Panel favors tax abatement

City commission still must consider 80 percent break for Serologicals Corp.

After a last-minute discussion of the merits of tax abatements, a city review committee Thursday voted to recommend approval of tax breaks for Serologicals Corp., a biopharmaceutical company that wants to build a plant in Lawrence.

On a 4-2 vote, the Public Incentive Review Committee recommended the Lawrence City Commission approve a 10-year, 80 percent tax break for the company, which plans to build a $28 million plant and initially bring at least 40 jobs with average annual salaries of $47,000.

“This is huge,” Mayor Sue Hack said after the meeting at City Hall. “This is exactly the direction that Lawrence wants to go in terms of life sciences.”

Because the company met criteria outlined in the city commission’s tax abatement policy, the outcome was expected. But the decision was not without dissent.

Kirk McClure voted against the recommendation and said the city’s abatement policy should be revisited, arguing that the company might come to Lawrence without benefit of the tax incentive.

“The simple fact is that the city should not give away one more dollar than it needs to,” he said.

McClure voted in favor of a motion that would have given the company a 50 percent abatement for the first four years, followed by an 80 percent abatement for the last six. The motion failed.

Jonathan Sangster, managing director of CB Richard Ellis, the Atlanta-based firm representing Serologicals, said he anticipated that discussion.

“The point is well-made that communities and states are in economic difficulties these days,” he said.

But he also pointed out the economic benefits of the company’s coming to town and said Lawrence — a town that was not even “on the radar screen” when Serologicals began looking for a site — was lucky to be chosen.

“Competition among communities is extremely tough,” he said.

Lawrence was chosen for several reasons, he said, including the presence of Kansas University, the city’s proximity to Kansas City, the availability of a workable site, unified community leadership and the tax abatement.

“But for the aggressiveness of the Serologicals economic package, I seriously doubt we would be standing here today,” he said.

The abatement received a favorable rating in an analysis by KU’s Policy Research Institute. The city commission is scheduled to vote Jan. 28.

Serologicals announced in December its plans to build a 43,000-square-foot plant on 12.5 acres at East Hills Business Park on Kansas Highway 10. It will manufacture Ex-Cyte, an ingredient used in the manufacture of various pharmaceutical products.