The Arlington City Council approved tax incentives Tuesday for a project to build 1.2 million square feet of industrial space at the former Six Flags Mall site, which General Motors will use to house automotive suppliers.
The development of two industrial warehouses across Texas 360 from the Arlington assembly plant, to be called Arlington Logistics Center, would allow for parts delivery in “minutes, not days,” improving production efficiency, a city official said.
The vote was 8-0 with Mayor Jeff Williams abstaining. There was no discussion.
The council approved tax break agreements with GM, which builds sport utility vehicles at the plant, and NP Arlington Industrial Llc., which will own the buildings and lease them to GM, which would in turn sublease tenant space to the suppliers. NP Arlington is an entity created by the owner of the 80-acre mall site — Northpoint Development of Kansas City — to manage the industrial development.
The project site is in the northeast corner of Texas 360 and East Division Street, catty-corner from GM. The buildings are expected to be completed by December 2018.
Bruce Payne, the city’s economic development manager, said the city will benefit from the cost of its tax breaks.
“It has a community development component in that it’s getting rid of a dead mall and putting 80 acres back into production,” Payne said in an interview.
The city has two agreements with NP Arlington. One is a 10-year, 100 percent abatement of city property taxes on the added value of the site, which could save the company an estimated $2.6 million. The second is a so-called Chapter 380 agreement that will give NP $6 million in grants paid out when it meets certain benchmarks, and up to $2 million for public infrastructure improvements to the site, which will help reimburse NP’s cost to demolish the mall earlier this year.
The city has one incentive deal with GM — a 10-year tax abatement that would forgive 80 percent of business personal property taxes that the city would have collected. That could save GM an estimated $2.7 million over that period.
Payne said the 80-acre redevelopment project is healthy for General Motors, which sits on 250 acres when modern-day assembly plants are on 500 to 1,000 acres.
“Having suppliers so close to the existing plant is really a big help in in keeping their efficiency level high,” Payne said.
After the meeting, Councilman Robert Shepard said the deal “solidifies our relationship with GM, which is a 60-year relationship at this point. It ties GM to Arlington for an additional amount of time because of the synergy that the new development creates for GM.”
According to a city report, the Arlington Logistics Center will “support up to 1,800 employees at project buildout.” The 380 agreement requires a minimum of 950 workers by Jan. 1, 2023.
It’s unclear whether the project will bring new jobs to Arlington or whether some operations may relocate. No GM representative attended the meeting. A GM spokesman on Monday said details about the operation, including which suppliers will lease space, “are still in the works.”
Some answers could come Friday at a GM announcement at the mall site, which the company notified invitees about in an email near the end of the council meeting. The topic will be “to learn about the next great chapter in the relationship between General Motors and the residents of Arlington.”