The Enid News and Eagle, Enid, OK

October 6, 2012

Local firm given incentive to keep creating jobs

By James Neal, Staff Writer
Enid News and Eagle

ENID, Okla. — An Enid manufacturer has been awarded a state incentive package worth as much as $1.49 million to create and sustain 100 jobs.

Pelagic Tank LLC, a company opened in Enid this year to manufacture tanks for the oil and gas industry, was awarded the Quality Jobs Program incentive this week by Oklahoma Department of Commerce.

The Quality Jobs Program gives eligible companies, predominantly in the manufacturing sector, rebates worth up to five percent of their state payroll taxes for up to 10 years.

Don Hackler, Oklahoma Department of Commerce communications officer, said companies enrolled in the Quality Jobs Program have to meet strict contractual guidelines.

To be eligible, a company must pay its workers at least 110 percent of the county average wage, provide workers with basic health insurance coverage and pay at least 50 percent of health benefits, and 80 percent of the company’s employees must work at least 30 hours per week.

Hackler said for Pelagic Tank to remain in the Quality Jobs Program, the company must achieve a $2.5 million taxable payroll within the first three years. If the company sustains that payroll level or more, it can remain in the program an additional seven years, and earn up to the full amount of $1,490,496 in payroll tax rebates.

Pelagic Tank partner and quality control manager Glen Snapp said the Quality Jobs Program, paired with local incentives and the help of Enid development specialists, was instrumental in bringing the manufacturing company to Enid.

Before opening the new manufacturing site in Enid, Snapp was operating a much smaller fabrication shop in Hennessey.

He was approached last November by a group of investors who wanted to locate a manufacturing business near the Mississippian Lime play to support the burgeoning oil and gas industry.

“I had worked with several of the investors for a few years, and they saw an opportunity that was coming about up here with the Mississippian Lime play,” Snapp said. “We decided we wanted to start a company to fill that need.”

It didn’t take long for Snapp and the investors to decide his existing fabrication shop in Hennessey would not be large enough to support the new venture.

“We decided we were going to have to start looking for a much larger facility, and hopefully something already standing, so we could begin production as soon as possible,” Snapp said.

The fledgling company found a possible solution in the 54,000 square-foot building at 301 S. 54th in Enid, formerly occupied by Chesterfield Cylinder.

Snapp said Enid Regional Development Alliance Exec-utive Director Brent Kisling helped connect Pelagic Tank with the building, the Quality Jobs Program and some local incentives to seal the deal.

ERDA put together an incentive package of $180,000 to offset some of the initial work on the building to get it ready for Pelagic.

ERDA also worked with Pelagic Tank and Oklahoma Manufacturing Alliance to enroll the new company in the Quality Jobs Program.

“The mission of the Enid Regional Development Alliance is to assist entrepreneurs, existing businesses and new businesses who want to come to Enid,” Kisling said, “and one of the best ways we can assist a new business coming to town is to connect them with the resources available through the state of Oklahoma.”

Kisling said helping companies like Pelagic Tank makes the difference between bringing good jobs to Enid and sending those jobs elsewhere.

“The oil and gas boom isn’t just about service companies; it’s also about manufacturing,” Kisling said. “That manufacturing that Pelagic Tank is doing could have happened in Enid, or it could have happened in a number of communities in Oklahoma or Kansas.

“Thankfully, with the Quality Jobs Program and the ERDA incentive package, we were able to offset some of their start-up costs and give them some incentive to locate in Enid.”

Start-up costs were considerable when Pelagic Tank moved into the old Chesterfield building, which had not been consistently used since the 1980s. Snapp said the building’s electrical wiring and plumbing had to be completely replaced before manufacturing work could begin.

Still, the company went from accepting the keys to the building on Jan. 1 to completing renovations, moving in and turning out their first tank on Mar. 30.

“It was a pretty wild and crazy time,” Snapp said.

Things have not slowed down since.

The company opened with 10 employees, and has since increased its workforce to 50. Snapp said he plans to add another 50 jobs over the next three years.

Manufacturing capacity also continues to grow.

Snapp said when the plant opened in January, Pelagic Tank was sub-contracting its metal rolling and plasma cutting. Those tasks have since been moved “in-house,” and the company still is adding new equipment.

“We have been real fortunate that the demand for our product is high,” Snapp said. “We’re kind of riding the wave right now.”

Snapp said organizations like ERDA, Oklahoma Manufactur-ing Alliance and the James W. Strate Center for Business Development at Autry Techno-logy Center were instrumental in getting Pelagic Tank started in Enid.

Snapp also credited Autry Technology Center with helping build Pelagic Tank’s workforce. He said the school added to its welding program curriculum to support Pelagic Tank’s needs, and more than half of the employees at Pelagic Tank now have been trained by Autry Tech.

“All of those people together really helped bring us here and helped get this thing off the ground,” Snapp said.

As for the Quality Jobs Program, Snapp said it will help Pelagic Tank continue to hire and retain good workers, and compensate them with quality wages and benefits.

“It’s an incentive for us to hire better, higher-paid workers,” Snapp said, “and to provide them with more benefits.”