If any company is worthy of an 80 percent tax abatement from the city, Serologicals seems to be the one.
The glowing cost-benefit report received by Lawrence city officials Friday seems to leave little doubt that a sizable tax abatement for a proposed biotechnology plant in the East Hills Business Park is a good deal for the city.
Serologicals Corp. of Atlanta has submitted an application for a 10-year, 80 percent abatement on about $26 million in taxes on property and equipment. The city's Public Incentives Review Committee is scheduled to discuss the abatement request Thursday in preparation for making a recommendation to Lawrence city commissioners.
Among the documents the committee will review is a cost-benefit analysis prepared by the Policy Research Institute at Kansas University. The results of the analysis border on stunning. Among the target objectives the city has set for new and expanding businesses is a combined (city, county, school district) cost-benefit ratio of 1:1.25 or better over a 15-year period.
The KU analysis puts Serologicals' cost-benefit ratio at 1:5.92.
Obviously, the requested abatement constitutes a significant investment by the city, but the cost-benefit analysis reflects Serologicals' significant investment in Lawrence. The firm plans to build a new 43,000-square-foot building on 12.5 acres in East Hills. Including equipment, that's an investment of $25.7 million.
Upon completion, Serologicals will employ 40 workers in jobs that have an average annual salary of $47,000. The company projects that work force will be expanded to 60 employees within three to five years. Providing that kind of well-paying jobs for Lawrence residents is a significant community investment.
Supporting Serologicals also is an investment in Lawrence's future. In addition to the capital investment and the jobs it will provide, the firm also will give Lawrence an important foot in the door to attract other biotechnology companies, and other firms that work with them.
The presence of KU and Lawrence's ties to the Life Sciences Initiative in Kansas City make this an attractive area for biotech firms. A Serologicals success story could vastly enhance the city's reputation as a good place to locate other similar firms.
The Serologicals Lawrence plant would produce the company's largest-selling product, EX-CYTE, a blood product used to create several drugs for the treatment of cancer. Everything about this company fits with what area residents describe as the perfect business for Lawrence. It is a clean, solid industry that provides well-paying jobs for well-educated people who might otherwise have to travel outside Lawrence to find jobs that match their qualifications. It increases the tax base and contributes to the city's potential to attract other high-tech businesses.
Serologicals' investment is well above the threshold at which city leaders have agreed to consider property tax abatements that exceed 50 percent. That limit was set partly to assure that companies seeking larger abatements represented an exceptional opportunity to advance the Lawrence business community.
Serologicals fills that bill and should receive the city's enthusiastic support for locating a new plant in Lawrence.