Leaders praise tax rebates for Loya facility

April 05--El Paso Mayor Oscar Leeser and other leaders Monday applauded new city and county agreements to give Fred Loya Insurance almost $440,000 in property tax rebates for an almost $10 million claims processing center already under construction in East El Paso.

El Paso County Commissioners Court and City Council on Monday approved economic development agreements to provide the El Paso-based auto insurance company property tax rebates for an eight-year period for constructing the facility and adding 562 jobs over five years, and retaining 176 employees in El Paso.

The company employs about 3,700 people in several states, including 743 in El Paso, said Sivi Contreras, the company's human resources director. It reported sales of $571 million in 2014, the latest public data available.

In May, company Chief Executive Officer Fred Loya Jr., whose father started the company 42 years ago, told the El Paso Times that the company would build the facility on vacant land at 11577 Pellicano, near George Dieter Drive, He did not say the company was seeking or needed tax rebates for the project to be built in El Paso.

The 84,000 square-foot building is expected to be completed by the end of this year or early next year, said Michael Menchaca, the company's corporate purchasing manager and one of two executives representing the company at the mayor's Monday press conference announcing the rebates for the expansion. Fred Loya, the company's chairman emeritus, and CEO Loya Jr., did not attend the City Hall press conference.

Fred Loya Insurance has been in El Paso many years, and "no one's ever thanked them for their investment and their trust in our community, and they continue to invest in El Paso," Leeser said. "This fits the 'Open for Business' (program) that this administration, City Council, and myself have really been pushing forward."

The tax rebates were needed because the company operates throughout the country and has other options to locate facilities, Leeser said.

"The Loya family does have the option to go somewhere else," Leeser said. "I know they could have went anywhere they wanted to. That's our goal, to thank people for trusting El Paso and continue to expand."

Menchaca said after the press conference that he did not know if the company would have built the claims center elsewhere if the tax rebates had not been approved.

"It was beneficial," he said of the rebates.

The company had the option to expand a large claims center in San Antonio, in McAllen or Dallas, said Menchaca and Contreras.

Neither Leeser or Cary Westin, director of the city Economic and International Development Department, knew exactly when the city began talking to Fred Loya officials about possible tax rebates, and whether those discussions began before or after the company began construction of the claims center.

"These (rebates) are not incentivizing the company for sales and construction," but to insure it invests a certain amount of money and adds and retains jobs for at least several years, Westin said.

City Rep. Lily Limón, in whose district the new Loya facility is being built, said the company's expansion is personal to her because, she said, she taught Fred and Maria Loya's children at Hanks High School years ago.

"We go a long, long way, and it's wonderful to see the company continue and flourish. It's very personal," Limón said.

Rolando Pablos, CEO of the Borderplex Alliance, a regional economic development organization based in El Paso, and City Manager Tommy Gonzalez also applauded giving the rebates for the expansion.

"Today is a great day because one of our own is expanding; one of our own is fulfilling its American dream of building a company, creating jobs and providing opportunities," Pablos said.

County Judge Veronica Escobar was not at the press conference. But she told the El Paso Times last week that she is "enthusiastically" supportive of granting tax rebates that help retain and grow a local headquarters.

The company will get tax rebates as long as it invests at least $9.7 million in the new facility and adds 562 jobs within 5 years, and retains 176 jobs, Westin said. Those jobs must remain here during the time the company is paid tax rebates, he said.

The city is to pay $271,244, and the county $168,437 in property tax rebates to the company over eight years if it meets requirements in the agreements.

Information: fredloya.com; agenda.elpasotexas.gov.

Vic Kolenc may be reached at 546-6421; [email protected]; @vickolenc on Twitter.

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