Seguin and Guadalupe County are making way for an instant jolt to their economies.
City and county leaders on Tuesday heard and approved proposals to bring a $56 million development project to the area of 8th and Guadalupe streets in Seguin off Interstate 10 in an area called the Rio Nogales Industrial area. Coffee Tech Industries, Inc. entered into incentive agreements for tax abatements with the city and the county.
The company plans to build a 112,000 square-foot manufacturing facility and national headquarters on 33.67 acres of land the Seguin Economic Development Corporation owns, SEDC Director Josh Schneuker said.
Coffee Tech CEO Chad McNair said once the headquarters is complete, it will be the most “advanced instant coffee facility on the globe.”
“We need people that can operate electronics and a lot of sophisticated equipment,” he said. “Our intention is to eventually run this plant [24 hours a day] seven days a week and produce very high-grade instant coffee.”
As a co-manufacturing facility, the coffee produced won’t boast a “made in Seguin brand,” or be found on supermarket store shelves, McNair said.
“We will have customers that bring their possibly roasted coffee to us or we will also be able to have it roasted,” he said. “We’ll grab it, extract it and turn it into a high-end powder and it will go off into their brand. So there will not be a Coffee Tech brand in the marketplace.”
Coffee Tech plans to bring in 91 new jobs to its facility with an average annual salary of $55,000, Schneuker said.
“In the midst of everything that’s going on with the impact COVID has on our economy, we have the opportunity to create new jobs here,” Schneuker said. “And not only new jobs but jobs that pay fairly well…[that exceed] the Guadalupe County average annual wage from 2019, which is currently $46,093. We’re really trying to bring in not just a good amount of jobs and a high number of jobs, but also a high salary attached to them as well.”
In addition to the 91 jobs, Schneuker said there are secondary jobs that come along with projects such as this.
“Manufacturing has a lot of spinoff effects created by these projects that result in not only direct jobs but indirect jobs as well,” Schneuker said. “For every one job you see created, you anticipate to see about .6 spinoff jobs created.”
Guadalupe County commissioners pledged to abate property taxes for five years at the site at an average of about 50% per year.
Seguin City Council approved a 10-year abatement deal that starts out at 85% of property taxes forgiven the first two years, goes down to 10% annually for years three through eight and goes to 30% in year nine to 25% in year 10.
As part of the agreement, Coffee Tech has to meet and maintain some benchmarks, including at least 10 years of business and maintaining minimum payroll amounts throughout the course of the abatement, Schneuker said.
The addition of the facility to the community will also create more tax opportunities for the city and school district, Schneuker said.
“We’ll see additional revenues to the school and for the county lateral road tax,” Schneuker said. “Over a 10-year period, the school district stands to collect about $5.8 million in new taxes and the lateral road for the county looks to be about $211,000 [as well as] gaining that revenue as an electric, water and wastewater customer for the city of Seguin.”
Construction is set to begin by Dec. 31, and the facility is expected to be operating by March 1, 2022.
During the project’s first phase, Coffee Tech is expected to make capital investments of at least $36 million — $21 million in the building and $15 million in machinery and equipment.
The company plans an additional $20 million in new equipment and machinery in the second phase of the facility, Schneuker said.
Commissioners Court approved the abatement agreement 4-0-1 during its regular meeting Tuesday morning, with Precinct 2 Commissioner Drew Engelke abstaining due to his role on the SEDC board of directors. Seguin City Council unanimously approved the agreement during its regular meeting Tuesday night.