Analysis projects on the impact of Greenfield Louisiana on the local economy – L’Observateur

WALLACE — An analysis by Greater New Orleans, Inc. has projected that the opening of Greenfield Louisiana’s grain terminal in Wallace will create 371 jobs and generate $8.4 million in annual tax revenue.

The projections exclude tax cuts from a collaborative agreement between Greenfield, the Port of South Louisiana and the St. John Parish Sheriff’s Office. A “payment in lieu of tax” agreement (Pilot) signed between the parties will result in approximately $209 million in tax relief for the grain terminal over 30 years.

Greenfield will make a $4 million payment to the community this year, followed by $2 million in annual payments beginning in 2025.

While the pilot will impact how ad valorem taxes are distributed to local government, schools and law enforcement, GNO, Inc. officials said tax revenues will be net positive each year for the duration of the arrangement, a benefit for that represents community.

Michael Hecht, President and CEO of GNO, Inc., said the greenfield project has the potential to spur development in St. John’s West Bank, where historically residents have had fewer economic opportunities compared to the East Bank. Job creation was highlighted as one of the most important impacts.

Of the 371 jobs expected to be created by the Greenfield project upon opening, 100 will be direct jobs at the Greenfield site with an average salary of $75,000 plus benefits. Another 161 are indirect jobs and 110 are induced jobs. Construction of the facility is expected to create 500 direct jobs, 148 indirect jobs and 325 induced jobs.

Hecht said indirect jobs would be created as part of the supply chain related to greenfield operations. Examples include new hires from trucking, catering, security or cleaning companies serving the facility.

Meanwhile, induced jobs are linked to other companies not directly involved in the manufacturing process that would grow due to the greenfield project.

“The simplest example is a local restaurant that now needs to hire staff because there are more people working at the facility who eat breakfast and lunch,” Hecht said. “They are new jobs created because Greenfield exists, but their companies are not part of the supply chain.”

Projections of job creation and tax revenue are calculated using a model called IMPLAN, the leading provider of economic impact analysis.

According to Harrison Crabtree of GNO, Inc., IMPLAN models are based on the concept that “all branches, households, and governments in the economy are connected through buy-sell relationships; Therefore, a given economic activity supports a wave of additional economic activity throughout the economy.”

Crabtree said that running models at the most basic level involves plugging in information about relevant industry, geography, direct jobs, and direct earned income.

IMPLAN anticipated annual local and state tax revenues of $5,826,604 from direct, indirect and induced sources during construction of the greenfield facility. Upon opening, the facility is expected to collect $8,435,974 in annual local and state taxes, of which $6,455,322 would be tied directly to the facility.

However, Crabtree said the IMPLAN projections do not account for the pilot agreement. Over the 30-year timeline outlined in the pilot, the facility is expected to generate just over $253 million in local and state revenue, as projected by IMPLAN. The $209 million deduction for the pilot would result in a net gain of $44 million in tax revenue, or just over $1.46 million per year.

Crabtree said this is likely a conservative estimate of tax revenue.

“The tax implications of IMPLAN do not take into account specific tax rates and incentives and are not industry specific. Rather, the numbers are calculated based on total Louisiana tax revenue and broken down by industry,” Crabtree said. “For example, a manufacturing facility would pay more in property taxes than a bank in most cases, but in this scenario they would be equal based on linear relationships. Against this background, our tax estimate is rather conservative.”

The agreement drew criticism from companies including Together Louisiana, an organization that advocates for tax justice and human resource development.

In an Aug. 3 letter to Parish President Jaclyn Hotard and the St. John Parish Council, Together Louisiana analyst Erin Hansen explained that the tax implications of the CEA are significant, and St. John Parish is reducing funding for schools, government, law enforcement and more.

According to Hansen, under the terms of the CEA, the school board would receive $500,000 per year, as opposed to $2.1 million in ad valorem tax revenue that would be collected annually if Greenfield were subject to normal ad valorem tax procedures would. The difference between those numbers exceeds the budgets of all teachers at West St. John High, according to Hansen.

St. John Parish Council would receive $820,000 annually instead of $3.5 million, and law enforcement would receive about $620,000 instead of $2.6 million.

Joy Banner of the non-profit group The Descendants Project believes Greenfield and the port have been hiding behind “poor data and promises of jobs and economic development”.

“Our community, tax authorities and other officials have failed to do their due diligence and are effectively robbing our schools, our neighborhoods and our children of hundreds of millions of tax dollars, and we have to foot Greenfield’s bill,” Banner said. “The GNO, Inc. study specifically states that tax incentives are not considered, but the issue in question is $200 million in tax incentives. Even they can’t stand their own report and this project is clearly on the ropes.”

Responding to Pilot’s criticism, Hecht said it wasn’t a fair assessment that the agreement would cost the community more than $200 million in tax revenue.

“If this company or project had not materialized without this tax break, the tax impact would be zero. If the project goes through, then it’s the gross tax impact minus the tax credit. It’s net positive,” said Hecht. “The real question you want to ask when you see a pilot project is, ‘Was this tax break necessary to secure the project?’ If the net benefit is positive, you can say it’s a good deal.”

The agreement was approved by the Port of South Louisiana Commission by a vote of 8-1 during its April 6 session. Logs can be viewed here.

While local tax authorities were not given an opportunity to negotiate the terms of the CEA, Greenfield Representative David Rollo told the Port of South Louisiana Commission that the company met with the St. John School Board and made a commitment to support local education . especially in the West Bank. He clarified that the donations would go through a foundation directly affiliated with West St. John and not through the school board foundation.

According to a spokesman, Greenfield is building in-house training programs and developing a curriculum with River Parishes Community College to prepare locals for green jobs. Greenfield COO Cal Williams said the company hopes to be a catalyst for revival in the West Bank.

“Every time we meet with neighbors in the West Bank, we hear about the need to get this area back on its feet. The new high-paying jobs that we’ll be hiring for are part of that, but this economic revival is also about the nearby restaurant or local mechanic getting more work and also hiring more workers,” Williams said.

Greenfield has received its minor source air permit, LDNR and water permits from the EPA. The company is still in the process of receiving its approval from the US Army Corps of Engineers.

The construction period is expected to last around 27 months. If the company receives Army Corps approval later this year, the facility is expected to open in 2025.