Hiland Dairy being considered for tax abatements from Tyler, Smith County

Aug. 20--Hiland Dairy Foods Co. is being considered for five and a half years of tax abatements for an expansion it's planning just outside of downtown Tyler.

The company is planning to invest $45 million into expanding its facility near East Locust Street and more than double its workforce from 74 to 154.

The Tyler Economic Development Council is recommending the company not pay property taxes on the expansion to the city of Tyler, Smith County and Tyler Junior College for several years.

Across all three taxing entities, the development council is recommending Hiland Dairy receive a 100 percent abatement on the expansion from tax years 2019 to 2023 and receive a 50 percent abatement in tax year 2024.

Hiland Dairy, based in Missouri, bought the Tyler dairy manufacturing operations from Brookshire Grocery Co. in 2017. At the time, Hiland Dairy had 2,600 employees and 12 processing plants across the region.

The Tyler City Council voted in July to allow Hiland Dairy to close a block of East Locust Street for its expansion. The company, which is located on the south side of the street, also owns three smaller lots north of East Locust Street.

At a regular meeting at 9 a.m. Wednesday at Tyler City Hall, the City Council will vote on whether to approve the tax abatements. The other entities will vote on the tax abatements in the next few months.

Barry Beaman, the general manager of Texas operations for Hiland Dairy, said he is excited about the expansion. He said the plan is for the Tyler facility to handle dairy operations, including processing and shipping, throughout the state.

"We'll distribute milk throughout Texas instead of having it shipped from out of state," Beaman said. "Right now all that going to other cities in Texas is coming out of Oklahoma and Arkansas, and we're expanding (the Tyler location) to be able to service all of Texas."

Beaman said the expansion depends on when the closure of part of East Locust Street would be complete and the parcel boundaries would be redrawn. He said construction likely would start in November and last a year.

"We're excited," he said. "We were really proud that Tyler is working with us like this in lieu of having milk shipped in from out of state. It's good for Tyler residents, it's good for the employees, it's good for the whole. It's a win-win."

Tom Mullins, the CEO of the Tyler Area Chamber of Commerce, speaks at a meeting of the Tyler City Council on March 28, 2018. (Erin Mansfield/Tyler Morning Telegraph)

Tom Mullins, the president and CEO of the Tyler Economic Development Council, said the expansion and tax abatement package has been in the works for a long time, and he said high-level officials in the city government have been involved.

"Hiland had new facilities in Arkansas that could've easily taken this production and made it there, made the milk there and shipped it back into Texas, so getting them to do the investment here in Tyler is a real win for us," Mullins said.

Mullins said Brookshire Grocery Co. encouraged Hiland around the time of the sale to keep the operation in Tyler. He said the city government later got the Tyler Economic Development Council involved in the incentive process.

"Hiland had approached the city when they were debating whether or not they would do the production in Tyler or move the production to Arkansas," Mullins said. "... We went to their site almost a year ago now."

Mullins pointed to the project as part of an ongoing trend of growth in Tyler. A company from Wyoming that services Caterpillar mining machines received approval for tax abatements recently, and poultry producer Sanderson Farms has started hiring.

Councilman Don Warren appears at a Tyler City Council meeting on Aug. 8, 2018 in Tyler, Texas. (Erin Mansfield/Tyler Morning Telegraph)

Councilman Don Warren, who represents the area, said his discussions with Hiland have mostly been about future participation in community affairs. He said the company is going to be a good neighbor for Tyler, and especially the neighborhood.

"That part of Tyler has not seen much growth or development in many, many years," Warren said. He said that's starting to change because Walmart came in last year and Hiland Dairy is expanding.

"And you've got the improvements going at Hillside Park, and you've got all the expansion down at (Delek Refining Ltd.)," he said. "I'm seeing things grow and evolve in East Tyler like I haven't seen in a number of years."

Warren said he is "100 percent" supportive of the proposed tax abatements and will vote in favor of them on Wednesday. He said the abatements are one of the reasons the company chose to expand in Tyler.

He added, "Who knows what this expansion would do for this part of Tyler just with what they're going to invest?"

TWITTER and INSTAGRAM: @_erinmansfield

___

(c)2018 Tyler Morning Telegraph (Tyler, Texas)

Visit Tyler Morning Telegraph (Tyler, Texas) at www.tylerpaper.com

Distributed by Tribune Content Agency, LLC.