Industrial Tax Exemptions

JENNINGS — Louisiana Spirits, the largest privately owned rum distillery in the U.S., is seeking a tax break for a $4.5 million expansion project, which company officials said will increase production and attract more visitors.

The company, which produces Bayou Rum products at its facility in Lacassine, asked the Jeff Davis Parish Police Jury Wednesday to approve the tax exemption. The Police Jury will consider the matter at its July 23 meeting.

The tax break would be for five years and would exempt the company from paying $66,892 annually in ad valorem taxes to help offset the cost of the expansion of its manufacturing process to include bottling of Bayou Rum products.

The exemption is part of the state's Industrial Tax Exemption Program (ITEP), which makes tax incentives available for manufacturers who commit to jobs and payroll.

Amy McFarland, who oversees hospitality for Louisiana Spirits and Bayou Rum, said the company is looking at increasing production, jobs and revenues with the expansion. The company currently pays the parish nearly $30,000 annually in taxes, which will increase with continued production and the addition of new liqueurs and labels, she said.

"We want to continue to support Jeff Davis Parish as we continue to grow," Office Manager Regina Hoeflicker added. "As everyone knows, we have an expansion that is going on, and it is almost complete."

Earlier this month the company officially opened an $8 million expansion including a 4,000-square-foot indoor/outdoor event center and 6,000 storage barrel library. The event center, which includes a stage and dance floor, is a venue for weddings, reunions, holiday parties, concerts, fitness programs and other local events, McFarland said.

The expansion created three new permanent jobs with $90,000 in salaries and 30 construction jobs with salaries totaling $2 million, according to information provided to the state.

Officials said the expansion will continue to create additional jobs in production and at the new event center with additional revenues coming from alcohol sales.

"We are continuing to add new revenue streams," McFarland said, adding that sales taxes and tourism dollars are expected to increase with expanded production and the events center.

Future plans for expansion are also being discussed, Hoeflicker said.

Consultant Robert Wege said the company currently has a tax exemption for its main facility which opened in 2013. However, Wege could not provide the Police Jury with the dollar amount of the original exemption on the initial building or how much time remains on the exemption.

Police Jurors Steve Eastman and John Marceaux asked for projections on sales tax revenues, what the parish would be giving up in property taxes and what benefits the company will be providing to the parish.

The new exemption is guaranteed to create a minimum of three jobs, but more are expected through the expansion, Wege said. The jobs will include two in production and additional jobs associated with the events center.
"Obviously we hope to create many more jobs than three, however if we don't create those three minimum there are fallback provisions for the abatement." Wege. "We felt three was a safe number that we could meet, however, we hope it to be more than that."

Payroll for the three jobs are expected to be $30,000 per job and employees must be from Louisiana, he said.

Louisiana Spirits currently employees 19 people with the majority of the employees from Jeff Davis and Calcasieu parishes, according Hoeflicker.

In March, the company opened its Cafe du Bayou coffee house adjacent to the distillery. The distillery also offers a visitors center with guided tours, tasting bar and gift shop.

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