Satellite Industries, a portable restroom manufacturer formerly known as PolyPortables, is looking to expand its operations in Lumpkin County, and the local Development Authority has agreed to lend a helping hand. A local economic investment program, first announced during a June meeting of the Board of Commissioners, will allow the Development Authority to facilitate the purchase of up to a $25,000,000 bond to finance the acquisition and construction of a new, 172,000 square foot facility for the company.
The new plant will be built on an approximately 26-acre site on Fannie Russell Road in Dahlonega.
The Development Authority will purchase the property for a token sum of $10, and then lease it to Satellite Industries for a period of ten years. At the end of the ten-year period, the property will be re-sold to the company for the same amount.
Ultimately, the complex deal is expected to benefit both the employer and the County.
The terms of the agreement require that the company add 80 new jobs over the first three years of the program. In return, Satellite Industries will receive a 65 percent property tax abatement over the ten-year period that the Development Authority owns the property.
“The company is just working through some issues to obtain appropriate access from Burnt Stand Road,” said Development Authority Executive Director Robb Nichols.
Satellite Industries Director of Operations Nathan Gardner told The Nugget that groundbreaking on the new facility will take place in late August or early September, with operations set to begin in the fourth quarter of 2025.
“The 10-year tax abatement is part of a continuous partnership as we will continue to grow our presence in Lumpkin County by bringing more skilled jobs to the community,” Gardner said.
INITIAL ANNOUNCEMENT
During the June work session of the County board, Chairman Chris Dockery called Nichols to the staff podium to introduce the forthcoming economic development project.
At that point the plan had not yet been approved by the Development Authority, but Nichols told the board that Satellite Industries had proposed to “acquire, construct and equip” a “Class A concrete hard-wall light manufacturing and distribution facility.”
“The great thing about this is the project is expected to create 80 additional jobs in the County over a three year period. That’s 20 the first year and only five of those jobs will re-located, so that’s 15 new jobs, and 30 new jobs the second year and 30 new jobs the third year,” Nichols explained.
Nichols came to the board with two formal requests for approval at their regular meeting: “a tentative financing structure request for a Development Authority bond issuance, expected to be about $24.5 million,” and “a request for a tax abatement.”
Nichols emphasized that the deal will not be considered debt for the Development Authority or Lumpkin County.
“These bonds will be issued by us and purchased by the lender, Wells Fargo, and then the lease payments will be made by the company to the Development Authority,” he explained.
Nichols indicated that there is past precedent for the complicated arrangement.
“For some reference, the last three times the Development Authority has done some bond issuance, 2006 was $11 million for Timken, 2011 was $50 million for JTEKT/Koyo and 2019 was $2 million for Struxure,” he said.
Nichols said the deal lays the groundwork for tax abatement, which is a reduction in property taxes.
“Of course, normally we can’t do for-profit tax abatements to companies directly from the County, but they can be done through the Development Authority. They’re looking to do this by transferring the legal title of the property to the Development Authority,” he added.
COUNTY COMMENTS
After Nichols made his initial presentation, Dockery commented favorably on the “structured” nature of the program.
“The company that would receive this abatement on taxes would have to have performance standards that were reviewed on an annual basis. And if they don’t meet those performance standards, mainly with job creation … then they’re responsible for the back-taxes. So I think it’s a great program,” Dockery said.
He compared the current proposal to the past programs Nichols mentioned, and said they are all in keeping with the Development Authority’s mandate.
“It’s a lot easier to keep the businesses we have than to go out and try to find new businesses for our community. And so that’s why those relationships are so important. When you go back and you look at the whole Koyo [situation], when the plant manager comes to the Development Authority and says ‘I need your help. Corporate has said we’re either going to shut down here and move to Johnson City, or shut down Johnson City and they’re going to move here,’ that’s good when you have those relationships,” Dockery continued.
He went on to thank Nichols for taking the initiative on the project.
“It’s good that you’ve got people within the community on the Development Authority that are willing to step up [and] volunteer their time to look after the interests of Lumpkin County and make sure we’ve got good-paying jobs. Thank you for looking into that,” Dockery said.
MOVING FORWARD
The Development Authority approved the final text of the agreement on the morning of June 18, and later that evening Dockery entertained a motion for the board to ratify it as well.
Commissioner Dr. Bobby Mayfield made a motion to approve the contract, with Commissioner Rhett Stringer seconding the motion.
The item was approved unanimously by the board, with no additional discussion.
Subsequently, The Nugget reached out to Nichols for an update on the final version of the agreement, as well as his role in bringing it to fruition.
Nichols, who is also Executive Director of the Chamber of Commerce, took on his new leadership role within the Development Authority on June 1.
“I’ve been on the Development Authority Board for years, and I asked to do this because [Planning Director] Rebecca [Mincey] and I work hand-in-hand anyway, so it’s great for the Chamber to be able to do this and be a part of it,” Nichols explained.
He says he feels “pretty lucky” to be able to implement such an impactful project within the first couple weeks of becoming Executive Director.
Nichols pointed out that even with the temporary property tax abasement, the County and school system will still see increased tax revenues right away.
“When Satellite Industries closes on that property, they’re going to use up the $25 million to build the factory. But they’re also going to invest seven million in equipment, and it’s going to get taxed like personal property. So there will be no tax abasement on that,” he explained.
Nichols said these type of incentives programs are frequently employed in larger communities, but will likely become more commonplace in Lumpkin County as development continues.
“It’s going to bring 80 new jobs to our region. So hopefully that’s 80 new families that buy homes and shop at Wal-Mart and buy from local businesses in town. That’s the Development Authority’s mission.”