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Archive for Saturday, March 31, 2001

Distributor eyes tax break

Classic Eagle’s request may be dawn of new battle

March 31, 2001

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A Lawrence distributor of Anheuser-Busch products is poised to ask the city for a tax abatement to build a new $2.7 million distribution center at East Hills Business Park.

The proposal appears just as a task force is examining the city's use of abatements, and as the topic has emerged as one of the primary issues in the campaign for Tuesday's city commission election.

Classic Eagle Distributing LLC, 801 E. Ninth St., says it needs more space to keep up with its growth.

"We have run out of office, operating and storage space," the company said in its abatement application. "Our Lawrence location is landlocked with no expansion capability. We need to build a facility that is up to industry standards which will allow for a state-of-the-art environment."

The application was to appear before the Lawrence City Commission at its Tuesday meeting. But officials pulled it from the agenda Friday afternoon, saying it had been scheduled prematurely.

"Nothing has been decided at this point," Classic Eagle co-owner Kirk Lambright said in a press release. ""We are not prepared at this time to proceed with the request."

In the application, Classic Eagle said it intends to build a 57,000-square-foot facility at the industrial park to replace its current 37,000-square-foot home. It also intends to buy $1.6 million in new equipment, mainly new vehicles to transport the company's products.

Expansion would lead to the creation of 12 new jobs, the company said, with an annual pay range of $22,000 to $44,000. Classic Eagle employs about three dozen people.

The company wants to finance construction with $3 million of city-issued industrial revenue bonds. Under state law, projects financed through such bonds are exempt from property taxes. City policy would require the company to pay a portion, probably 50 percent, of the exempted taxes.

After abatement, the company said in its application, the payments would be about $40,000 a year. It pays about $37,000 a year on its existing facility.

Lambright said Classic Eagle wants to see the results of an independent cost-benefit analysis of the proposal before formally submitting the application.

Two proposed abatements to new companies received opposition last year. Tim Holverson, director of governmental affairs for the Lawrence Chamber of Commerce, predicted a better reception for Classic Eagle a local business already known by the city.

"I think it's an ideal use of tax abatement," he said. "They're looking to make a major capital investment in the community and they're saying they want the community to be partners in the process."

Two candidates who have been critical of the way the city handles tax abatements, David Dunfield and Adam Mansfield, declined comment, citing the early stages of the process.

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