Is The City Paying Companies To Not Leave Town?

At the October 3, 2017, meeting, the El Paso City Council passed the following ordinance:

That the City Manager is hereby authorized to sign, on behalf of the City of El Paso, a Chapter 380 Economic Development Agreement between the City of El Paso and FULLBEAUTY BRANDS, LLC (“applicant”), a Texas Limited Liability Company, in order to retain the customer contact center located in El Paso Texas.

The City of El Paso is entering into a 380 grant agreement with FULLBEAUTY BRANDS, LLC, (formerly known as OSP Group, LLC) to maintain and operate a catalog sales order contact center on west side El Paso. The company has agreed to continue making El Paso the point of sale for all Texas sales, and to employ and retain 525 fulltime employees.

In consideration, the City is offering a six year 50% tax rebate of new sales, capped at $250,000 a year, for a maximum of $1,500,000 over the life of the agreement. In order for the applicant to qualify for the rebate, $1,250 will be paid per employee who earns at or above $12.70 an hour.

$12.70 an hour works out to about $25,000 a year. I guess that qualifies as a “high paying job” in El Paso these days.

But maybe someone decided that the deal didn’t look good, because here’s a column by Alfonso Espinoza, the Director of Human Resources for FullBeauty Brands, that appeared in the El Paso Times on October 12:

Fortunately, we have found a partner in the City of El Paso who gets us and the type of change we want to make in the fashion industry.

That is why my company recently committed to not only retaining the more than 500 workers we have in El Paso, but also adding 500 more over the next three years. By the end of this year, we anticipate filling at least 80 new positions at our customer service center.

There’s no mention of new jobs in the agreement, so that is, as Mary Poppins says, “a pie crust promise, easily made and easily broken.” If business conditions deteriorate for FullBeauty Brands, God forbid, they don’t have to hire 500 new call center employees.

The deal was all worked out in Executive Session on October 18, 2016, by the previous City Council, and it passed unanimously almost a year later.

That seems to indicate that City Council knew our tax base was collapsing a year ago, but they still couldn’t stop spending money like they were drunken sailors on shore leave.

I guess it’s good that we’re retaining a company that may have otherwise moved its call center to Indianapolis. But let’s not call it economic development. We’re just sticking our thumb in the dyke.