The town of Little Elm has executed many development agreements in the past, but the one approved by the Town Council on Tuesday was different.
For one, it’s larger than most from the financial side. But the long-term benefit to residents across the country makes it even larger.
The council approved a development agreement with Retractable Technologies Inc. for a project that will expand the company’s existing facility that’s located in the southern end of town.
The facility will be used to increase the amount of syringes RTI produces. Larry Salerno, director of operations at RTI, said the company entered into a technical investment agreement with the U.S. Department of Defense and said RTI is a part of Operation Warp Speed to get syringes ready for COVID-19 vaccinations.
Salerno said the total initiative is expected to cost $108 million, split between the government and RTI.
Salerno said RTI signed a contract to provide $83 million worth of syringes to the U.S. Government in anticipation for a vaccine being available, possibly by the end of the year.
He said approximately 70 percent of that is coming from China.
“While that’s still a great thing for the country to have these syringes the best thing would be to have them made in America,” Salerno said.
As part of the agreement with the town RTI will construct a 55,000-square-foot warehouse, plus a 4-foot split rail fence with masonry columns that match the neighboring fences. It will also create jobs for 135 employees.
The town will reduce development fees and impact fees by 60 percent for the expansion project only.
Fred Gibbs, director of development services, said in the future RTI plans to seek a tax abatement that would equal 50 percent of the real property taxes over a 10-year period.
Jeanette Espinoza, director of the Economic Development Corporation (EDC) said the amount of the abatement over the life of the agreement would be between $2.3 million and $2.5 million.
Mayor David Hillock said while he supported the expansion and its potential to bring overseas jobs to the United States, he had hesitation with the abatement, adding that it would be the longest abatement for a non-sales tax generating company in the town.
“We would be reducing our property tax on the property by 50 percent, and of that 100 percent would go into the TIRZ (tax increment reinvestment zone),” said Hillock, who ultimately voted for the agreement. “But that would be a sharp reduction to the TIRZ revenue.”
Other council members were concerned about the abatement as well.
“It is a hard pill to swallow,” said Councilman Curtis Cornelious. “But when you look at the need and the desire I guess it makes it a little easier to swallow.”
Salerno reminded the council that the expansion would generate approximately $2.5 million into the town’s TIRZ district over 10 years.
Espinosa recommended approval of the agreement, saying that the potential return on investment is substantial. She added that in addition to the 135 jobs created by RTI, another 18 to 25 other jobs are expected to be created through ancillary businesses.