On hold: Katerra delays San Marcos project due to current business environment

Katerra is putting its San Marcos factory project on an indefinite hold, the company confirmed to the Daily Record on Wednesday. 

Katerra, a manufacturing company based in Menlo Park, California, announced in October 2019 that it would relocate an automated building component manufacturing and distribution facility to the Whisper development located at Yarrington Road and Harris Hill after previously coming to an agreement with the City of San Marcos to set up at the SMART (San Marcos Air Rail Truck) Terminal. 

Katerra Head of Manufacturing Matt Ryan informed city and Hays County leaders of its plan to place its project on a hold due to issues stemming from COVID-19. 

“Katerra is disappointed to announce that due to the unprecedented impacts on the overall business environment from the COVID-19 pandemic, we are indefinitely pausing our plans for a new factory at the Whisper site in San Marcos,” Ryan said. “We greatly appreciate the support and strong spirit of partnership we received from the Greater San Marcos Partnership, the City of San Marcos and Hays County.”

Greater San Marcos Partnership President Jason Giulietti said COVID-19 is having a negative impact on the country and companies like Katerra are having to make temporary modifications to their business plans to make it through the pandemic. 

“Even with the current downturn, the Greater San Marcos Partnership is still seeing strong activity from firms looking to expand to our region because of our talented workforce and quality of life,” Giulietti said. “The Greater San Marcos Partnership continues to provide assistance to companies already located in the region as well as those wanting to expand here.” 

The City of San Marcos and Hays County both passed economic development agreements with Katerra to relocate to the Whisper location. 

The Hays County Commissioners Court voted unanimously to execute a Chapter 381 economic development incentive agreement between Hays County and Katerra Construction, LLC during its Oct. 1, 2019 meeting.

The performance-based incentive agreement would’ve generated nearly $2 million in new tax revenue for the county. 

The San Marcos City Council approved a Chapter 380 economic incentive agreement with the company that would've provide incentives over 10 years in the form of annual refunds of a portion of new property taxes generated from the facility on Nov. 5, 2019. 

Ryan said Katerra will decide in the future on how and in what way the company can move forward with the San Marcos project.