Last night, the Jersey Village City Council approved an agreement with Argos USA, LLC for tax incentives in return for relocating their regional sales office from the energy corridor to Jersey Village. Argos USA used to be known locally as Southern Star Concrete until it was acquired by Cementos Argos in November 2005. They are the largest ready-mix concrete supplier in Texas and one of the largest in the United States.

Based on historical sales made from their Houston office in recent years, it is anticipated that approximately $200 million in sales revenue will be generated from the new office each year, leading to the city netting approximately $1.75 million annually in new sales taxes to the city’s general fund and an additional $1 million in annual revenues to the Jersey Village Crime Control and Prevention District, which helps to fund salaries and equipment for the Jersey Village Police Department.

To provide some comparison, the City of Jersey Village collected a total of $4,625,417 in sales taxes to  both the general fund and crime control fund during the 2016-2017 fiscal year. This agreement increases our sales tax revenue overall by over 59%. This, of course, doesn’t account for any additional property taxes and other cascading economic benefits that may be generated by the new business entering our city.

The city is entering into what is known as a “Chapter 380 Agreement” with Argos USA. Under Chapter 380 of the Texas Government Code, city governments such as the City of Jersey Village are allowed to offer economic incentives to companies to move into their city to create jobs and increase the tax base. In this case, in exchange for Argos coming to Jersey Village, relocating their sales office here and bringing 25 new jobs into our community, the city has agreed to reimburse 80% of the sales tax receipts received in the city’s general fund from Argos for up to 10 years. On an annual basis, this reimbursement caps out at $1.25 million and over the next 10 years caps out at a total of $10 million in reimbursement. Any sales tax revenues generated after the caps are reached will belong entirely to the city. No funds from the Jersey Village Crime Control and Prevention District will be reimbursed. The city will retain the full amount of sales tax collected into that fund.

In Jersey Village, sales tax in the amount of 8.25% of each transaction is collected on a wide variety of goods and services. 6.25% goes to the State of Texas. 1.5% goes into the general fund for the City of Jersey Village and the remaining one-half percent goes to the Jersey Village Crime Control and Prevention District.

Jersey Village was in competition with several area cities for this relocation and thanks to the efforts of our city staff in promoting opportunities in our city for businesses seeking to relocate, Argos learned of our economic development program and ultimately decided to move here.

This is a major win for the residents of Jersey Village. One of my long term goals when I joined the Jersey Village City Council was to shift the burden of funding general city services away from property taxes and work toward building a more robust sales tax base. Over time, I am hopeful that I can persuade my colleagues on city council to begin reducing the property tax burden on our residents as the new sales tax revenues are realized. We can begin by increasing the standard homestead exemption from the current 8% to the maximum 20%. As more sales tax revenues are received, we should go further by reducing our property tax rate, particularly as property tax values begin to rise faster than the rate of inflation.

This is only the beginning, folks. We anticipate similar deals in the near future. The future of Jersey Village is indeed a bright one.