City Incentives Help Midland Business Expand
Posted on Aug 20, 2019
by Paul Wedding
City council members approved a deal last week to provide more than $2.7 million to a Midland company expanding their Odessa location, expecting to add nearly 60 additional jobs to the area.
The deal would give a grant of $2,757,294 to Rack Industries, a Midland-based oilfield manufacturing company. The Odessa Development Corporation first approved the deal at their July meeting before City Council, and will pay for the grant through their fund.
As part of the deal to receive the funding, which will be paid out over a five-year period, the company will add 59 new jobs, retaining 34 jobs, and adding over $7 million onto their payroll over the next five years.
“They’re growing their location and then going to add on and build a new facility in addition to what they already have on Murphy and Crane,” Odessa Chamber of Commerce Economic Development Director Wes Burnett said. “So we’re excited about this project, it is a local business expansion.”
They won’t receive the full $2.7 million all at once, Burnett said. They have five years to meet their employment goal, meaning they need to add about 12 additional jobs every year, and will receive a portion of the grant annually in return.
Rack Industries Chief Financial Officer Kahla Kiker said they closed on the sale of their Odessa facility in January due to the growth of their business, saying the oil boom in the Permian Basin has been good for them.
“We needed a larger facility and we just have some additional opportunities in terms of larger revenue growth to expand and we are just taking advantage of that location,” Kiker said.
Kiker said the company started in 2014, and has seen a lot of growth since then. While some companies are having an issue hiring and finding employees to come here, Kiker said she doesn’t think it will be a problem.
“I think our facilities were more of a problem in terms of confinement than the actual labor pool at the moment,” she said. “That’s what we were trying to overcome. I don’t think finding the people is going to be a problem because the majority of our people live in Odessa. The ones we’re recruiting also already live in Odessa as well.
This is one of several incentives deals ODC has approved lately. In July they also approved two deals for Odessa Separator, involving giving them $550,000 a year for five years for a $9 million capital investment of about 93 jobs, 34 of them retained, and a capital investment to the tire recycling facility on West Murphy Street. This investment would bring another 20 jobs to the area over a year, with $357,000 paid out in incentives over five years.
“The local expansions are definitely on the rise, I think,” Burnett said. “It’s going pretty well; we’re getting a lot of interest.”