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Archive for Friday, April 16, 2004

Abatement recipients show how they fare on tax breaks terms

April 16, 2004

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Allen Press, Inc. would need to invest $1.9 million in new equipment and $626,000 in building upgrades to meet the terms of a city-approved tax abatement granted five years ago.

But the Lawrence-based printer of scholarly journals, located at 810 E. 10th St., still manages to employ at least 10 more people than it promised and pay the majority of its workers more money than the state average for such jobs.

Suggestions that the company isn't living up to its tax-break obligations simply aren't fair, said Charlie Shelton, the company's comptroller.

"If projections were an exact science, we would all be working on Wall Street and be millionaires," Shelton said Thursday, after the city's Public Incentives Task Force reviewed the performance of companies receiving tax breaks. "We do the best we can. ...

"It's hard to set exact, draw-the-line standards."

Such difficulties were on the table for Thursday's meeting at City Hall, as task force members grappled with balancing government needs and business realities.

The task force received a report detailing the performance of 13 companies that took advantage of tax breaks last year on property and equipment. The report lists the amount of investment, wages paid and jobs created in recent years, as compared with the amounts promised when the tax break was approved.

Some companies, such as MartinLogan, 2101 Del., exceeded expectations. The maker of high-end speakers has invested $1.48 million in its building, land and equipment. This is up 12 percent from projections in its 1998 application. At the end of last year, it had 61 full-time employees, one more than it projected. It also had wages in 12 of 13 job categories paying above the state average for such work.

Other companies fell short. E and E Display Group, 910 E. 29th St., which secured its tax break in 1992, ended last year with 170 full-time employees, or 201 fewer than the company had expected.

Kirk McClure, a task force member, said only three of the 13 companies had come within 90 percent of their expectations for total investment, number of jobs created and provision of wages within 90 percent of the state average.

"What we have is noncompliance, widespread," said McClure, an associate professor of urban planning at Kansas University. "It's not the exception. It's the norm."

Task force members agreed to forward the report to city commissioners for review.

Opinions differ among task force members, commissioners and other city officials whether the city can or should amend the tax breaks to penalize companies that have not met their commitments.

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