Mobile County officials are considering whether to add another sales tax abatement to the incentive package already offered to Kimberly-Clark, as the paper products giant pushes forward with a major expansion of its tissue mill in Mobile.
The request, brought before the Mobile County Commission, asks the county to match a one-year sales and use tax abatement the city of Mobile has already approved for the project. If granted, the addition would bring the total public incentive package tied to the expansion to more than $4 million spread over the next decade.
Kimberly-Clark’s Mobile facility manufactures a range of well-known household paper products, including Scott, Cottonelle, Kleenex, Kotex and Huggies brands, and currently employs more than 600 workers at the site. The company announced earlier this year that it plans to build a $75 million on-site combined heat-power plant at the mill, part of a broader $110 million capital investment planned for the facility over the next two years.
The remaining $35 million of that investment is earmarked for new machinery used to produce toilet tissue, along with a new assembly line. Local officials say the additions are expected to create between 17 and 21 new jobs at the plant, with average annual salaries for the positions listed at $88,235.
To help secure the project, the Industrial Development Board, which oversees economic development agreements within the city of Mobile, approved roughly $1.4 million in incentives earlier this year. That package includes $350,000 that will accumulate over a 10-year abatement of non-educational ad valorem taxes, along with a one-year, $1.1 million abatement of sales and use taxes tied to construction of the new facilities.
Mobile County’s Industrial Development Authority, which handles similar agreements on behalf of the county, has already approved a separate $1,025,000 property tax abatement spanning 10 years. The new request under consideration by the County Commission would tack on an additional $750,000 sales tax abatement, a contribution slightly larger than the one already granted by the city.
Combined with a limited contribution from the state of Alabama, the full incentive package offered to Kimberly-Clark for the expansion is now valued at roughly $4,175,000 over 10 years, in exchange for the creation of 17 direct jobs at the mill.
According to an analysis prepared by the Mobile Area Chamber of Commerce, the expansion project is projected to generate a combined tax benefit of about $4.6 million for the city and county, even after accounting for the cost of the abatements themselves.
Chamber representative Shelby Glover presented the county’s proposal to commissioners, walking through the scope of the investment and the projected return for local governments. Commissioners raised a handful of questions about the terms of the deal but did not voice objections to the additional allocation.
Economic development officials in Mobile have increasingly leaned on abatement packages to compete for industrial expansions, arguing that the long-term tax revenue and stable manufacturing jobs generated by projects like the Kimberly-Clark expansion outweigh the short-term cost of the incentives. The mill has been a fixture of Mobile’s industrial base for decades, and local leaders have pointed to the current expansion as evidence that the facility remains competitive within the company’s broader manufacturing network.
A final vote on the county’s additional sales tax abatement is expected as the commission continues to review the terms of the agreement.