Aug

17

Another taxpayer-subsidized business goes bankrupt

August 17, 2006 | 6 Comments

The Biz Journal reports that family-owned Weld Wheel has filed for bankruptcy and plans to sell of its assets.  There is a mention of possibly continuing under new owners, but no specifics. The company recently received $3 million in tax subsidies to move from the West Bottoms to the stadium area, so we wonder if that agreement gives the city standing before the bankruptcy court to get our $3 million back.

So now Weld joins companies like Farmland and Aquila that have gone tits up shortly after receiving big tax breaks.  Perhaps the city should widen its evaluation tax break proposals to consider not just the development project but also the health of business itself.

Categories: Business


Comments

6 Comments so far

  1. hajkar on August 17, 2006 6:35 pm

    I guess those P Diddy wheels were a bust.

  2. Mark Forsythe on August 18, 2006 9:45 am

    There were some clawback stipulations regarding the property and sales tax abatement tied to employment goals and whether the company remained on the site. However, I’m going to guess nobody foresaw the possibility of bankruptcy and acquisition by another firm.

    This was an LCRA deal so the specifics aren’t available online. You have to go down to their offices and pull the files yourself.

    It will be up to the bankruptcy court to sort it out but I’m fairly confident American Racing Products factored in the value of 20 years of property tax abatements into their bid.

  3. Chris Dowell on August 27, 2006 11:44 pm

    Ford announced that their sales are down over 50%. It would make sence that an accessory company would be having a difficult time. Does anyone from the city do their research?

  4. Chris on August 29, 2006 6:53 am

    Wow. A business that isn’t performing well is given money by the government and it still doesn’t perform well. Are we this stupid?

  5. Jason Brown on December 17, 2007 4:01 pm

    Another tax break anyone?

  6. Chris Dowell on December 17, 2007 4:10 pm

    Lets give them another tax break to keep them from going into bankruptcy.

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