PCDC officials say they have learned from ‘nonstarters’

The 130 Commerce Center hosts several PCDC projects, including the first two hotels in the city.

The 130 Commerce Center hosts several PCDC projects, including the first two hotels in the city.

The Pflugerville Community Development Corp. has hired a new executive director and brought on new board members in the past year. Now, PCDC and city officials say they are committed to moving forward and working together with the aim of bringing successful businesses to Pflugerville.

Wayne Cooper, PCDC board president and Place 1 City Council member, said both entities have experienced a learning curve with regard to economic development, and now the two groups are working with a focus-driven direction.

“We’ve had several nonstarter [projects],” Cooper said. “We actually used to give money to people up front, and we had some groups that would never show up. It’s tough to get money back when there’s no money there, so we’ve changed that [approach] and tried to eliminate that whole nonstarter thing by saying, ‘Here’s a great incentive package, but you need to come to the dance, first.’” [polldaddy poll=9407442]

Past projects

PCDC Executive Director Amy Madison cited the tortilla company El Lago as an example of a “nonstarter” project that, while incentivized, did not receive those incentives because it failed to meet its obligations.

“They signed a lease, but the performance agreement stated they had to occupy the building at the 130 Commerce location,” Madison said. “After the lease was signed—prior to relocation—the business owner decided their efforts to move a 60-year-old company was too difficult a process to go through, even though we had everything in play for them.”

The company has since gone out of business.

TrackingPoint received attention last year when the company posted on its website it would cease taking orders for its computer-assisted rifles. Media outlets reported the company had closed, but instead it sought help from the PCDC during a downsizing and reorganization process.

Madison said PCDC and City Council approved a settlement agreement with TrackingPoint in October, accepting cash, furniture and machinery as partial repayment of incentive and leasehold payments owed to the PCDC for not meeting the job metrics in the performance agreement. Madison said the remaining incentive reimbursement owed to the PCDC is being paid back over a three-year term.

Madison said the settlement helped provide the incentives to bring EOS of North America, an industrial 3-D print technology provider, to Pflugerville. 

“We were in Round Rock and had about 16,000 square feet there, but we were just outgrowing the space. We ended up here when TrackingPoint decided to downsize, took the 45,000 square feet and they’re building it out to suit what we need,” said Mike Conner, EOS vice president of service.

Conner said EOS came to the U.S. in 2001, and the company is currently operating with approximately 35 employees from its Pflugerville location. Conner said the incentives, the location’s proximity to the airport and SH 130, and Madison’s work with EOS brought the company to Pflugerville.

Incentives at work

When it comes to providing incentives, PCDC may provide an incentive package; the city may provide an incentive package, typically known as a 380 agreement; or the two entities might work together, as was the case with the Courtyard by Marriott hotel.

The PCDC is a 4B Corporation funded through a half cent sales tax off taxable goods purchased in the city of Pflugerville. Madison said although PCDC does receive income from land sales, sales tax revenue is the primary source used to fund projects. 

She said the PCDC does not just hand out money. Businesses are required to meet certain criteria and performance standards according to a written agreement to receive an incentive package.

Madison said businesses not meeting the metrics outlined in a performance agreement does not constitute a “failure.” Instead, it means the incentive is revoked, which saves money, or a clawback process begins.

“We’ve learned, and it’s gotten a lot better,” Cooper said.

PCDC projects
Where Are They Now?

The city of Pflugerville and the Pflugerville Community Development Corp. have incentivized businesses to relocate to or expand in the city. Each of these deals comes with criteria the company must meet in order to receive those incentives. This graphic looks at the companies that have received incentives and the most recent updates for them.

PCDC projects

A. Best Western Plus

Hotel that is part of a nationwide brand
Location 16225 Impact Way, inside 130 Commerce Center
Size 17,470-square-foot facility
Incentive(s) PCDC sold the land at a reduced market value of $2.50 per square foot. The hotel received up to $100,000 for city development fees and $25,000 annually for marketing and advertising for five years for a total of $125,000
Update A soft opening is set for spring.

B. Community Impact Newspaper and Community Impact Printing

Free monthly newspaper and an in-house print production facility, which is opening
Location 16225 Impact Way, Ste. 1, inside 130 Commerce Center
Size 16,000-square-foot corporate headquarters; 36,000-square-foot print production facility under construction
Incentive(s) The PCDC agreed to sell a 5-acre tract of land for $50 to MRS Holding, which is owned by John and Jennifer Garrett, who own Community Impact Newspaper. The PCDC provided MRS Holding with $100,000 for capital expenditures such as architecture and design services. The city of Pflugerville further incentivized with an agreement to rebate 50 percent of the company’s property taxes for 10 years and waive all development fees.
Update Community Impact Newspaper remains in compliance with the performance agreement. Construction of the new print production facility adjacent to headquarters is underway and scheduled to open in August.

C. Courtyard by Marriott

Hotel and conference center
Location Southwest corner of SH 130 and Pecan Street, inside 130 Commerce Center
Size 57,013-square-feet
Incentive(s) The city and PCDC have separate contracts with Courtyard by Marriott developers. PCDC sold the land at a reduced market value and the city of Pflugerville’s 380 agreement waives a variety of fees and refunds several taxes including 100 percent of all Hotel Occupancy Tax revenue generated by the hotel for 30 years. The hotel also receives 75 percent of all HOT tax revenue generated by the next four hotels to be built in Pflugerville and will continue for 10 years after the first HOT tx revenue is generated.
Update The hotel is under construction.

Danny’s BBQ

Barbecue sauce manufacturer
Location Private home
Size Not available
Incentive(s) The business received $7,500 to underwrite a food-processing contract to commercialize Daniel Caldwell’s barbecue sauce product.
Update The company continues to sell the sauce through local and regional outlets and is working with the food-processing company to market the product through retail locations.

D. EOS of North America

German-based company that offers systems, software and services relating to 3-D print technology
Location 3813 Helios Way, Ste. B298, inside 130 Commerce Center
Size 44,680-square-foot facility
Incentive(s) Office furniture and fixtures valued at $151,000; equipment from TrackingPoint; PCDC exercised a five-year market-rate lease for the space.
Update EOS has hired 12 people since occupying the building in December. A grand opening is set for May 4.

E. Medway Plastics Corp.

Plastic injection molding company that produces parts for agriculture, aerospace and a variety of other industries
Location 1600 Royston Lane (former FedEx facility)
Size 51,000-square-foot facility, approximately 11 acres
Incentive(s) A $50,000 relocation grant and $100,000 in job-creation incentives.
Update Medway moved into the building in November and began assembly of the manufacturing equipment. PCDC held a job fair in conjunction with Workforce Solutions in January to help staff the facility, and the company continues to increase production.

F. Precision Ammunition

Manufactures ammunition for sporting and law-enforcement purposes
Location 902 Old Austin Hutto Road
Size 1,800-square-foot facility
Incentive(s) $175,000 in moving expenses, $155,000 for new equipment, $3,000 for each employee up to 50 employees for a total of $150,000 and PCDC is the guarantor for a credit line of up to $950,000 for components.
Update The company received its certificate of occupancy permit in December, and it is in the process of starting production in the new Pflugerville headquarters.

G. Thin-Nology

A technology company
Location 15901 Central Commerce Drive
Size 8,600-square-foot facility
Incentive(s) PCDC sold the land below market rate at $2.40 per square foot, reduced from $3. The PCDC has distributed payouts of $42,000. This includes $20,000 for city fees, $10,000 in moving expenses and $12,000 for three jobs meeting the metric of a $60,000 average wage at $4,000 per job, with the total incentive not to exceed $70,000. Remaining funds available for meeting the job metric are $28,000. Offer expires next year.
Update The company is still in operation and remains in compliance with the performance agreement terms.

H. EIEIO (now WhiteWave Foods)

Packaged food and beverage company serving the convenience store and food-service industries
Location 3813 Helios Way, Ste. 200, inside 130 Commerce Center
Size 42,000-square-foot facility
Incentive(s) $3,000 for 35 jobs with an average wage $45,000 with a maximum incentive of $105,000.
Update EIEIO relocated to Pflugerville and hired 17 people, but it was bought out during first year of operation by WhiteWave Foods. The company continues to sell EIEIO brands among other products specific to WhiteWave. However, no incentives were paid out due to the change in ownership. Company is growing and anticipates hiring additional employees.

I. Hawaiian Falls Water & Adventure Parks, Pflugerville

Waterpark owned by Source Capital LLC and Horizon Family Holdings
Location 18500 SH 130
Size 23 acres
Incentive(s) PCDC purchased the land and underwrote the development of this project with a $25 million loan. Hawaiian Falls is engaged as operator for the park and is in a lease-purchase arrangement with the PCDC. Additionally, the PCDC provides $125,000 for marketing or $25,000 annually for five years.
Update Hawaiian Falls is current on all obligations and is under new management after a reorganization initiative. Plans are underway for its third season in May, when the company will be rolling out new, upgraded options for its customers. The water park hosted more than 200,000 guests in 2015.

J. TrackingPoint

Applied technology company specializing in the design, development and manufacture of precision-guided firearms for purpose-built weapon systems
Location 3813 Helios Way, Ste. B290, inside 130 Commerce Center.
Size 15,320-square-foot facility
Incentive(s) $403,200 paid out in performance agreement
Update The company requested assistance while going through a reorganization and downsizing of its operations. PCDC and Pflugerville City Council approved a settlement agreement in October accepting cash, furniture and machinery as partial repayment of incentive and leasehold payments owed for not meeting the job metrics outlined in the performance agreement. The remaining incentive reimbursement owed to PCDC is being paid back over a three-year term, and the company was able to retain 17 jobs.

K. Arista Data Centers LLC (now Dimension-RPC Stone Hill LP)

Dimension Capital Partners is a real estate and investment firm
Location Near Stone Hill Town Center at Pfluger Farm Lane and Town Center Drive
Size N/A
Incentive(s) The city and PCDC had separate agreements with the developer, each with a contingency requiring the completion of infrastructure construction by summer 2016. The city agreed to construct Pfluger Farm Lane, which opened in March.
Update On Oct. 4, 2012, the company became Dimension-RPC Stone Hill LP. The company fulfilled its obligation of purchasing the land by Dec. 31, 2012. There has been no progress on construction of a facility despite the summer deadlines. Should the project not meet deadlines outlined in the 380 agreement, the city of Pflugerville would be reimbursed for the cost of building Pfluger Farm Lane. The PCDC states no incentive funds have been disbursed.

L. RRE Austin Solar

Proposed solar power plant to promote renewable energy production, that was purchased in 2010
Location Intersection of Manda Carlson Road and Felder Lane
Size 740 acres
Incentive(s) The project was incentivized by the city, and PCDC provided recruiting support for the project. The city’s agreement states RRE will pay the city $0.05 per $100 of property valuation beginning in 2020, with the contract ending in 2040. The city also agreed not to annex the property, and the project would be branded as a city of Pflugerville facility. RRE also agreed to a contribution of $750,000 worth of solar panels to school and city facilities.
Update The city’s incentive contract still exists, has future deadlines and is not closed. RRE Solar did not meet the Aug. 1, 2014, deadline to build out the project in Pflugerville’s extraterritorial jurisdiction, according to Terri Toledo, Pflugerville’s Public Information Officer.

El Lago

Tortilla and chip manufacturer
Location N/A
Size N/A
Incentive(s) Incentives were approved by the PCDC and City Council in April 2014 but never paid.
Update El Lago signed a lease agreement for space in the 130 Commerce Center, and after getting approved for incentives, the company ran into difficulties in moving to Pflugerville. The business has since closed.

M. Sunshine village

Proposed mixed-use development
Location Pflugerville Parkway and SH 130
Size 120 acres
Incentive(s) Incentives were approved by the city but never paid due to the developer not meeting the criteria of building necessary infrastructure or purchasing the land.
Update The city and the landowner both say they are no longer working with the developer.