Community Renewal Good Stories - Southern Alabama

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Tax Incentives Encourage Manufacturer To Consolidate Operations

Southern Alabama, RC

With a plant in Marion, Alabama, and another in Knoxville, Tennessee, TekPac was looking to improve company efficiency. When HUD designated the Southern Alabama RC in January 2002, TekPac jumped at the chance to consolidate its operations and take advantage of the tax savings.

TekPac's primary business had been manufacturing synthetic medical devices at its Alabama site. When it merged operations, the production of food spices and room deodorizers shifted to Marion as well. The consolidation not only allowed TekPac to expand its selection of products, but also to increase its workforce by 8.5 percent. In January 2002 the company had about 65 full-time employees and as many as 35 part-time employees.

"Approximately 90 percent of the company's employees live in the Renewal Community and the RC wage credit is a major benefit to the company," said a TekPac manager. The company will be able to save more than $50,000 each year through the RC wage credit alone, the manager predicted. Businesses in the RC can earn up to $1,500 a year in wage credits for each employee residing in the RC. The RC program has not only stabilized TekPac's workforce at the Marion location but also expanded employment opportunities for area residents.

For more information on the programs of the Southern Alabama RC, contact Beatrice Forniss of the Alabama Department of Economic and Community Affairs at (334) 242-5464.