State is trying to lure PVC pipe firm to Utah

Company would create new jobs in Cedar City

State officials have offered a Houston-based pipe company $2.8 million in tax rebates if it will build a manufacturing plant in Cedar City that would create 98 new full-time jobs.

The Governor's Office of Economic Development board on Friday approved the incentive in an effort to lure North American Pipe Corp. to open a plant that would manufacture and supply PVC pipe to the California market.

The company has yet to decide whether to choose the Utah site. Calls and e-mails to North American Pipe by the Deseret Morning News were not returned by press deadline Friday.

Mike Nelson, managing director of recruitment and incentives for GOED, said the company is still considering an Arizona location.

"We just put our best foot forward and hope that they choose us," Nelson said. "The company is still making a decision, and they're not ready to make a comment yet."

The company has said its new jobs will pay an average of $42,172, about 225 percent of the Iron County median wage, according to board documents.

North American Pipe has estimated that locating the plant in Cedar City rather than Arizona would cost the company $400,000 to $700,000 more per year in additional transportation costs.

Under the state incentive, if North American Pipe chooses to locate in Utah, the company can recapture a portion of the sales, corporate and employment wage taxes it pays to the state over a 10-year period, with a cap set at $2.8 million.

"This company is planning on spending $68 million in Cedar City to build out their new plant," said Michael Sullivan, spokesman for GOED. "They also are planning on paying over $42 million in wages over the next 10 years, and they are planning on paying $9.3 million in new taxes to the state."

Jeff Edwards, president and chief executive officer of the Economic Development Corp. of Utah, an agency contracted by the state to bring new jobs and capital to Utah, said the EDCU helped North American Pipe apply for the tax incentive.

In addition to the tax incentive, Cedar City has invested roughly $640,000 in upgrades to land where the pipe company would be located. The city also would provide 50 percent funding to train employees at the new plant.

North American Pipe Corp. had requested $3.9 million in incentives to defray the cost of infrastructure improvements for rail service and electrical transformers and to offset its transportation costs.

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E-mail: danderton@desnews.com

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