A development agreement approved by the Huntsville City Council on Thursday night clears the way for construction to begin on Polaris’ new $142 million all-terrain vehicle factory in southeast Limestone County.
The contract outlines the city’s $18 million-plus industrial incentive package to Polaris, as well as the Minnesota-based company’s promise to employ at least 1,700 people in Huntsville at a minimum average wage of $18 an hour.
Polaris is expected to begin clearing and grading the 505-acre factory site next month. Director of Urban Development Shane Davis said the 630,000-square-foot manufacturing plant should be under construction by May, with Polaris’ first Huntsville-made ATVs rolling off the assembly line in late 2016.
The factory site borders I-565 just west of Greenbrier Road and wraps around the massive Target distribution center.
The city’s promises to Polaris include free land, sales and property tax breaks, a waiver on grading and building permit fees, and speeding up construction of Greenbrier Parkway.
The limited-access roadway will branch off Greenbrier Road near the Polaris site and cut northwest for 8.3 miles through mostly undeveloped Limestone County farmland to Huntsville Brownsferry Road, creating a new route between I-565 and I-65.
Free land is the city’s most expensive contribution to the project. Huntsville will buy the factory site from the McCrary family for $14.6 million and then deed the property to Polaris.
However, Polaris is required to meet specific employment and wage targets in order to avoid the $1.2 million annual mortgage payment. The company has committed to having 400 full-time employees in Huntsville by the end of 2016, ramping up to 935 workers in 2017 and 1,700 in 2021.
Polaris would own the factory site outright in 2027, said Davis.
Up to 18 percent of the jobs created at the Huntsville plant could be filled by current Polaris employees transferring from other locations, he said. Polaris has about 7,000 employees worldwide.
When it reaches full employment, Polaris’ Huntsville plant will have an annual payroll of nearly $75 million. Huntsville expects to capture about $5 million of that each year in the form of new sales taxes as Polaris workers buy groceries, gasoline, computers, cars and other goods in the city limits.
Tax breaks were another key incentive.
Polaris is exempt from all but the education portion of sales taxes on construction materials and manufacturing equipment for the new plant. The company will also get a 10-year reprieve on non-education property taxes from both the city and state.
Alabama’s incentive package totals $80 million, including about $31 million in cash to help offset Polaris’ construction costs and a customized recruitment, screening and pre-employment training program for people who want to work for Polaris.
“The state government, for all their woes, really did come to bat for us and work very hard,” said Huntsville Mayor Tommy Battle.
Meanwhile, Limestone County is chipping in $1 million to reimburse Polaris for temporary office and employee training space. Morgan County and the cities of Athens and Decatur are jointly contributing $950,000 toward the Greenbrier Parkway project.
Battle said Huntsville offered “the smallest amount of incentives possible” to snag Polaris, which scouted 100 different industrial sites in 14 states. The other finalists were Clarksville, Tenn., and LaGrange, Ga.
Waiving building and grading permit fees is a common industrial recruiting tactic nationwide, but this is the first time Huntsville has done it.
A new rule approved by the City Council on Thursday night says Huntsville will not charge building permit fees to new companies that invest at minimum of $100 million and create at least 1,000 jobs.