Denton Economic Development
414 Parkway
P.O. Box 1719
Denton, TX 76202-1719
940.382.7151
940.243.9695 metro
940.382.0040 fax

Home » News / Reports » Articles of Interest » Council OKs Tax Breaks for Aldi

Articles of Interest

Council OKs Tax Breaks for Aldi
Incentives could land big distribution center from German grocery company
By Lowell Brown / Staff Writer, Denton Record Chronicle

The Denton City Council voted Tuesday to offer more than $1.67 million in tax breaks to a German grocery company to attract what could be the city's largest distribution center.

An official with discount grocer Aldi Inc. said the vote meant the company would probably build its 500,000-square-foot distribution facility in Denton, despite offers from at least five other cities in North Texas and Oklahoma.

"We haven't closed on the piece of property yet, but for us this was a huge step," said Scott Huska, vice president for Aldi's Texas division. "We're under contract working through the due-diligence phase."

The company plans to open the distribution center along with two Denton grocery stores and 23 other outlets in the Dallas-Fort Worth area by fall 2009. Exact locations of the Denton stores haven't been announced.

"What's unique about this company is they provide only one brand and one size of each item," said Linda Ratliff, city economic development director, who worked with the Denton Chamber of Commerce to help bring Aldi to Denton. "And that allows them to cut down on the costs of storage and shelf space, and offer low prices to their customers."

Denton is offering Aldi economic incentives worth $1,675,940 to build the distribution facility at the corner of Westcourt and Spring Side roads, south of Denton Municipal Airport.

In return, the company would pay an estimated $1.6 million to improve Westcourt Road from asphalt to concrete and add curbs and gutters. The roadwork would accommodate increased traffic to the facility and nearby properties, including city-owned land around the airport.

"Only about a fourth of the road improvements [that Aldi would fund] are in front of the Aldi warehouse," Deputy Mayor Pro Tem Joe Mulroy said. "The other three-fourths will benefit the city."

The company would receive a full tax abatement for five years on the distribution center building, equipment and inventory. The abatement would not apply to increases in land value.

Aldi would pay the city about $25,000 in property taxes on the land for the first five years and an estimated $360,000 in the sixth year and beyond, based on current tax rates.

Currently, the land is worth less than $27,000 and produces $168 a year in city property tax revenue.

Huska said Denton's incentives were "far superior" to those offered by other regional cities, which he declined to name.

The distribution center, worth an estimated $57.5 million, would create about 120 jobs with an average hourly wage of $17, Ratliff said. The company has already hired two University of North Texas graduates as district managers, positions that start with $65,000 annual salaries, she said.

Karen Dickson, vice president of economic development for the Chamber of Commerce, described Aldi as a good corporate citizen that treats its employees well.

"They view them as family members…. and they view the community as their family members also," Dickson said.

LOWELL BROWN can be reached at 940-566-6882. His e-mail address is lmbrown@dentonrc.com.