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The Ellis County Commissioners Court unanimously approved a tax abatement agreement for the Midlothian-based Gerdau steel plant to upgrade and expand its operations during its May 3 meeting.

The project will modernize the plant’s operations and construct a new facility that will allow Gerdau to heat treat round steel bars.

Equipment from a similar facility Gerdau operated in Saint Paul, Minnesota, will be transferred to the Midlothian plant and upgraded from induction heating to gas heating. Four out of the five projects will increase the plant’s melting capacity, with Gerdau making a total investment of about $300 million. The plant, located at 300 Ward Road, was founded in 1975 as Chaparral Steel.

The tax abatement is 45% on real and personal property over $135,800,028 for a period of 10 years. The agreement requires Gerdau to maintain 900 employees, not including contractors, on the payroll. Currently, Gerdau has 1,010 employees.

Other conditions include construction of the heat treatment facility by Dec. 31, 2023. The existing steel mill’s modernizations are to be completed by Dec. 31, 2026. The Midlothian City Council approved a tax abatement with Gerdau on Feb. 2.

Kyle Kinateder, Midlothian Economic Development Corporation president and CEO, told commissioners it’s “a great project” for the community.

“This is ultimately an opportunity to partner so that the community as a whole and the company can mutually benefit,” Kinateder said. “We have structured this agreement the same as the other agreements we have brought forward. The key to those agreements is a very clear understanding of how we as a community benefit from these agreements. We have brought forward an agreement that matches that same style.”

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