Archive for Tuesday, October 3, 2000

American Eagle site OK’d

Ottawa city, Franklin County officials back abatements

October 3, 2000

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— Turning away from months of negotiations with Lawrence officials, American Eagle Outfitters came here Monday seeking 10 years of tax breaks on a planned distribution center.

Officials wasted no time signaling their interest in the company's planned $10 million center. City commissioners approved a "resolution of intent" to grant the abatements and scheduled a public hearing on the matter for 7 p.m. Wednesday.

County commissioners attending the city meeting were so eager to say "yes" to American Eagle's request that they stepped outside the city hall meeting room into a hallway and unanimously approved the tax breaks sought by the clothing company. That vote came while city commissioners continued their own meeting.

The county clerk later said the hasty vote was legal because county commissioners technically were still in session from an earlier county commission meeting. A crowd of American Eagle officials, reporters and others were in the hallway. But commissioners took fewer than five minutes to cast their votes without public comment or discernible discussion.

Open June 1

Michael Fostyk, an American Eagle vice president, and the firm's attorney, Mark Andersen of Lawrence, gave city commissioners a few details about the company and its aims for an Ottawa center.

"We would like to be open for business June 1," Fostyk said. "The nice thing about the (existing) facility here is it is 280,000 square feet, which fits the basic footprint. We want to add 100,000 square feet, but it doesn't have to be complete by June 1. That's more first- or second-year plans."

American Eagle's surprise move to Ottawa came after months of negotiations aimed at building a $45 million Lawrence warehouse on farmland east of the city. In Lawrence, it received approval of a 10-year, 80 percent abatement of taxes.

The company asked Ottawa and Franklin County officials for a 50 percent abatement on its purchase of the vacant Our Own Hardware building. The building will become the company's second major distribution center serving the western United States, creating 200 full-time and 100 part-time jobs.

American Eagle asked for a 100 percent abatement for a 100,000 square feet addition the company plans to build for a warehouse.

The city commission unanimously approved the resolution of intent to grant the abatements. It will consider the issue again Oct. 16 and take final action Oct. 18.

'No comment'

"We are always looking for jobs and good paying jobs," Ottawa Mayor Richard Jackson said. "We will do everything we can to make it happen."

In addition to the county commission's vote, Ottawa School Board President Rex Cummings conveyed the school board's support for the American Eagle project.

After meeting with the commission, Fostyk declined to comment on several aspects of the change in plans to move to Ottawa.

He said "no comment" to questions on the cost to American Eagle to take over and renovate the Our Own Hardware building, which had been listed for sale at $6.5 million.

According to the company's Sept. 26 abatement application, it will pay $5 million for the existing building and another $5 million for renovations, equipment and construction of the addition. That's $35 million less the company expected to spend in Lawrence.

Fostyk also declined to say why the company decided against proceeding with plans to build in Lawrence.

Asked if the company had any remaining legal obligations to the city of Lawrence, Fostyk said, "No comment and no comment to the next three questions."

Land rezoned

David Corliss, Lawrence's assistant city manager and legal services director, said the city passed a resolution of intent to issue the tax abatements once the facility was built. Because American Eagle is not coming to Lawrence, Corliss said the "issue is inoperative."

The property will remain annexed into the city and rezoned for industrial purposes, he said.

Fostyk promised to answer questions about the company's change in plans on his next trip to Kansas from company headquarters in Warrendale, Pa.

Jeff Mourning of Ottawa/Franklin County Economic Development introduced Fostyk and Andersen to the commission and other officials.

"To a small-town Kansas banker, this is a great opportunity. You don't have a lot of businesses come to the community with financial statements like this," Mourning said. "They got in touch with us after they found out about the building in the last couple of weeks. We weren't trying to market American Eagle. It's nice they chose us because the building there is available."

Andersen said that if the tax breaks were approved, American Eagle would want to move to Ottawa as quickly as possible.

"They are ready to write contracts," he said. "They have hired the architects."

- Staff writer Joy Ludwig contributed to this story.

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