City OKs 80 percent tax break

The only drama Tuesday night about Serologicals Inc.’s request for an 80 percent, 10-year tax abatement concerned whether the Lawrence City Commission would give unanimous approval.

It didn’t — Commissioner Mike Rundle was the lone holdout on the five-member commission.

But sentiment ran so strongly in favor of the abatement for the pharmaceutical company that some of its most outspoken proponents were those who had helped lead the charge during the divisive abatement battles of recent years.

“The numbers are there,” said Commissioner David Dunfield, an opponent of past abatement proposals. “This is a risk I’m happy for us to take.”

He joined Mayor Sue Hack and Commissioners Jim Henry and Marty Kennedy in voting for the request.

Rundle wasn’t in complete disagreement. He said he would have favored a 50 percent abatement for the company.

“I am not comfortable with the 80 percent tax abatement,” he said. “This is not fair and equitable to the rest of the community.”

The vote’s result: Lawrence attracts a company that will make an investment of more than $25 million into the community and employ more than 40 workers with an average annual wage of $47,000.

“This is exactly the type of business we were looking for and hopeful of getting,” said Alan Zimmerman, a member of Henry’s task force that revamped the city’s tax abatement policy in 2001.

What’s more, officials said, the deal means Lawrence has enhanced its chances of attracting other lucrative “life sciences” companies in the future.

“It will convert Lawrence from a community that was never considered to a community that will automatically be considered,” said Bob Marcus of the Kansas City Area Development Council.

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

The $25.7 million investment in building and equipment — officials said it might be closer to $28 million — puts the company well above the city’s $20 million threshold for considering property-tax abatements of more than 50 percent.

A Kansas University analysis of Serologicals’ tax abatement request suggested that, over 15 years, the city would reap nearly six times the tax income it was giving up in the abatement.

The City Commission heard more than an hour of public comment Tuesday night, including representatives of the Douglas County Commission, Lawrence Chamber of Commerce and Kansas City Area Life Science Institute.

Ken McRae and G. Wayne Parks, candidates for the commission, also spoke; fellow candidate Gregory DiVilbiss attended but kept silent.

Only Parks and Kansas University business professor Allen Ford opposed the abatement.

“The cost is too high,” Ford said. “Small businesses in our community will be paying a tax rate that is 500 percent the rate that will be paid by Serologicals.”

The proposal, however, was met mostly with praise.

“It sends a clear message that Lawrence wants to be a player in the life sciences area,” Mayor Sue Hack said, “and we’re willing to take the risk to do that.”