Jeff Davis School Board grants tax exemption for Bayou Rum
Published 9:14 am Friday, May 26, 2023
Jeff Davis Parish School Board members on Thursday approved an industrial ad valorem tax exemption for a nearly $10 million expansion project for a privately-owned distillery in Laccassine.
The board voted 6-4 to approve the five-year, 80 percent industrial ad valorem tax exemption for Louisiana Spirits, doing business as Bayou Rum.
Board members voting to grant the exemption were Greg Bordelon, Charles Bruchhaus, Janet Jones, Paula Lejeune, Summer Lejeune and Greg Patterson. Those voting against the exemption were David Doise, Blake Frey, Blake Petry, and Russell Walker. Mason Dobson and Phillip Arceneaux were absent from the meeting and President Paul Trahan did not vote.
Email newsletter signup
After the meeting Walker, Petry and Doise said they voted against the tax exemption because their constituents were concerned about an existing business receiving tax incentives.
“I am the voice of my constituents and most of them are farmers or ag-related,” Doise said. “We have a new John Deere dealership going up here and they are not getting all these exemptions.”
Walker said of 37 people he talked to, only one in his voting district asked him to vote for the exemption.
On Wednesday, the Jeff Davis Parish Police Jury voted 8-3 Wednesday to approve the same request with Police Jurors Kori Myers, Byron Buller and Butch Lafarge voting against the exemption. Police Juror Tim McKnight was absent from the meeting.
The exemption has also been approved by Sheriff Ivy Woods.
Jeff Davis Parish Economic Director Creed Romano said the exemption is part of the state’s Industrial Ad Valorem Tax Exemption Program (ITEP), which offers a tax incentive for manufactures who make a commitment to jobs and payroll in the state.
In addition, the ITEP Program requires that manufactures receiving the 80 percent property tax abatement to pay 20 percent of their assessed property taxes to the local taxing authorities. Manufacturers are also required to pay local sales and use taxes.
“On all projects, applicants must demonstrate a genuine commitment to investing in the communities in which they operate, and a genuine commitment to creating and retaining jobs in those communities,” he said.
Manufacturers have an option to renew the exemption for an additional five years on qualifying capital investments related to manufacturing.
“People say we are losing (revenues), but we are gaining,” Romano said. “We have a beautiful facility out there that wants to expand and that is going to attract more industry to this parish.”
Romano said the expansion project will cost nearly $10 million, including $4 million in building materials, $3.7 million in machinery and equipment and $2.7 million in labor and engineering. The parish will receive $389,107 in anticipated sales tax collections on the building materials and equipment.
The anticipated property tax collection on the proposed facilities is $28,096 a year. The total anticipated property tax beginning in 2025 is $210,540.
Stoli Director of Manufacturing and Louisiana Spirits President Angelo Torre said despite the property tax exemption the company will continue to pay sales taxes revenues from gift shop sales and local machinery investments to the parish over the next five years.
The expansion will ease overcrowding of the current facility, increase the company’s bottling line production and storage, as well as add jobs, he said. The capacity of the bottling line is expected to go from 300 bottles per hour 3,600 bottles an hour, which will result in an increase in trucking and shipping of the products and an increase in products sold generating more sales taxes for the parish, Torre said.
“For us to create more revenue in both the gift shop and our facility we have to expand,” Torre said. “We don’t have unlimited funds and every little bit helps.”
Bayou Rum generated $50,691 in sales taxes, mainly from the gift shop, in 2022
In addition to the expansion of the bottle line equipment, Torre said the company will also have to increase the capacity of its distillation equipment and expand its warehouse and barrel library where its rum products are “aged.”
About 50 construction jobs will be created by the expansion which will result in a slight increase in permanent jobs with roughly three jobs created, Torre said.
The distillery currently has 37 employees, but that is projected to increase to 40 by the end of the year with an estimated payroll of $1.8 million. About a third of the employees are from Jeff Davis Parish, Torre said.