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Katy grants abatement to Southern Glazer’s

December 15, 2018

Southern Glazer’s Wine and Spirits soon will create 250 jobs as it opens a distribution center near Highway 90 and Cane Island Parkway in Katy.

After a Dec. 10 executive session, Katy City Council approved a tax abatement agreement with Houston Property Partners II LLC and Southern Glazer’s Wine and Spirits of Texas for development of about 42 acres in West Ten Business Park.

Pat McNamara, SVP of Risk and Facilities, Southern Glazer’s Wine & Spirits, said, “We are very excited to be partnering with Katy and Waller County. It is a strategic move that will benefit Katy, Waller County and Southern Glazer’s.”

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Houston Property Partners and Southern Glazer’s are buying the Oakmont, a speculation building constructed in the business park, said Byron Hebert, city administrator.

“We have hired an architect and a general contractor, who are working on the plans,” said McNamara. “We hope to have something ready by late January. Our target move-in date is August 2019.

“We came across the building in a search in the Houston metro area. During our initial meetings with the city and county, we quickly recognized what a strong success this would be,” said McNamara. “Katy is a great regional hub for Southern Glazer’s, positioning us to be one of the premier distribution centers in the country. It is one of the company’s largest buildings, at over 675,000 square feet.”

Requirements of the agreement include Southern Glazer’s making at least $3 million in improvements to the property and installing or maintaining at least $15 million of tangible personal property including racking, a mezzanine, conveyor system and lift trucks, prior to Jan. 1, 2021.

As of July 1, 2020, the company is required to have at least 250 employees and beginning with the year 2021, Southern Glazer’s is required to maintain a minimum $75 million in rendered taxable value of inventory. That inventory is not subject to abatement, said Hebert. The certified real property improvements must not be less than $35 million beginning Jan. 1, 2019. Failure to meet requirements means the company won’t quality for the tax abatement for that year or the abatement will be adjusted on a corresponding percentage basis. The schedule calls for a 40 percent abatement each year for a 10-year period ending in 2028.

In separate action, council also authorized the mayor to executive a tax abatement agreement with PME Oakmont West Ten.

Hebert said that Waller County and Fort Bend-Waller MUD No. 2 are participating with the city in the abatement agreement.

It’s not the only Dec. 10 action at the City Council meeting related to Waller County property. In separate action, City Council approved a petition for annexation of 150 acres. City Council also changed the zoning classification of the annexed property from R-1 (Single-Family District) to M (Industrial District).

Anas Garfaoui, city planner, wrote in a report to City Council that the zoning change fits within the surrounding area and had always been the intended use of the property between Interstate 10 and Highway 90. Katy Partners Ltd filed the petition for annexation. City officials said they expected to make an announcement soon about development of that property.

karen.zurawski@chron.com

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