DST Systems Inc.'s application for more than $200,000 in tax breaks would pay off for local governments, according to an analysis conducted for city officials.
Today, the city's Administrative Review Committee will discuss the tax-break request from DST, which takes ownership Friday of Sallie Mae's loan-serving center at 2000 Bluffs Drive.
If granted, the tax breaks on property and equipment would last for five to 10 years and save DST $209,804, according to the study by Kansas University's Policy Research Institute.
Overall, the study said, the deal would have a benefit-cost ratio of 1.05 to 1 for the city, Douglas County and Lawrence school district. The ratio weighs sales taxes, franchise fees, property taxes and other revenues generated by the business against the costs of streets, utilities, public services and education.
The Kansas City, Mo.-based company wants the city to issue $8.95 million in tax-exempt industrial revenue bonds to finance the project. In all, DST plans to have 350 workers at the building, which could be expanded to handle as many as 1,000 workers in future years.
Elaine Nelson, vice president for Sallie Mae's servicing operations in Kansas, said the sale of the building represented an ideal ending to a difficult situation. Earlier this year Sallie Mae decided to shift the center's operations to Indianapolis, which was to put 300 Sallie Mae employees out of work by Friday.
But Sallie Mae's decision to close solidified DST's interest in coming to Lawrence. In addition to buying Sallie Mae's building, 7.2-acre lot and computers, DST already has hired more than 150 of the center's workers.
"People were very pleased with the DST offers," said Nelson, who is resigning from Sallie Mae, did not accept a job with DST and plans to remain in Lawrence with her husband, a retired police officer. "They were pleased to be able to stay and not hit the streets for a job search. It's a wonderful thing."
According to the KU analysis, DST employees in Lawrence will earn an average salary of $39,664.