Incentives

Objectives
The Lindale Economic Development Corporation (LEDC) and the City of Lindale are committed to enhancing and expanding the local economy. Together we strive to be a catalyst for high-quality commercial and industrial development in all parts of the community.

The primary purpose of the LEDC is to assist in the creation of new primary jobs and the attraction of new capital investment. A secondary purpose is to provide infrastructure assistance to commercial developers planning large-scale projects in Lindale (generally $10 million or more). Lindale EDC provides complete and confidential site location services free of charge to its clients.

Regional Approach
Lindale enjoys an excellent relationship in economic development with the City of Tyler. In fact, in 1998, the Texas Department of Economic Development awarded Lindale and Tyler for their cooperative work on securing the Target Stores Distribution Center, which is Lindale's largest employer. There is a progressive posture toward economic growth within each of these cities.

Incentives
Economic development incentives help firms make investment decisions based on reduced cost and increased profitability. Incentive programs can generate long-term benefit to communities by lowering unemployment and increasing annual earnings.

Development incentives may be negotiated on a case-by-case basis to assist an eligible company to expand or locate to the Lindale area. Incentive packages can be provided individually or jointly by the Lindale EDC, the City of Lindale, and/or the Tyler Economic Development Council, which serves all of Smith County. The availability of, and size of any incentive is determined by several factors, including number of new jobs to be created, new capital value to be created, level of pay and benefits of the new full-time jobs, whether the business is a targeted industry, and community/board support of the incentive.

Economic Development Tool.  The following economic development tools are available for selected projects. 

• Economic Development Sales Tax
• Tax Increment Financing
• Free Land or Discounted Land
• Economic Development Grants and Loans (Chapter 380 Contracts)
• Community Based Assistance
• Triple Freeport Exemption
• Smith County Revolving Loan Fund (SCRLF)
• Tax Abatement
• Skills Development Fund Workforce training grants through the State of Texas
• SBA 504 Loans
• Texas Enterprise Fund
• Other financial programs provided by the State of Texas (Off Site Link)

Economic Development Type A Sales Tax
In 1994, the citizens of Lindale adopted a half-cent sales tax to promote new and expand existing industrial and manufacturing activities. The Type A sales tax proceeds may be used to fund promotional and development activities related to business attraction/retention; financial assistance to businesses; land and building purchase, lease and upgrade; infrastructure upgrade and placement; and training and education. Industrial development is the primary target, but large retail/commercial projects may be eligible for infrastructure assistance, too.

Tax Increment Financing
The City of Lindale and all eligible taxing entities have formed the Tax Increment Financing Reinvestment Zone #2 (TIF) which covers 263 acres north and south of I-20 near Harvey Road (CR 433). The area includes the Lindale Industrial Park and Lindale Business Park and surrounding properties. The TIF Board will consider using the TIF to finance needed public infrastructure improvements in the Zone. Improvements can be paid for by the TIF then repaid by the taxes generated by the development, or could be paid upfront by a developer, then repaid to the developer through taxes generated by the developer.

Free Land or Discounted Land
LEDC has developed infrastructure in the 125-acre Lindale Industrial Park. The infrastructure improvements were completed in the first quarter 2012. The target niche for the Park is Light Industrial Manufacturing and Distribution. It is within the Lindale City Limits and already is zoned for Light Industry.  This property has excellent direct access to I-20 at Harvey Road, and is within the TIF Zone #2. LEDC can provide land (free or discounted) based on the projected level of investment and jobs to be created by an industrial client.  Parcels from 2 to 43 acres are available in the park.  See more information about the Park on this site at: Lindale Industrial Park.

Economic Development Grants & Loans (Chapter 380 Contracts)
Chapter 380 of the State of Texas Local Government Code provides legislative authority for municipalities to establish a program for making loans and grants to stimulate business and commercial activity in the City. The City of Lindale is open to consideration of Chapter 380 agreements.

• The City of Lindale does not have capital recovery fees. This can amount to a significant savings for a new project.
• Fast-track city permits.
• Possible waiver of city permit fees.

Community Based Assistance Could Include:

• Relocation assistance for key personnel.
• Job fairs to attract employees.
• Residential real estate assistance (non-financial).
• Community orientation, introductions and tours.
• Media-worthy ground-breaking events.
• Identification of business support services.

Triple Freeport Exemption
The Freeport Exemption exempts certain types of tangible personal property (i.e., inventory) from ad valorem (property) taxation provided the property is:

• Acquired in or imported into Texas to be forwarded out of state,
• Detained in Texas for assembling, storing, manufacturing, processing, or fabricating purposes by the person who acquired or impored it, and
• Transported out of state within 175 days after the date the person acquired or imported it into Texas.

Because oil, natural gas and other petroleum products are not considered freeport goods, they are not eligible for the exemption and therefore remain taxable. Even when goods are sold to an in-state purchaser rather than shipped out of the state, they may qualify for the Freeport exemption. However, the property must qualify under the above requirements as Freeport property, and must be transported out of the state within 175 days after it was first acquired in or imported into the state.

A company that manufactures or distributes a product from within a jurisdiction which has been designated a freeport will realize a significant savings if it serves national or international markets. This could therefore encourage additional investment in buildings and equipment in the local jurisdiction.

The amount of the goods in transit exemption for each year is normally based on the percentage of inventory made up by such goods last year. In Smith County, the application process is handled by the Tyler EDC. A two-page application requests a company to identify property owned on January 1 of each year (or Sept. 1 of the preceding year if the company receives a Sept. 1 inventory appraisal). A company must apply for the exemption each year from the Smith County Appraisal District between Jan. 1 and May 1.

Smith County Revolving Loan Fund (SCRLF)
The Tyler EDC manages the Smith County Revolving Loan Fund, which provides loans to firms that create or retain permanent jobs through the retention, expansion, or establishment of companies in Smith County.

Eligibile Applicants - Businesses located or locating in Smith County that are producing a product or providing a service from which a majority of their sales are derived outside of Smith County. The company should also provide evidence of a financing gap and should have a substantial potential for retention or creation of jobs. Eligible uses include working capital, equipment and machinery, purchase and development of land an building, pollution control abatement. Inelibible uses include speculative activities, loans which assist the relocation of jobs from another labor area, investment, refinancing, or to provide the equity contribution required for federal loan programs.

Loan Particulars. The maximum loan amount is $200,000. The minimum loan is normally $50,000. The loan ration will be a least two private dollars to one SCRLF dollar. Private-sector dollars include private financing from other lenders or equity investment. Owner participation will generally be 20% of the total project costs. The loan may be subordinated to the primary lender or funding source.

The interest rate will normally be fixed and at or slightly higher than the national prime rate. The loan term will be tied tot he life of the assest financed, up to 25 years. Working capital loans shall be for five years or less.

Tax Abatement.  A common economic development tool that can defer property taxes on new plant and equipment expenditures for expanding companies. Must meet criteria in the Smith County/City of Lindale tax abatement policy. (May not be offered within the TIF Zone.)

Skills Development Fund
This program assists community and technical colleges in financing customized job training for local businesses. Average training costs are $1,000 per trainee. This fund successfully merges business needs and local job-training opportunities into a winning formula for putting people to work. The Fund will provide training for specific skills for workers who will be hired by the businesses. The program is managed by the Texas Workforce Commission, and the application process starts with Tyler Junior College West Campus Office of Continuing Education. More information on the Skills Development Fund can be found at the Skills Development Fund web page at the Texas Workforce Commission site.

SBA 504 Loans
Businesses that are located in or are interested in locating in Lindale have access to the Small Business Administrations 504 Loan Program through the Tyler based, Greater Texas Capital Corporation. The 504 Certified Development Company (CDC) Program provides growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings.

Typically, a 504 project includes a loan secured with a senior lien from a private-sector lender covering up to 50% of the project cost, a loan secured with a junior lien from the CDC (backed by a 100% SBA-guaranteed debenture) covering up to 40% of the cost, and a contribution of at least 10% equity from the small business being helped. The maximum SBA debenture is $1 million for meeting the job creation criteria or a community development goal. Generally, a business must create or retain one job for every $35,000 provided by the SBA. The maximum SBA debenture is $1.3 million for meeting a public policy goal.

Texas Enterprise Fund (TEF) (State of Texas Program)
Governor Rick Perry has made job creation and economic development a cornerstone of his administration. At the Governor's request, and with the support of Lieutenant Governor David Dewhurst and Speaker Tom Craddick, the 78th Texas Legislature established the Texas Enterprise Fund (TEF) to allow the state to respond quickly and aggressively to opportunities to bring jobs and employers to Texas.

The Texas Enterprise Fund provides the state's leaders with a "deal closing fund" that has the flexibility and financial resources to help strengthen the state's economy. The fund can be used for a variety of economic development projects, including infrastructure development, community development, job training programs and business incentives. Before funds can be awarded, the Governor, Lieutenant Governor and Speaker must unanimously agree to support the use of the Texas Enterprise Fund for each specific project.

These funds will be used primarily to attract new business to the state or assist with the substantial expansion of an existing business as part of a competitive recruitment situation. State leadership also will be able to use Enterprise funds to leverage other resources for an economic development project. The Governor's Office will work closely with local leaders to tailor incentive packages that best meet the needs of local communities and businesses.

For more information on the Texas Enterprise Fund, contact the State of Texas Business Development at (512) 936-0101 or visit the TEF website: Texas Enterprise Fund (TEF)

Incentives Disclaimer:
Please note that incentives are not offered for every project. Incentives typically require approval from one or more boards or commisions. The Lindale Economic Development Corporation (LEDC) and the City of Lindale will work with each applicant to determine the specific needs of the applicant and tailor an incentive package to that company's particular needs.

PAST PROJECTS

LEDC has participated in a number of projects since our formation in 1994.  See information about our past projects at the About LEDC Page.