Deep Eddy Vodka plans to relocate in Buda
A vacant building located at 150 Precision Drive in Buda is where Austin-born Deep Eddy Vodka, which is currently located in Dripping Springs, plans to relocate their distillery and base of operations.
On Tuesday, the Buda City Council unanimously approved a Chapter 380 agreement and a resolution authorizing an economic development agreement between the Buda Economic Development Corporation (EDC), Deep Eddy Vodka, which is currently located in Dripping Springs, and its parent company Heaven Hill, which is a Kentucky-based liquor company that purchased Deep Eddy in 2015.
The project was a joint effort between the EDC, the city and Hays County, according to a city of Buda press release.
While incentive agreements have been approved by Buda and the EDC, the project is contingent on continued negotiations with the current building owner and an incentive agreement with Hays County being adopted.
The Buda EDC is currently working with the Greater San Marcos Partnership on the Hays County Chapter 380 agreement, which should be discussed in early October.
“When the Buda Economic Development Corporation started working with the company on this project almost seven months ago, our primary concern was assisting Deep Eddy in their search for a facility that could meet their current and future production demands,” EDC Director Ann Miller said in a statement.
Deep Eddy approached Buda citing growth limitations at its current facility in Dripping Springs, according to the release.
The company will move its operations to an existing building located at 150 Precision Drive, which has been vacant for roughly two years. The building is more than 194,000 square feet and sits on 15-plus acres of land.
Deep Eddy’s new facility is at least five times the size of their current building. The facility is located in the Monarch certificate of convenience and necessity (CCN) and the project will use approximately the same amount of water as 36 single family households monthly.
“We are honored that Buda was chosen as their location for their expansion and we are looking forward to continuing to build on the partnership we’ve established between Deep Eddy, its parent company Heaven Hill, the City of Buda, and the Buda Economic Development Corporation. This project brings new revenue, jobs, and excitement to our community and this company will be a great addition to the growing Buda economy for years to come,” Miller said.
Deep Eddy, known for its flavored alcoholic spirits, will retain all existing jobs, which is approximately 40 positions. The company plans to add at least 20 new jobs over the next ten years.
“We are looking forward to working with Deep Eddy Vodka and its parent company Heaven Hill. This project is truly a reflection of the team work between our EDC, City Council, and Hays County Commissioners,” said City Manager Kenneth Williams. “I’m thrilled that Deep Eddy will remain in Hays County and that all existing jobs will be retained. The company is a welcome addition to the City of Buda.”
For Mayor Todd Ruge, the goal was always to keep Deep Eddy in Hays County.
“Today’s announcement reflects a collaborative effort between our EDC, City Council, and County Commissioners to insure that Deep Eddy remained in Hays County,” said Ruge. “I couldn’t be happier that Deep Eddy has chosen Buda for its new expanded facility. This is a victory for the City of Buda and Hays County.”
Capital investment during Deep Eddy’s first year of operation at its new location will range from $12.5 to $17 million. Incentives include a 40 percent rebate on city property taxes paid on the new net value of taxable property, estimated at $80,000.
The EDC is providing $400,000 in cash incentives to the project. That includes $265,000 to assist with building upgrades and improvements, $110,000 for construction of a water line that will serve the project and adjacent properties, and a $25,000 cash incentive if the company opens a tasting room facility in Buda.
Current plans are for the tasting room to remain at its current location with the production operations relocating to Buda.
The cash incentive, excluding the waterline, has a 16.9% rate of return. The cost of the waterline will be recouped by the development of CHiP Semiconductor’s facility being constructed on South Loop 4 and will have a 22.9% rate of return from phase 1 of that project.
The direct new tax revenue impact of the project, without a tasting room, is estimated at $690,000 over 10 years to the City of Buda.
The majority of the tax revenue impact is generated through property taxes paid to the City of Buda. Factoring in the property tax rebate and the cost of government services over the next ten years, this generates a net positive impact of $545,000 in new revenue.
The significant increase in property tax values will have an impact on Hays County, Hays CISD, Emergency Service District (ESD) No. 2, No. 8, and Austin Community College’s revenues as
well, according to the release.
It’s estimated Hays CISD will see a positive net impact of over $700,000 in additional revenue over the next ten years from the project.
“The entire City staff with whom we have worked has been very accommodating and supportive in this process. Heaven Hill Brands and its Deep Eddy Vodka Division are excited about the opportunity to become a part of the Buda community,” said Len Landry, Director of Corporate Engineering.?
The company expects to begin full production at its new location in early 2017. Renovations on the building will start later this year.