Las Vegas Sun

March 28, 2024

2 local companies qualify for tax abatement incentives

Two local companies will receive tax abatement incentives from the Nevada Commission on Economic Development to expand their businesses in Southern Nevada.

Commissioners on Tuesday unanimously approved incentives for Ken’s Food Inc., Las Vegas, and Henderson-based Barbour Well Inc.

While the expansions planned by the two companies won’t create an abundance of new jobs, they ultimately will generate additional tax revenue for the state. Ken’s Food will receive $1.1 million in tax abatements over 10 years while Barbour Well will get $406,839 in incentives over 10 years.

Ken’s, which has operated a manufacturing and distribution facility in Las Vegas since 2003, is investing $15.3 million in new capital equipment and a $3.9 million expansion of existing warehouse space to develop a new retail bottling line to produce 16-, 18- and 24-ounce packages of salad dressings and barbecue sauce.

Michael Griffin, vice president of manufacturing for Ken’s, said the Las Vegas facility makes products to support West Coast sales with distribution to the Northwest, all of California and as far east as Denver.

The company qualified for tax abatements by adding 10 jobs and investing more than $1.3 million in capital outlay, meeting the required two of three criteria to receive incentives.

The company fell short of providing higher than the average wage in manufacturing of $19.82 an hour. The Ken’s application said the new jobs would pay an average $13.45 an hour, 32 percent below the statutory requirement.

Sales tax will be abated to 2 percent and personal property tax will be abated by 50 percent over 10 years. During that time, taxes would be abated by $1.1 million, but after 10 years the improvements will generate an estimated $1.6 million in new taxes and produce direct economic impact through supplier and consumer relationships of $30.4 million over 10 years.

Griffin said construction on the expansion would begin this month and be completed by December. The project will result in 70 construction jobs.

Barbour Well, which relocated to Henderson in late 2009, specializes in drilling large-diameter geothermal wells in support of alternative energy projects throughout Nevada, California, Utah, New Mexico and Idaho. Barbour has three decades of experience in geophysical logging, water well design, drilling and making water and oil wells more productive with down-hole video services.

The company met all three statutory requirements for incentives by creating six new jobs, making a capital investment of $5.4 million and offering average wages of $20.03, 1 percent over the industry average.

The company will receive a one-year sales tax abatement to 2 percent, saving it $330,620, a 50 percent modified business tax abatement over four years for $2,032 and a 50 percent personal property tax abatement over 10 years for $74,187.

Commission staff estimated the expansion would generate an estimated $996,417 in new taxes over 10 years and would provide direct economic impact and through suppliers and consumers of $21 million over 10 years.

While Barbour and its expansion will have a tiny impact on economic diversification, Lt. Gov. Brian Krolicki, who chairs the Economic Development Commission, said he is glad the company is a part of the Nevada landscape because it is a critical part of the supply chain in the development of alternative energy in the state.

In other business, the commission was told that Delta Sky, the in-flight magazine of Delta Air Lines, is planning to run a major story on future business opportunities in Nevada in its June edition.

Krolicki said the story is a great opportunity because it will address business in the state beyond tourism.

Delta is the second-busiest air carrier at McCarran International Airport behind Southwest Airlines. The largest airline in the world after its merger with Northwest, Delta and its affiliate carriers fly to 348 destinations in 64 countries and last year flew more than 162 million passengers.

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