City, county and school district officials this week are expected to make a recommendation on whether Prosoco Inc. should get a 55 percent, 10-year tax abatement for a $2.5 million expansion project at East Hills Business Park.

It’s the first test of the city’s new tax abatement policy, which was put in place earlier this year.

The city’s new Public Incentives Review Committee is scheduled to meet at 4 p.m. Thursday at City Hall to study a Kansas University report showing the company’s request exceeds the minimum cost-to-benefit requirements.

The seven-member committee is composed of representatives from the city, county, school district, Lawrence-Douglas County Economic Development Board and two members of the public.

Prosoco, a Lawrence manufacturer of masonry and concrete cleaning solutions, announced earlier this year its plans to build a 55,000-square-foot warehouse addition at its manufacturing and corporate headquarters facility at 3741 Greenway Circle.

The expansion would add eight jobs to the company, which employs about 80 people.

City officials commissioned a cost-to-benefit report from KU’s Policy Research Institute to determine whether the project would create more benefits than costs for the community.

The report estimates the project, after the abatement is granted, would provide $2.01 in benefits for every $1 in costs to the community. The city’s new abatement policy requires a project seeking an abatement to produce at least $1.25 in benefits for every $1 in costs. Without the abatement, the Prosoco project would provide $2.97 in benefits for every $1 in community costs.

The report looks at benefits such as increased sales tax and property tax revenues generated by the company and its new employees, and increased state funding for any new school children added to the district as a result. It also looks at costs such as funds needed for new infrastructure and city and school district services that would have to be provided.

The new policy also requires each company seeking an abatement to pay its new employees a wage that meets or exceeds the average wage for similar positions in the community, as determined by an annual wage survey produced by the Kansas Department of Human Resources.

Prosoco officials said the expansion was expected to create seven production positions that would pay between $10 and $15 an hour. That is above the average wage of $8.61 per hour for production workers in Lawrence, according to the KDHR survey.

The expansion also would create one field technician position that would pay $12.50 an hour. City officials could not find any state data showing an average wage for a similar position.

If granted the abatement, the company would save about $31,000 a year in local property taxes, under current property tax rates.

Prosoco is the first company to apply for a tax abatement under the city’s new policy. City commissioners are scheduled to consider the committee’s recommendation at their Nov. 5 meeting.