Two companies were granted state incentives totaling a combined $2.25 million Friday in Baton Rouge by the Louisiana Economic Development Corp., which is part of the state’s economic development department.
Minnesota-based Lubrication Technologies Inc., also known as Lube Tech, received an economic development award of $750,000.
The LEDC board also agreed to guarantee repayment of $1.5 million of a $3.18 million loan sought by Bayou State Lumber Co. of Livonia in Pointe Coupee Parish.
Lube Tech agreed to spend $16 million to convert a Shreveport structure into a manufacturing plant for lubricants used in sports, marine and outdoor power equipment.
Gov. Bobby Jindal and Chris Bame, the firm’s chief executive officer, said earlier the new plant will employ 75 people across 226,000 square feet of floor space. Those jobs will carry average annual salaries of $41,400.
In addition to that annual economic impact of more than $3.1 million, the Louisiana Department of Economic Development estimated the new plant will generate another 205 indirect jobs. Company officials said 58 construction jobs also will be needed for the two-year conversion project.
Companies that receive an economic development award must fulfill their job and wage promises in order to retain all of that award, Gary Perilloux, communications director for the marketing and communications arm of the Louisiana Department of Economic Development, said Friday.
In addition to the $750,000 award, Perilloux said, Lube Tech is expected to apply for the state’s Quality Jobs program, which could provide $2 million in state tax rebates over a 10-year period.
In addition, Lube Tech is eligible to apply for a local industrial property tax exemption in Shreveport that possibly could save the firm more than $2.5 million over the next decade.
Perilloux emphasized that the $2 million in possible state tax rebates and $2.5 million in possible local government property tax exemptions are “very rough estimates” that could be affected by a variety of factors. Those factors include total capital investment, local millage rates and property depreciation schedules.
Seth Brown, LEDC program administrator for loans and investments, told the board the loan guaranty for Bayou State Lumber would help it purchase a large lumber mill on 191 acres near Lemoine in St. Landry Parish.
Brown said Lafayette-headquartered Home Bank would be asked to grant the loan to Bayou State Lumber.
A. Magruder Hazlip, a Bayou State manager and owner, told board members the Livonia mill would remain open to buy logs. Most of the saw operations would move to Livonia, where he said there would be 21 permanent employees.
State loan guarantees do not become effective until the land and improvements are actually purchased, Perilloux noted.
The state guarantee on 47 percent of Bayou State’s future loan from Home Bank was the only incentive for Bayou State in the package approved by the LEDC board Friday, Perilloux said.