Staff report
A vacant building in Buda is where Austin-born Deep Eddy Vodka, which is currently located in Dripping Springs, plans to relocate its 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 among 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.
EDC Director Ann Miller said in a statement the EDC began working with Deep Eddy roughly seven months ago. According to the release, Deep Eddy approached the city citing growth limitations at its current facility.
Deep Eddy’s primary concern was the search for a facility “that could meet its current and future production demands,” Miller said.
The company will move its operations to an existing building at 150 Precision Drive, which has been vacant for two years. The building is more than 194,000 square feet, which is five times the size of Deep Eddy’s current building, and sits on 15-plus acres of land.
Deep Eddy 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.
“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.
Buda Mayor Todd Ruge said in a statement the goal was to keep Deep Eddy in Hays County, which was a collaborative effort among the EDC, city council and Hays County Commissioners. Ruge said Round Rock had been a prospective location for Deep Eddy's relocation.
“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,” Ruge said.
Incentives for Deep Eddy include a 40% rebate on city property taxes paid on the new net value of taxable property, estimated at $80,000. Capital investment during Deep Eddy’s first year of operation at its new location will range from $12.5 to $17 million.
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 the City of Buda.
Current plans are for the tasting room to remain at its current location with the production operations relocating to Buda.
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 10 years, this generates a net positive impact of $545,000 in new revenue.
Significant increases in property tax values will have an impact on Hays County, Hays CISD, Emergency Service District No. 2, No. 8, and Austin Community College’s revenues as well.
It’s estimated Hays CISD will see a positive net impact of over $700,000 in additional revenue over the next 10 years from the project, according to the release.
“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.
