City chips in $200K for Amfuel expansion into former Shanhouse building : KZHE News Blog
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City chips in $200K for Amfuel expansion into former Shanhouse building

by J.D. Bailey on 10/27/20

Amfuel, with a little help from the Magnolia City Council, is again set to expand its local fuel cell operation.

On Monday night, Council members passed a $200,000 economic development grant measure to aid the defense contractor with opening Amfuel Plant #2 at 1706 N. Vine Street in Magnolia. The 4.10-acre address was previously an industrial space for Shanhouse Outerwear Inc. and served as a warehouse facility for Albemarle Corporation.

With Amfuel’s expansion also comes the promise of new jobs, according to Ellie Baker, economic development director for the City of Magnolia.

“They’re going to try to increase their employees by 75 new jobs over the next 10 years,” she said Monday while explaining the parameters of the grant contract to the City Council. “They’re going to do their best to do that, but it guarantees 325 [jobs] over the next 10 years.”

Baker added that the city’s $200,000 grant will be used to repurpose and remodel the 1706 N. Vine industrial building for use as a spray booth facility. The new Amfuel property will make for its third operational facility in Magnolia.

The grant contact with Amfuel was passed unanimously by present Aldermen Larry Talley, Tia Wesson, Jeff White, Steve Crowell, Kelli Souter, Steve Nipper, and James Jefferson. Alderman Jamie Waller was not present.

The contract includes a “payback” penalty if the company cannot fulfill its job numbers, according to Baker. The new plant will be located just a half-mile north of Amfuel’s primary manufacturing facility at 601 Firestone Drive in Magnolia. The Firestone Drive site will remain in operation, according to Baker.

“They want the current building to be used for building and repairs,” she said.

The N. Vine industrial property is currently owned by JTS Capital Realty SB, an asset acquisition and management company based in Waco, Texas, according to Columbia County tax records. The firm purchased the 178,000-square foot property for $628,124 in February via a commissioner’s sale, records show. The building changed hands after JTS Capital SB in 2019 filed a civil consent decree of foreclosure against former Magnolia-based owner Trimek Properties LLC, according to Columbia County Circuit Court records. Trimek had owned the address since 2000. The county currently values the property at just over $1 million.

Amfuel’s purchase cost of the property was not stated publicly on Monday, but Elliott said the company expects to close on the N. Vine site within the next month.

The city of Magnolia and Amfuel have become serious economic partners over the past year. In October 2019, the City Council issued a $150,000 grant to help the manufacturer secure a $2.3 million U.S. Department of Defense (DoD) deal for new “preferred cell” spray booths. In that agreement, Amfuel and the DoD put up the bulk of the funding. The city in April also leased the former Zodiac-Amfuel industrial property at 2015 Field Street for a small fee. The formerly overgrown site, which had been functioning as a Magnolia Utilities storage facility, is now a completely renovated and functional manufacturing plant, according to Elliott, that employs dozens of workers.

“There will be 38 heads in that facility,” she said.

Elliott also said the company plans to add a storage extension at the property.

With Monday’s $200,000 grant, Magnolia Mayor Parnell Vann said the city will no longer be able to aid Amfuel again financially due to “tapped” economic development resources. He noted, though, that military contract manufacturing jobs are worth the expenditures, and the city will help support the company in any way it can. 

“My thoughts have always been that if the Department of Defense is going to invest in Magnolia, then we need to invest in Magnolia,” he said.

The new owners of Amfuel have expressed their intent to stay in Magnolia and make the plant successful. With Monday’s announced expansion, the company has thrived after its former Texas-based ownership group filed for Chapter 11 bankruptcy nearly three years ago.

Amfuel has also ordered robotic systems for its spray booth operation, according to Elliott. The Amfuel executive said the equipment will not affect future hiring, stating that the company intends to increase its in-plant manpower as well.

Alderman James Jefferson, who runs a local nonprofit that deals with Columbia County District Court community service and job preparedness, said he hopes that many of his program’s participants will be considered for job opportunities as Amfuel expands.

In other City Council News: 

- The Council approved a millage increase for the Magnolia Fire Department pension fund. The new tax is levied for 2021 is 0.75 mills. Combined with the Magnolia Police Department pension fund, the total police, and fire pension millage is now 1.75 mills. The police pension millage was not raised for 2021 and will remain at 1 mill.

The city’s general fund millage will remain at 1.5 mills. This rate will generate roughly $200,000 to help pay fire and police salaries, according to City Treasurer Kim Newell.

The mayor said he thought city millage may be able to be decreased after 2021.

- A resolution was passed to fund the repaving and re-striping of three blocks-worth of Pine Street in front of the Magnolia Post Office. The cost of the project for Magnolia is $62,650. The project was aided by the state, according to the mayor. The low-bid came in from Tri-State Asphalt of DeQueen. The paving work has already been completed, but, as of Monday, it still needed to be re-striped.

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