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October 18, 2006
Defense contractor headed to Kyle
RSI to bring at least 70 jobs to the area
BUDA, Texas (STPNS) -- Response-Service-Innovation Inc. (RSI), a light manufacturing company, recently announced that it will construct a $3.5 million facility on Kohler?s Crossing, just east of the intersection of FM 1626.
Under the terms of a comprehensive $1.5 million incentives package with the City of Kyle, RSI will initially bring at least 70 full-time equivalent jobs to the community, with the possibility of ramping up to 200 employees.
City officials said not only will the company help bring ?breadwinner? jobs to the city, it will also attract other companies interested in building here, much in the same way the new HEB is expected to attract other retailers.
?This will mean an increase in ?wage earning? jobs, an increase in the local tax base and diversification of the local economy, and it will serve as a catalyst for future growth in Kyle,? said city Economic Development Director Diana Blank.
Harish Malkani, president of RSI, said the company was attracted to Kyle because of its size, location and desire to have RSI as part of the community.
City Communications Director Jerry Hendrix said RSI approached the city, but it was almost immediately clear that RSI and the City of Kyle could help each other.
for the city:
The City of Kyle has experienced a 600 percent population growth in the last five years, making it the second largest city in Hays County and one of the fastest growing cities in Texas.
In addition to the expanded employment base, Hendrix said there are numerous other benefits for Kyle?including substantial property tax benefits for Hays CISD, Hays County, and the Hays Emergency Service District?because the company received no tax abatements.
?My vision is that other cities of Hays County will see how important it is to attract that type of industry,? County Judge Jim Powers said.
Malkani said RSI also will offer summer internships for two Hays CISD students every year. They have done so in the past with Austin schools.
?...we [RSI and Kyle] are both young, proactive, growing organizations with our eyes on the future,? said Kyle Mayor Mike Gonzalez.
Incentives for RSI:
RSI and Kyle agreed on an incentive package after about six months of negotiations.
The total direct investment by the city is $1,848,029, which includes the, water and wastewater line construction, waived impact fees, an access road, and $100,000 interest-free financing for new equipment.
But the main incentive for RSI from the city was the ?Land for Jobs? grant.
In this arrangement, the city purchased five acres of land from Plum Creek where RSI could build its 40,000 square foot facility.
RSI will make annual payments to the city of $152,460, but the city will provide a $3,100 credit against that payment for every job RSI creates and retains for the six months before their payment is due each year.
That job credit is doubled to $6,200 for each employee who resides in Kyle.
The maximum credit for any given year is $152,460, and Hendrix said if the company retains at least 50 jobs a year for more than six months, after five years RSI will basically own the land outright for free.
Hendrix said there is no property tax while RSI is leasing-to-own the land for the first five years.
Founded in 1983, RSI mainly repackages and ?ruggedizes? computers and other equipment.
The military and aerospace market makes up 55 percent of the company?s total sales, while oil and energy make up 25 percent, medical makes up 10 percent, and IT/others make up the remaining 10 percent.
Of the 70 full-time jobs, Hendrix said 25 will be ?unskilled? positions for warehouse and light assembly workers. RSI?s average annual wage is more than $40,000.
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