Over two-and-a-half years after Walmart Inc. was granted a 10-year abatement that could save the company about $4 million in taxes, the retail giant is asking Dallas County commissioners to revisit their agreement.
“Wal-Mart has requested that the required increase in value for the first year, 2024, be lowered from $250 million to $180 million,” according to a briefing within an agenda for a forthcoming Dallas County Commissioners Court meeting.
While the Bentonville, Arkansas-based company seeks a shift in its value condition for its first year, Walmart maintains it will still be able to hit the rest of its performance-related conditions laid out in the original agreement, which was formerly dubbed the incognito code name of the “Project Peak Tax Abatement Agreement.” Those conditions include bringing on 250 full-time employees with average salaries of $42,000 by 2026.
Commissioners approved the abatement in March 2021 with Walmart committing to build a cold storage and perishable distribution warehouse in Lancaster — a project originally intended to increase Dallas County’s tax base by $250 million by January 1, 2024.
“Since the 2021 abatement was granted, Wal-Mart has worked to construct the facility and bring in for installation much of the cold-storage equipment to be fully operational,” the county document states. “The abatement stipulated several conditions to receive and maintain the 10-year abatement that would start January 1, 2024.”
Walmart states that supply chain delays and difficulties installing and inspecting the facility’s specialized refrigeration equipment have made it so that it cannot achieve its projected goal of hitting an appraised value increase of $250 million in the first year of the agreement.
Commissioners are scheduled to consider amending the agreement on December 5. It is recommended for approval.
Such an amendment would lower the first-year value to $180 million, resulting in the county losing out on roughly $48,000 in tax revenue.
Walmart “would not receive the original 70% abatement stipulated in the agreement unless the existing abatement conditions, including the $250 million value condition, are met starting in 2025 and onward,” the briefing states.
Walmart officials have told the county the project is “currently substantially complete” and that it expects the remaining equipment will be installed early next year, pushing the company beyond the $250 million appraised value required for the duration of the abatement.
“Not acting on the abatement modification would cause Wal-Mart to be out of compliance with the original agreement and result in no incentives over the 10-year original agreement period,” the briefing says. “This is estimated to be $398,906 annually.”
Over 10 years, that is just shy of $4 million.
As previously reported by The Dallas Express, another Walmart facility in Lancaster has already opened. The next-generation fulfillment center on Belt Line Road, 15 miles south of Dallas, is expected to create 1,000 jobs, including “tech-focused” positions.