Tax abatement proposed for cold storage company Americold

Tax abatement proposed for cold storage company Americold

Published on September 25, 2024

A proposed tax abatement was recently presented to City Council to support the local expansion of Americold, one of the largest temperature-controlled warehousing and distribution providers in the world.

Americold currently employs 16,000 people, and has 242 locations worldwide. Four of those locations are already in Fort Worth, along with single sites in Dallas, Grand Prairie and Mansfield.

This project would support the expansion of Americold's existing location at 4900 Blue Mound Road. The company's current building sits on 22 acres, only seven of which are developed.

The company is proposing to more fully expand into the remaining space, committing to $123 million in capital investment - $68 million in real property improvements by December 2027, and $55 million in business personal property by January 2028.

Americold would also commit to creating a minimum of 85 full-time jobs by December 2025, with annual average salaries of more than $65,000. Additionally, 15% of construction costs for the expansion would go towards business equity firms.

In exchange, the City of Fort Worth would enter into a seven-year tax abatement of up to 50% of the incremental value of both the company's real and business personal property - estimated at $2.5 million. However, this abatement would be subject to company performance on the commitments listed above; if the commitments are not met, the abatement could be reduced or forfeited.

If approved, the project is expected to generate more than $2.5 million in gross new net taxes for the city each year, essentially paying back the incentive in a little less than three and a half years.

Cold storage warehousing involves storing perishable or other sensitive goods like food, medicine or specialized products in climate-controlled environments. National trends, such as an increase in e-commerce and supply chain onshoring, have created increased demand for cold storage.

Fort Worth is currently underserved in cold storage facilities, which play a critical role in strong supply chains. Existing facilities in Fort Worth are at nearly 99% occupancy, which limits capacity for new clients, and no cold storage units were under construction in the city as of the fourth quarter of 2023.

Americold's expansion would not only provide additional cold storage bandwidth for companies on the western side of the DFW Metroplex, but it would also strengthen Fort Worth's logistics industry and healthcare industry, as medical professionals rely on cold storage to transport medication, equipment and other temperature-sensitive supplies.

The tax abatement will go before the Fort Worth City Council for final consideration on Tuesday, Oct. 15.

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