Weber Metals, Inc., a commercial aerospace supplier specializing in metal forging, that owns a more-than-22-acre site partially located in Long Beach and Paramount, is seeking economic incentives through a new state property tax sharing program the city wants to establish in order to help the company expand its operation.
The supplier’s parent company, German-based Otto Fuchs Company, however, is still considering multiple sites for the estimated $295 million expansion investment and a decision has yet to be finalized, Justin Owen, financial director for Weber Metals, told the Business Journal.
The Long Beach City Council is expected to vote tonight, September 1, on establishing a capital investment incentive program (CIIP), which was created by the State of California after it eliminated redevelopment and enterprise zones to fix a budget deficit.
The state program works much in the same way as Long Beach’s sales tax incentive program, which establishes a property tax base that then must be achieved by a property owner before an economic subsidy can be considered, according to a city staff report.
The base established in the CIIP is the sum of the existing property tax base, plus the ad valorem value of the next $150 million in investment.
Under the CIIP, Weber would be able to receive 75 percent of the net property tax revenue received above the base for a 15-year period, estimated to total $790,000, according to city staff.
The City of Long Beach would receive the remaining 25 percent estimated at $265,000, plus about $2.5 million in property tax revenue for the 15-year period for a total of $2.8 million. According to the staff report, “at the end of the 15-year period, the incentive payments would terminate and the city would receive its entire allocation of property tax.”
If approved, the city would enter into a community services agreement with Weber Metals, detailing the terms and conditions of the CIIP.
The County of Los Angeles is also proposing to enter into a CIIP with Weber Metals, and plans to provide assistance of more than $1 million over the 15-year period while retaining $350,000 in tax revenue, according to city staff.
Weber Metals, which supplies parts to aerospace companies such as Gulfstream and Boeing, plans to expand its operation to establish a 60,000-ton hydraulic forging press complex to produce forgings of aluminum, titanium and nickel alloys for the commercial aerospace industry.
The company, which currently operates a 33,000-ton press that has been named a historic landmark by the industry, announced an initial investment of $170 million last year. The expansion is expected to grow the company’s workforce by about 75 employees by 2020, according to the city, which adds that jobs created will generally be in engineering, production and support.