There’s not much to smile about in the City of Kyle, let alone the rest of Hays County, as word that SmileDirectClub Inc. plans to cancel the opening of its $37 million manufacturing plant in Kyle.
“They took a companywide pause,” said Jason Giulietti, executive director of the Greater San Marcos Partnership. “COVID hit them hard and what we saw was sort of a domino effect. They have a bunch of ‘smile stores’ around the state, around the country. Those are where you go in and get serviced for your orthodontic needs. As those started to close that obviously limited their demand for the product, which subsequently impacted their manufacturing. Their manufacturing is what was coming to Kyle and was also coming to Tennessee. It was their first foray into growing their manufacturing capabilities.”
Giulietti said it was a direct impact of COVID and the business model SmileDirectClub had and that the company has subsequently furloughed more than 50% of its workforce, which was sizable.
The City of Kyle received a courtesy call from a SmileDirectClub attorney in July regarding changes to its plans to expand to Texas.
In a statement issued by the City of Kyle Mayor Travis Mitchell said the City of Kyle will be OK despite the news.
“Losing SmileDirectClub is unfortunate, but the economic outlook of Kyle remains strong,” Mitchell said. “We remain a city with a thriving office and industrial district, and companies are showing interest in our city from all over America.”
The company originally announced in October 2019 to invest at least $36 million in a manufacturing facility in Kyle's Hays Logistics Center located at Interstate 35 and CR 210. The investment would have created an estimated 850 jobs. In return, SmileDirectClub was set to receive a $2.2 million grant from the State-funded Texas Enterprise Fund and would have also been eligible to receive city and county incentives, totaling $3.3 million. No tax dollars were lost because of SmileDirectClub’s decision.
SmileDirectClub was expected to open its Kyle facility in February, but the buildout of the space was never completed, and workers never moved in. The 150,000-square-foot facility at the Hays Logistics Center that was being leased by the company is now back on the market.
Giulietti said he hopes the company can endure the hardship and one day return to business.
“I think they're optimistic that they're going to recover,” Giulietti added. “They certainly provide a very cost-effective product in a marketplace that's pretty expensive. So, I do think there's some chance of this coming back in the future. But right now, I think it's just the company going through what many others are with COVID.”
