Archive for Friday, January 13, 2006

Packerware plans expand again by millions; abatement holds key

Latest proposal also would add 76 employees

January 13, 2006

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Plans to expand Lawrence's Packerware plant have grown.

According to documents released Thursday by the city, the plant is now slated to add 76 employees and another $72 million in equipment and buildings to the company's current facility in northern Lawrence. That's in addition to the 78 new jobs and $58 million in new equipment that the company announced for the plant last month.

But it all depends on Packerware receiving the largest tax abatement in the city's history.

"We are very optimistic that we can grow," said Brent Beeler, chief operating officer of Berry Plastics, the parent company of Packerware, which produces plastic cups, housewares, garden tools and other items. "We think the quality of our staff in Lawrence is outstanding."

The expansion - which would begin between this year and 2009 - is contingent upon city approval of a 10-year, 90 percent tax abatement.

All the jobs in the project will meet the city's living wage requirement for companies seeking a tax abatement, the company said. Salaries would range from $21,840 to $72,800, with the average at $27,438.

Kansas University researchers have completed a city-mandated analysis of the company's abatement request. The review found that, over 10 years, the community would receive more than $4 in benefits for every dollar abated. City Hall's tax abatement policy requires that a project produce benefits at least 1.25 times the abated tax amount.

"It produced some good, strong numbers," Lavern Squier, president and chief executive of the Lawrence Chamber of Commerce, said of the analysis.

Whether it will be strong enough for city commissioners to grant the abatement is an open question.

"I'm generally supportive of the request, but I'm not sure I support it at the 90 percent level," Mayor Boog Highberger said.

Highberger said he was concerned because the analysis showed the Lawrence school district would benefit far less than the city or county government - only breaking even after 10 years. A lower abatement, he said, would provide higher benefits to all three local governments.

But Highberger said he wasn't ready to propose how much the abatement amount should be lowered.

Members of the city's Public Incentives Review Commission will discuss that item during a meeting at 4 p.m. Thursdayat City Hall. Highberger, who chairs the committee, said he expected the meeting to produce a recommendation. The project could be up for City Commission approval Jan. 24.

Packerware, which was founded in 1968 in Lawrence, currently employs about 450 people.

Comments

Rhoen 9 years, 2 months ago

Lawrence will soon be in the news as the world's leading producer of PORK, or at least the tacky little plastic barrels you can stick it in ...

Urge Powers-That-Be to think ahead and think again and vote down this ludicrous buddy-network plan to enable another huge corporate parasite to fasten itself on the working people of our town!

A major "pull" to lure businesses here has historically been to tout the extraordinarily low wages for which people in Lawrence will work. We have the lowest minimum wage in the country (and Puerto Rico, no lie) along with the highest cost of living in the state. How well can a "promised" average gross salary of under $28K annually help pay the bills?

How do a "promised" 78 or 75 jobs - probably a heavily inflated figure, as we've seen done in the past - justify a tax abatement at all, must less one that is virtually a complete tax waiver?!

There has been no mention of how the funds pulled away from the Lawrence / Douglas County infrastructure by this massive 90% tax abatement will be recovered. Who do you think will pay the tab for goods, services, utilities, roads ... etc. ... that these waived taxes would have covered?

Saw no mention either of environmental impact by another factory producing items out of hydrocarbons and whatever other poisons will be used.

And will there be many round-a-bouts to funnel traffic in and out of the facility?

Bad plan.

Just say no.

Richard Heckler 9 years, 2 months ago

I'm all for an environmental impact statement. Gov Sebelius is working on removing equipment from personal property tax rolls so how much do we need to give away.

Can Bedroom communities afford tax abatements?

Why doesn't our illustrious C of C bring in some upper level salary positions in the light industrial area...light industrial pays the higher property tax rate???

A $27,000 salary with a family is poverty level? Does this come with medical benefits?

just_another_bozo_on_this_bus 9 years, 2 months ago

It would seem to me that the "city" and the "citizens" should be one and the same. The forty million dollar mistake you refer to came at a time when business considered and used the city as their private domain. So it would seem that when private business involves itself unchecked in city business, it leads to disaster.

badger 9 years, 2 months ago

Rhoen said:

"Urge Powers-That-Be to think ahead and think again and vote down this ludicrous buddy-network plan to enable another huge corporate parasite to fasten itself on the working people of our town!

A major "pull" to lure businesses here has historically been to tout the extraordinarily low wages for which people in Lawrence will work. We have the lowest minimum wage in the country (and Puerto Rico, no lie) along with the highest cost of living in the state. How well can a "promised" average gross salary of under $28K annually help pay the bills?"

The article said:

"Packerware, which was founded in 1968 in Lawrence, currently employs about 450 people."

Now, I'm not saying I'm for this tax abatement. I'm just for reading all the way to the end of the article. If they're a Lawrence company and have been for almost forty years, remind me how this abatement is going to lure some 'corporate parasite' to town by promising ridiculously low wages?

And as for 27,000 not being enough to live on? I lived in Lawrence on a lot less than that without starving or going cold in the winter. I may have been eating more canned tuna than I would otherwise have chosen when I was making less than 20K, but I wasn't dodging the bill collectors, either.

At 27k in Lawrence, you'd need a second income to buy a house or support multiple children, but if you had a small family, you'd be able to rent a decent place, keep fed and warm and clothed, have a non-flashy car, and put a little aside if you were careful with expenses.

Rhoen 9 years, 2 months ago

Having been a resident of Lawrence since prior to the "first coming" of Packer Plastics, I'm well aware of that firm's history here as a corporate citizen. Many people who have lived in Lawrence for any length of time are acquainted with people who have worked at that plant and know what sort of "life-style" that job provided them.

The "promised" job / salary figures are not only low, they are probably inflated. That has been the M.O. of at least some of the firms that have received tax abatements. "Oops ... we added wrong ..."

It would be interesting to know what the CURRENT average salary of the rank-and-file employee at that factory is. That is one relevant piece of data that was omitted from the articles on this topic. I would place a substantial bet that the figure falls well below $18,000 per annum.

I would also bet that a handful of managers averages an annual salary of at least double what is paid the majority of the employees, who are on an hourly or piece-rate wage.

If I am incorrect, perhaps one of the management-types at Packer Plastics would care to correct me.

So, my use of the word "lure" in my earlier post relates to the PR ammunition that this tax "abatement" (and to me, anything over 80% is a tax waiver) will provide the Chamber of Commerce in luring more of this type of corporate citizen to Lawrence.

Add tax abatements / waivers to historically low wages paid workers in Lawrence / Douglas County and you could trigger a corporate feeding frenzy among those who need to expand their profit figures.

Furthermore, recent national news that names Lawrence as the second-meanest city to the homeless only hurts the feelings of those who like to think that living by "art" alone can make a town wonderful. Sleeping alongside a well-decorated plastic (Packer Ware?) Jayhawk should make up for a multitude of inconveniences, right?

Actually, this "mean" to homeless designation presents a positive for those who would like to operate their businesses without having to deal with a lot of poor people asking for handouts. If the city works to keep them out of the away ... well, so much the better.

Not only should this proposed tax "abatement" to fund the "second coming" of Packer Plastics be voted down, the Commissioners should undertake an even more rigorous review of prior abatements. Where "promised" jobs and salaries did not materialize, those firms should be made to reimburse the tax-give-away, plus interest.

A truly "progressive" Commissioner would pay better attention to the bottom line, so that we could actually progress as a community. And a truly "conservative" Commissioner would focus on expediency and conserve our current and potential resources more capably.

lastword 9 years, 2 months ago

If the abatement is denied, it will be consistent with the C of C's strategy to economically de-stratify Lawrence. Their mission is to ensure lawrence stays a wealthy bedroom community by only granting incentives to industries they deem as worthy of being a Lawrence citizen.

Bio-sciences seems to be the latest, hot industry. There's one to hang your hat on! How's that Seriologicals deal feeling? I would much rather see expansion in all industries not an uncertain industry that only employs people with significant education and experience in small numbers.

And yes, I realize this is a college town and we have an abundance of educated individuals that could be employed by the bio-science and other industries. But unless the leaders of Lawrence realize that every community needs all levels of skilled labor (yes, even unskilled) Lawrence will continue it's journey to elitism. Soon the chamber won't send information packets to new residents prior to running a credit report and day workers from Ottawa, Topeka, and Leavenworth will have to check in at the Douglas county line before entering.

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