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Archive for Wednesday, April 29, 2009

City reviews tax abatement report

April 29, 2009

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City commissioners on Tuesday gave a passing grade to the seven companies in the city that received property tax abatements in 2008.

“Even with the economy being down, I think we continue to see pretty good success from companies that have received abatements,” Mayor Rob Chestnut said. “We’ve seen some recent layoffs, but it is not quite as bad as some other parts of the country.”

Both the City Commission and the city’s Public Incentives Review Committee approved on Tuesday the city’s annual property tax abatement report. The report showed that just two of the seven companies suffered losses of full-time jobs in 2008. The other five companies all held steady or increased employment.

According to the report, full-time jobs at Allen Press dropped from 347 to 327 during the year. That is still up from the 314 jobs the company had when it was issued a property tax abatement in 1999. Chestnut is the chief financial officer for Allen Press, and abstained from meeting discussions about the company’s figures.

Berry Plastics saw full-time employment levels drop from 486 in 2007 to 377 in 2008. The company did increase its number of part-time employees by 44 during the year. Berry’s full-time employee total is still above the 350 employees it had when it was granted an abatement in 1998.

Here’s a look at the other companies that received an abatement:

• Amarr Garage Doors saw employment levels in 2008 increase from 398 to 469. But since the beginning of the year, Amarr has announced a series of layoffs that have taken employee levels below 400, city economic development leaders estimated. Amarr had 340 employees when it received the abatement in 1998.

• DST Systems grew full-time employee levels from 133 to 161. Part-time employee levels dropped from 108 to 60. The company is 14 employees below the number of full-time employees it projected to have when it received the abatement in 2000.

• Full-time employee totals at Prosoco grew from 66 to 69. Part-time employees dropped from 3 to none in 2008.

• Reuter Organ had full-time employee totals grow to 34, up from 33 a year earlier. Part-time numbers also increased by two employees. The company, however, continues to lag behind the projections it made when it received a tax abatement in 2000. The company had projected to have 56 full-time employees by this time.

• Employment at Sauer-Danfoss went from 150 employees in 2007 to 151 employees in 2008. In January, however, Sauer-Danfoss announced job cuts of up to 20 people.

Comments

nowthetruth 5 years, 10 months ago

Rumor on the street is that Ammarr is calling many of their employees back to work. A guy that works with my Mom got called back last week. Sauer-Danfoss has never hit their abatement numbers, have they? I thought they committed to over 200 full time jobs when they came to Lawrence.

jafs 5 years, 10 months ago

Why doesn't this article include the promises made by the companies in exchange for the abatements?

Then we can judge for ourselves whether they have lived up to them or not.

SettingTheRecordStraight 5 years, 10 months ago

How about we lower the tax and regulatory burden on businesses so the city doesn't have to cut special deals to attract new job providers?

Lawrence should strive to be the most appealing place to locate or expand a business because of its welcoming environment.

jimmyspeachbaskets 5 years, 10 months ago

Just hope the City is enforcing the clawbacks it has in each abatement agreement. If emplyoyment projections are not being met, the abatement is prorated to reflect not meeting that goal.

While there is always a negative stigma to tax abatement, it is working. Job creation and growth are evident in the majority of the companies receiving abatement. This is excellent justification for future use of the most powerful attraction/retention tool the City has in its toolbox.

jafs 5 years, 10 months ago

Tax abatements make no sense if the goal is to "balance" the tax structure so that homeowners don't bear the overwhelming burden.

The last time I heard a commissioner speak about abatements, Sue Hack expressed a desire not to be "too picky" about the abatements and the companies' performance.

I would say that means not enforcing the proration structure.

scaramouchepart2 5 years, 10 months ago

The new tax abatements practically give over 100% abatement. It starts at 50% and goes up from there. So why is the idea of providing tax abatements to bring companies to town to pay taxes to take the pressure off residential taxes even come up as a part of the conversation. It sounds good at least to the ones pitching the scam called the Chamber.

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