basic level, running the model requires incorporating information about the corresponding industry, geography, direct employment, and direct labor income.

IMPLAN projected $5,826,604 in annual local and state tax revenue from direct, indirect, and induced sources during construction of greenfield facilities. After opening, the facility is expected to bring in $8,435,974 annually in local and state taxes, of which $6,455,322 will be tied directly to the facility.

But Crabtree said IMPLAN’s forecast did not take into account pilot contracts. Over his 30 years outlined in the pilot, the facility is expected to bring him just over $253 million in local and state revenues, according to IMPLAN projections. Subtract his $209 million for the pilot, and tax revenue comes to his $44 million, or just over $1.46 million a year.

Crabtree said this was likely a conservative estimate of tax revenue.

“IMPLAN’s tax benefits do not take into account specific tax rates or incentives and are not industry-specific. Rather, the figures are calculated based on total Louisiana tax revenues and split across industries.” Crabtree said, “In most cases, manufacturing facilities, for example, contribute more to property taxes than banks, but in this scenario they would be the same based on a linear relationship. With this in mind, Our tax estimates are conservative.”

The agreement has drawn criticism from groups such as Together Louisiana, an organization that promotes tax equity and workforce development.

In an August 3 letter to Rector Jaclyn Hottard and the St. John Parish Council, together with Louisiana analyst Erin Hansen, the financial impact of the CEA will be significant, He said the parish was depriving schools, government, law enforcement, and funding for law enforcement. more.

According to Hansen, under the terms of the CEA, the school board would receive $500,000 annually, as opposed to the $2.1 million annual ad valorem tax revenue that Greenfield would receive if it were subject to normal ad valorem proceedings. It will be. According to Hansen, the gap between these numbers is beyond the budget of every teacher at West St. John High School.

The St. John Parish Council receives $820,000 a year instead of $3.5 million, and law enforcement receives approximately $620,000 instead of $2.6 million.

Joy Banner of the nonprofit The Descendants Project feels that Greenfield and Port are hiding behind “thin data and promises of jobs and economic development.”

“Our parishes, taxation agencies and other officials have failed their duty of care and are actually depriving our schools, neighborhoods and children of hundreds of millions of dollars in tax dollars. “The GNO, Inc. study clearly states that it does not consider tax benefits, but the problem is the $200 million tax benefit. Even though they couldn’t stand their reports, the project is clearly in jeopardy.”

Responding to the pilot’s criticism, Hecht said it would not be a fair assessment to assume that the agreement would cost the parish more than $200 million in tax revenue.

“If it weren’t for that tax incentive, that company or that project wouldn’t have happened, the tax impact would be zero. It’s a net plus,” said Hecht. “The real question you want to ask when you meet a pilot is, ‘Was that tax break necessary to secure the project? If the net profit is positive, it’s a good deal. “

The agreement was approved by the Port of Southern Louisiana Commission by an 8-1 vote at its April 6 meeting. You can view the minutes here.

Local tax authorities were not formally presented with an opportunity to negotiate the terms of the CEA, but Greenfield representative David Rollo said the company would meet with the St. John Board of Education to support local education. I told the Port of Southern Louisiana Commission that I had made a commitment. especially on the west coast. He clarified that the donation would be made through a direct-to-West St. John Foundation rather than the School Board Foundation.

A spokesperson said Greenfield has built an internal training program and is working with River Parish Community College to develop a curriculum to prepare locals for green jobs. Cal Williams, his COO at Greenfield, said he hopes the company will be a catalyst for the West Bank’s recovery.

“Every time I meet with my West Bank neighbors, I hear stories that the area needs to be put back together. It is also related to nearby restaurants and local mechanics getting more business and hiring more workers.

Greenfield has Minor Source Air Permits, LDNR and Water Permits from the EPA. The company is in the process of obtaining a permit from the US Army Corps of Engineers.

The construction period is expected to be approximately 27 months. If the company obtains an Army permit later this year, the facility will likely open in 2025.

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