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Archive for Monday, March 5, 2007

Good investment

A relatively modest tax abatement proposal could pay strong dividends for Lawrence.

March 5, 2007

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A tax abatement request from API Foils seems like a good opportunity for Lawrence to support the expansion of a business that already has proven itself as a good local employer.

The Lawrence City Commission is scheduled to hear a request at its Tuesday meeting for a 10-year, 55 percent tax abatement on a proposed expansion of the API Foils plant in the East Hills Business Park. About $11 million in new equipment for the plant already is exempt from property taxes by state law, so the city is considering a tax abatement only on the $4.5 million building expansion.

The company said the expansion would allow it to add 31 jobs over three years at salaries ranging from $30,000 to $80,000 a year. All of the positions would be well above the hourly "living" wage of $10.73 that the city requires for tax-abated companies.

A cost-benefit analysis conducted by Kansas University's Institute for Policy and Social Research projects that Lawrence would receive $6.26 in benefits for every $1 in property tax that is abated on the project. That's also well above the city's requirement of at least $1.25 in benefits for every abated tax dollar.

API Foils, which manufactures hot stamping foils used in packaging, is a British-based company that now employs about 65 people in its Lawrence plant. Its predecessor, Astor Universal, built its Lawrence plant in 1995. It is a strong company with a solid history in Lawrence.

An API Foils plant in Rahway, N.J., also is being considered for the expansion project. Perhaps granting a tax abatement in Lawrence won't be the deciding factor in where the expansion takes place, but there's no reason not to offer the incentive on what pencils out as a good investment for the city.

The tax abatement request easily passed muster with the city's Public Incentives Review Committee last week; it deserves the same easy passage by city commissioners on Tuesday.

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