Archive for Tuesday, December 15, 2009

Berry Plastics seeking federal bonds for $21 million warehouse, distribution center

December 15, 2009

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More details emerged Tuesday afternoon on a proposal by Berry Plastics to build a large warehouse and distribution facility in Douglas County.

Berry Plastics — which in Lawrence also does business under the PackerWare name — confirmed in filings with the city that it wants to build a 600,000-square-foot warehouse and distribution facility that would cost about $21 million to develop.

Berry provided the details as part of an application for $20.9 million worth of federal Recovery Zone Facility Bonds. City commissioners at their meeting Tuesday night — which begins at 6:35 p.m. at city hall — are being asked to forward the company’s application to state officials, who are expected to make a decision in January on which projects qualify for the bonds.

Berry previously had confirmed that it was working on a proposal to build a new distribution center in Lawrence, but it did not reveal the size or cost of the project.

In its application, the company does not specify a site for the project, but said all the sites under consideration are in Douglas County.

The application also gives more details about the new jobs that the project likely would create. Berry officials listed 11 new jobs that would be created at the distribution center in the next five years. The average wage for the jobs would start at $14.75 per hour, according to the application. The application also anticipates the project would provide about 350 construction jobs.

The special recovery zone bonds would qualify Berry for a lower interest rate because the bonds are tax-exempt. That means Berry likely would receive a break of about 1 percent — or 100 basis points — on the interest rate it must pay to finance the project, said Roger Zalneraitis, the city’s economic development coordinator/planner.

The City Commission must approve the bonds, but they would not be backed by the city. Berry would be responsible for paying the bonds off.

The commission also is being asked at its meeting Tuesday night to forward an application from Bowersock Mills & Power Co. for $17 million worth of Recovery Zone Facility Bonds.

Bowersock is seeking the bonds for a previously announced plan to build a new hydroelectric power plant on the north banks of the Kansas River.

The application revealed that the Bowersock project did not win a U.S. Department of Energy grant it had applied for as part of the federal stimulus program, but it did score high enough to be chosen as an alternate to receive funding if other projects ahead of it fail to proceed.

According to the application, the details of the power plant project are largely unchanged from what was previously announced. The new plant at the north end of the Bowersock Dam would operate in conjunction with Bowersock’s existing plant on the south side of the river. The project is expected to create one new job, with an annual salary of about $46,000.

Zalneraitis said the two Lawrence projects are expected to face significant competition for the funds. The state has about $30 million in bonds that it can authorize, Zalneraitis said. The two Lawrence projects total nearly $38 million alone.

Douglas County, however, has about $12 million in special tax exempt bonds that it can issue for local economic development projects.

Comments

LloydDobbler 5 years, 3 months ago

Doesn't make much sense, does it Jack. We could be building a factory that builds wind turbines or solar panels, but no...we want to produce multitudes of landfill material. (Sorry to anyone out there who works at Berry).

maxcrabb 5 years, 3 months ago

So you guys never use plastic, right? And your computers run on wind energy? I hope you have insulators covering your windows and doors so you don't waste heat.

It's more jobs, more money, more investment in a sustainable Lawrence. Kansas has roundly rejected using wind farms so far, and we all ready have hydro electric energy with more to come, so what are you suggesting?

Demand begets supply.

hipper_than_hip 5 years, 3 months ago

It's like 20 jobs relocating from Topeka to Lawrence. Does anyone think those people in Topeka are going to actually move to Lawrence? They're just going to jump on the turnpike to come to work.

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