Earth Root Holdings LLC tax abatement would create jobs

MIDLOTHIAN – The Midlothian City Council approved a resolution earlier this month authorizing the execution of the City of Midlothian Tax Abatement Agreement with Earth Root Holdings LLC.

The possible incentive is equal to 50-percent of the purchase price for a project related to the creation or retention of primary jobs.

Kyle Kinateder, president/CEO of Midlothian Economic Development, who acted as the facilitator between the company, MED, city and county said, “The Earth Root Holdings project is a significant addition to our community.  

“Not only will they be building the first facility at the Midlothian Business Park, but the company’s product helps to expand our community’s manufacturing base.”  

Kinateder said the company’s culture of quality will be seen through the proposed state-of-the-art manufacturing facility.  From this facility, products will be manufactured and distributed throughout the world.     

The company is under contract to purchase the approximately 85 acres located within the City of Midlothian and the proposed Midlothian Technology Commercial-Industrial Tax Abatement Reinvestment Zone Number 15.

According to the proposed City of Midlothian Tax Abatement Agreement, the Company will be required to maintain a specified number of full-time jobs, annual payroll, and total taxable value. 

As the company is compliant to the agreement, they will qualify to receive a 10-year tax abatement on all new real and personal property from the City of Midlothian. 

Throughout the term of the agreement, the company will be required to report its compliance through an annual report.

According to staff at a recent Midlothian City Council meeting, it is projected the company will save approximately $2.2 million over 10 years. 

During this same period, the City of Midlothian will generate approximately $1.9 million.

Earth Root Holdings LLC the company intends to develop a 600,000+ square foot building, along with a 300,000 square foot expansion used for manufacturing, warehousing, and distribution. 

“The economic development incentives are being used to attract the company to our community,” Kinateder added. 

“The agreements are structured as post-performance incentives, meaning the incentives are given only after the benefits have been realized by our community.  

“Earth Root Holdings has embraced this structure and is working in partnership to grow our local economy.” 

For those unfamiliar with Earth Root Holdings, Bizapedia reports the company is a Texas Foreign Limited-Liability Company filed on July 14, 2020. 

The company’s principal address is in Delaware.

There were questions from residents regarding the principals on record for the company including Eric Chen, Jonathan Chen, Oi-Lin Chen, Reuben Chen, Sunny Beutler, Tei Fu Chen and Wendy Teng. Precinct 3 Ellis County Commissioner Paul Perry said the principals affiliated with the company are from Utah.

Regarding the tax abatement for the county Perry said, “Since the property is owned by the city there is no tax revenue generated currently. 

“We will start getting revenue with the sale. They are not using county roads or infrastructure. It is a win for us because we start getting revenue off the sale and millions of dollars’ worth of improvements from a clean industry that will also hire locally at above average wage levels.” 

The item regarding the tax abatement will be on the Sept. 22, Ellis County Commissioners’ Court agenda.

Ellis County Judge Todd Little’s office said, “The represented company Sunrider is a net exporter of health wellness and beauty products with a presence in over 50 countries. 

If approved, the agreement would introduce 210 new jobs and nearly $12 million of new taxable value added for the county, city, and school district over the next 10 years.”

Little’s office said he had no statement, but they would be “happy to assist with a quote on behalf of Judge Little once this item has been concluded by the Commissioners’ Court.”

It was also noted by the City of Midlothian that no General Funds will be used in connection with the agreement with Earth Root Holdings, and the total loan forgiveness amount is approximately $3-million.