Oklahoma's low cost of doing business is getting the attention of companies from other states, the state's bond adviser said Thursday.
Jobs are being added in Oklahoma as companies transfer operations from Iowa and California to facilities in Enid and Tulsa. The companies involved are using a state loan program to help finance the deals.
“We're starting to see more businesses come in recognizing the benefits of a good labor pool, inexpensive land, low cost of operations,” said Jim Joseph, the state's bond adviser. “You put those things together and it's a pretty good business environment.”
The state Council of Bond Oversight approved two financial deals Thursday of $3 million each that would help expand Oklahoma facilities.
Each expansion project should mean an additional 50 jobs.
One approval authorizes the Oklahoma Development Finance Authority to issue a revenue note, or loan, for Lufthansa Technik Component Services to expand an existing facility in Tulsa, said Michael Davis, president of the Oklahoma Industrial Finance Authority.
The company is one of six business units within Lufthansa Technik, a leading manufacturer and independent provider of maintenance, repair and overhaul services for civilian aircraft.
Lufthansa Technik announced late last year the consolidation of its North American component capabilities, which included transferring its operations of Hawker Pacific Aerospace in Sun Valley, Calif., to Lufthansa Technik Component Services in Tulsa.
Lufthansa Technik Component Services is planning a $19.8 million expansion in Tulsa to accommodate the transfer. It should result in the addition of 51 jobs in about five years, with an average salary of about $70,000 per year. The company now has about 65 employees in Tulsa.
The other deal involves Advance Pierre Foods, which was started in Enid as Advance Foods and is based in Cincinnati after a couple of mergers. Advance is planning a $12.9 million expansion at two of its production plants in Enid. Plans are to close an Orange City, Iowa, plant and relocate operations to Enid, Davis said.
The expansion will include building renovations and equipment upgrades which will result in an additional 50 jobs in about five years. Advance has about 780 workers at its Enterprise and 59th Street plants.
The note agreements with both Lufthansa and Advance will have a 2 percent fixed rate of interest, according to papers provided to Council of Bond Oversight members.
Each agreement is for $3 million.
The financial arrangement is through a state program that allows the company's employee withholding taxes to be collected by the Oklahoma Tax Commission and placed in a special account.
That money will be transferred to the Oklahoma Finance Development Authority and will be used to pay the debt service on the notes.
The arrangement was established in a 2002 law; it was reviewed and upheld in 2004 by the state Supreme Court.
Money for the expansion comes from a program that was allowed to award $100 million for various economic development projects.
It has awarded or committed about $57 million so far, Davis said, which includes $20 million approved two years ago for the Goodyear plant in Lawton.
The revenue notes are considered to be special obligations of the Oklahoma Development Finance Authority and are not construed to be an obligation of the state.