Louisiana Spirits, who manufactures Bayou Rum, agreed Thursday to pay the Jeff Davis Parish School Board $4,500 for violating its 2020 contract under the Louisiana Industrial Tax Exemption Program (ITEP).

The ITEP program offers tax incentives, including an 80 percent property tax abatement, to manufacturers who make commitments to create jobs and payroll in the state.

Consultant Robert Wege said Louisiana Spirits applied to the state for the tax break promising three jobs worth $30,000 each, but failed to meet the target at its Lacassine facility in 2020 due to the COVID-19 pandemic and two hurricanes.

“Essentially we helped them apply for the ITEP program, the property tax abatement, and there’s a new job requirement with that incentive,” Wege said. “Per the application we had listed three net new jobs that the entity would create over the first few years of the contract. Louisiana Spirits was well on track to meet those jobs however with COVID and the hurricanes in 2020 their head counts and their business suffered. They had over $900,000 in property damage.”

Wege said the slowdown also affected the facility’s visitor count.

“Not being able to do tours, the reduction in number of visitors that could tour the facility and the property damage that they sustained set them back significantly in their headcount numbers,” he said.

Wege said over 20,000 visitors tour the Lacassine facility annually with 60 percent of those visitors buying items from the Bayou Rum retail store amounting to over $1.5 million in retail purchases.

Wege said the company realizes it failed to meet its obligations, but looks forward to resolving any issues the non-compliance may have caused the board.

“We set the mark and said that we were going to create these three jobs whether it is COVID or the hurricane, if you look at it, we didn’t meet the limit that we set,” Wege said.

Wege proposed the company pay the tax due as penalty for the lack of jobs in 2020.

The company had promised to maintain 18 jobs and create three net jobs, Wege said. By the end of 2021 they had maintained that 18 and created nine new jobs and are on a path to continue to grow, he said

The company added a new product line in 2021 and started three 24 hour, 10-person shifts at the facility increasing its jobs to 27 employees by Dec. 31, 2021. Wege said. It is currently looking at future capital investment anticipated with a new product line along with other possible changes and growth opportunities at the facility, he said.

“We understand that we missed this mark and the board has already acted upon that,” Wege said. “We are here to say the company is here and continues to make an investment in their operations and employees.”

Superintendent Kirk Credeur said the company had originally asked for an exemption for the 2020 year. The board had some discussion and decided not to provide the exemption.

“At the end of the day we went to the Louisiana Economic Development and went to a hearing and they favored Bayou Rum for 80 percent exemption at that time,” Credeur said. “Because of the storms they have had difficulty meeting those requirements.”

The company will avoid a hearing before the state Board of Commerce and Industry if the payment is made by Feb. 23.

“They’re here willing to negotiate with us now and we’re probably not going to be looked at favorably so they could probably walk away without owing us anything,” Credeur said of the Feb. 23 hearing,

The School Board asked the state Board of Commerce and Industry to repeal the company’s 2020 ITEP exemption last November and asked the company to pay taxes that were previously exempt due to non-compliance.

The tax breaks were used to help offset the cost of a $4.5 million expansion of the company’s manufacturing process, which opened in 2013 in Lacassine.