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City renews commitment to Trane, re-establishes a reinvestment zone

Faith Harper - Tyler Morning Telegraph

Published on Wednesday, 26 October 2016

The power of a reinvestment zone was re-established around Trane, but city officials said there is no plan to offer the company any tax incentives.

On Wednesday, the Tyler City Council approved re-establishing the zone, which encompasses the air conditioner’s facilities off Troup Highway. The area contains nearly $101 million in real and personal property and is the employment hub for nearly 1,200 people, said Heather Nick,managing director of planning and economic development for the city.

Trane’s Tyler facility opened in 1956 as an air conditioning plant and grew into one of Tyler’s largest employers, as well as one of the largest Ingersoll-Rand facilities in the world.

 

Wednesday’s decision was largely a paperwork action.

 

By state law, reinvestment zones must be renewed every five years or they expire. The zone must be established prior to offering any sort of tax incentives, such as abatements. Though the city and the Tyler Economic Development Council have no current plans to offer an incentive to the company, it is easier to keep the zone open than scrambling to recreate it in the future.

“Trane has been a good employer in the city of Tyler, and they have proven to be a smart employer to stay in the city of Tyler and in the United States,” Mayor Martin Heines said. “We are willing to do whatever we can to help them keep their facility in Tyler and grow here.”

 

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The company was given abatement packages in 1993 and 2007, Ms. Nick said.

In November 2015, the council approved a resolution supporting Trane/Ingersoll-Rand’s participation in the statewide Enterprise Zone program.

That program allows designated projects to get breaks on state sales and use taxes. The company’s participation in the program is not impacting local tax revenues, but Trane needed a City Council nomination to be eligible for the program.Trane proposed a $22 million capital investment, as well as a commitment to keep 1,187 jobs in the city.

Over five years, Trane anticipated spending $3 million on renovating its existing building, including the roof, electrical and infrastructure. Of that, $459,000 will be spent on labor and construction.Another $19 million will go toward new machinery by 2019. That includes purchasing manufacturing equipment for stamping, painting, fabricating and assembling air-conditioning units.The improvements are designed to make the manufacturing process more efficient and make the final product more cost effective for the company.The commitment also included maintaining at least 1,187 yearlong employees over the next five years, in addition to the seasonal employees the company employs during peak demand.

Twitter: @TMTFaith