When Portuguese company EFACEC drops anchor in Effingham County soon, it could mean an overseas journey for dozens of prospective employees.
Effingham Industrial Development Authority Chief Executive Officer John Henry said the electrical component and transformer maker intends to take 100 people to Portugal for a year-long training session in the company’s processes before it opens its new plant at the Effingham Industrial Park.
“They’ll be recruiting here over the next several months,” Henry told the Guyton City Council in an update on IDA activities.
The investment from the company, which made its formal announcement of coming to Effingham earlier this month, in its facility is anticipated to be around $106 million. Plans call for the final phase to be finished by 2015, with more than 600 workers employed at wages averaging $50,000 a year. Phase I is expected to be done by 2012, entailing 300 jobs.
Henry said the IDA ran an analysis on the impact of EFACEC on the local governments, and the results showed a 215 percent return on the public investment. Those figures don’t include any effect on the local commercial sector, he said.
“We thoroughly analyzed it,” he said. “This one just so happened it was the perfect opportunity and we had the perfect site for them and we can meet the timeline.”
The LOCI software, developed by Georgia Tech’s economic development arm, looks at expenditures on a per capita basis and takes into account the cost of education, fixing potholes and police and fire protection, Henry said. There are prospective industries whose results on the LOCI were not strong enough to continue to recruit.
“We have had to say no to several,” Henry said. “A 10 percent rate of return is average. A 215 percent is unheard of.
Those 600 jobs are expected to create in turn 1,100 more jobs locally, according to Henry, and there also should be a significant impact on the local real estate market. EFACEC is slated to employ more than 100 electrical engineers, making a range of between $85,000-$100,000 a year.
By comparison, JCB in Pooler was a $62 million investment with 500 jobs when it opened in 1998. It also took over 1,000 acres, while EFACEC will be on 55 acres.
“And that was the biggest new manufacturer since 1984,” Henry said, noting the addition of the then-Fort Howard paper mill at that time.
But Guyton aldermen wondered what the effect on the tax base will be with EFACEC coming to Effingham.
“You and I both know the property tax doesn’t pay for their schools,” Alderman Phillip King said “We’ve always heard, when we do this, property taxes are going down.”
Effingham was in competition with Bulloch County and Charleston, S.C., the latter of which put together an incentive package of $20 million. The land the IDA offered is $5,000 an acre and there will be $1.5 million spent in direct site improvements.
There is a 20-year tax abatement on the property for EFACEC as part of the deal. Henry said the land involved is not on the tax digest now, since it is owned by the IDA, and property tax on a facility is generally about 15 percent of the total taxes involved from a company. There is also a 10-year abatement on equipment. The value of EFACEC’s equipment is figured to be between $70 million and $100 million.
“There will be many years in the future where taxes are paid on that equipment,” Henry said. “I still think we got a sweetheart of a deal.”
Another drawing card for the Portuguese outfit was the new Savannah Technical College campus almost directly across Highway 21 from the EFACEC site.
“That was a big factor,” Henry said. “They will be expecting Effingham County students to get the skills necessary. A lot of these jobs are not skills we can meet overnight. But it is something we can offer to students in the future.”
EFACEC will not have more than five Portuguese managers at its Effingham facility once it opens.
But that’s not the only thing on the IDA’s plate, Henry, along with Guyton IDA representative Herschel Paulk, told the Guyton council.
“We are very pleased with the progress we have made over the summer on a number of projects we have had,” Henry said. “Mr. Paulk has been in it through thick and thin. They deserve a pat on the back for finally seeing the light of day.”
Henry discussed the deal with DP Partners to develop the 1,800 acres the IDA has straddling I-16. When it’s finished, the project — known as the LogistiCenter Savannah — will accommodate more than 6 million square feet of industrial property. The estimated value of the LogistiCenter upon completion is $200 million.
Depending on the firms that locate there, the massive undertaking could employ from 2,000 to 5,000 people once it’s done.
“All of those things are in the planning stages,” Henry said. “We’re hoping construction can start as early as March. We’ve got to hustle and get some engineers down there.”
Moreland Altobelli engineers have been contracted to redesign the interchange at I-16 and Old River Road, a project that is key to the deal and is expected to take several years.
“The Department of Transportation has been very gracious in working with us,” Henry said.
The IDA and DP Partners are working on getting water and sewer for the two tracts. The southernmost tract, the smaller of the two, will be developed first. The northern side will have a wastewater treatment plant built on site that have a tertiary level of treatment.
The IDA also is beginning to go over more detailed plans for its 2,600-acre Research Forest Tract near Rincon.
“We’re still in the preliminary planning,” Henry said. “I think everybody is going to be pleased with it.”
While the LogistiCenter is anticipated to be up and running in a few years, the Research Forest Tract is much more long-term affair.
“We intend to do that project right,” Henry said. “If it takes us 20 years, it takes us 20 years. I want to do something everyone in Effingham County can be proud of.”