Archive for Tuesday, July 5, 2011

Mars landing: Official describes how state pursued candy plant

July 5, 2011

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— Economic development is a little like courtship, says Steve Jenkins, senior vice president of Go Topeka Economic Partnership, but as he describes the city’s pursuit of a new Mars candy factory, tactics from the art of war also come into play.

Be aware of the enemy (the dozens of other communities also being considered). Be comfortable with secrets (code names for projects are useful). And choose weapons wisely (incentives tailored to the company being pursued).

State agencies and Go Topeka Economic Partnership apparently got the mix right. Last week, Mars Inc. announced it would build a 350,000-square-foot plant — its first candy factory in 35 years — in Topeka’s Kanza Fire Commerce Park, at an initial cost of $250 million.

Groundbreaking is scheduled for August, with the plant expected to start turning out Snickers and M&M;’s in late 2013. Operated by Mars Chocolate North America, the plant is expected to have about 200 employees to start, with what the company said is the potential to eventually create 1,000 direct and indirect jobs.

Jenkins said that securing the largest single economic investment in the city’s history began with the courtship-like side of economic development.

“It is based on relationships. Building relationships with companies is crucial,” he said. “They trusted us, and we trusted them.”

When competing with other cities — in this case, 82 potential sites in 13 states — it is important the entities aren’t sitting across the table from each other. “We need to be sitting side by side with them,” Jenkins said.

Go Topeka learned last September from the Kansas Department of Commerce’s East Coast office about a company looking for a location.

The company — which was known only to Go Topeka as “Project Sweetness,” later to become “Project Pepper” and then “Project Buffalo” — had specific criteria, such as rail access and a large amount of land.

Go Topeka answered several questions and heard from the company within two weeks about a visit to the city. Jenkins and several other people had to sign a nondisclosure agreement about the company, although Jenkins knew it was Mars.

The company sent a site selection committee to Topeka, where the visitors took photos of Kanza Fire Commerce Park and asked to see downtown.

“They want to be in a community that is on the move and vibrant,” Jenkins said. “They are excited about the plans for downtown.”

The Mars officials also headed to metropolitan Kansas City to look at a potential site, but they contacted Go Topeka within two weeks.

“Then things kicked into high gear,” Jenkins said, with the company rapidly whittling down the possible sites to a handful.

More visits followed. Mars officials met with people from other major Topeka employers, such as Goodyear and Frito Lay, and from school districts, cultural groups and Washburn University. The local groups weren’t told the company’s name.

Next came months of financial negotiations that Jenkins said could sometimes feel like a battle.

“This is a tough business,” Jenkins said. “It is intensively competitive. Those incentive packages become very important when you are down to the final two or three.

“There is a lot of strategy involved. You know your enemy is out there, but you don’t know what they are using for weapons. It’s intense. The larger the project, the more complex.”

What emerged was an incentive package totaling slightly more than $9 million, including the land, site and infrastructure improvements, permit fees, and an agreement with Washburn to help train employees.

On the day before the deal’s announcement in Topeka, Jenkins traveled to Mars Chocolate North America’s corporate headquarters in Hackettstown, N.J., for the internal announcement.

“That place just erupted in applause,” he said. “They are excited this company is growing.”

Comments

Richard Heckler 4 years, 1 month ago

By the time the second Bush left office, the national debt had grown to $12.1 trillion.

Over half of that amount had been created by Bush’s tax cuts for the very wealthy.

Another 30% of the national debt had been created by the tax cuts for the wealthy under Presidents Reagan and George H.W. Bush.

Fully 81% of the national debt was created by just three Republican Presidents.

Dollars and Sense

Thanks Sam Brownback you reckless spender!

TopJayhawk 4 years, 1 month ago

AS usual a completely off base, bizarre response. No wonder you guys have no business. No wonder you are tax negative community.

TopJayhawk 4 years, 1 month ago

I bet the first hundred or so in line to get a job at this plant will all be from Lawrence. A city that cannot support itself. Where would you be without filling jobs in Topeka and KC.

You guys always talk about bein' green, but then you get in your cars and commute thousands of miles each yr to another city to work... What hypocrisy.

Keith 4 years, 1 month ago

Lawrencians commute to Topeka for jobs, Topekans commute to Lawrence for crime, it balances out.

kernal 4 years, 1 month ago

THJ, we have KU; we'll be fine.

West Lawrence wouldn't have grown so much if Topeka employees and employers hadn't wanted to move to Lawrence.

MyName 4 years, 1 month ago

It's not Lawrence's fault that Topeka sucks so bad no one wants to live there.

TopJayhawk 4 years, 1 month ago

The headline includes the State. But not much in the article. This was all "Go Topeka" not the state. Ol' Brownstain just wants some of the credit.

Flap Doodle 4 years, 1 month ago

The Mars people had heard about merrill and wanted to stay clear.

ksriver2010 4 years, 1 month ago

Ironically, while the coal plant spews for all to see.

MyName 4 years, 1 month ago

Was Lawrence ever in contention for this? Seriously if they wanted to build it here, where would that put it?

I grew up in Topeka and let me tell you Lawrence has half the population and twice the personality, and to prove it, you're coming over here to make these comments instead of CJOnline.

notanota 4 years, 1 month ago

They put in a proposal, but no, they were never serious competitors for the bid, because we lacked a good location with easy access to the Interstate. All this "Lawrence is so down on jobs blah blah blah" nonsense is silly. If we'd had the perfect location but decided to refuse them tax abatements or something, that would be a different matter. That's not how it went down.

vuduchyld 4 years, 1 month ago

Go Topeka is definitely doing something right.

We're debating about whether or not to offer some minor incentives to Olive Garden to come compete with local restaurants. Topeka is offering a REAL incentive worth $9.1 million to create NEW jobs manufacturing products that are sold outside of Topeka and bring money in.

I still don't want to live in Topeka, but the Eco Devo folks that have landed Target, Mars, and the new big bakery are definitely creating jobs.

kernal 4 years, 1 month ago

vuduchyld, don't compare Olive Garden's request with Mars incentives. Not nearly the same situation. Go back and read who would really benefit from the incentives being requested on the Olive Garden proposal, because it's not Olive Garden; it's Kansas City developers who bought the proposed location at an inflated price before the real estate market crashed.

Bob_Keeshan 4 years, 1 month ago

Why does the headline indicate the state had anything to do with this?

Could it be because of a competing AP story by John Milburn where Brownback is taking credit for these jobs and claiming there were no jobs created in the previous decade?

Nah, couldn't be. The AP wouldn't kiss up to Brownback like that, particularly not when Il Marrone's first 7 months in office have produced massive layoffs and negative job growth.

Note to Il Marrone -- you may have been able to skate by as a US Senator taking credit for jobs created by legislation you voted against, campaigned against, and propagandized against, but you will find Kansans less eager to let you swoop in and take credit back home.

Better hope all that abortion stuff, Il Marrone's real #1 priority, starts growing the economy.

gudpoynt 4 years, 1 month ago

Effectively illegalizing abortions in KS should grow the workforce in any event, with a return on "investment" maturing in about 14-16 years.

tomatogrower 4 years, 1 month ago

If anything Brownback may be hindering the state's cities attempt to attract business. They do look for quality of living and education. He is cutting both. He's also too busy messing in our bedrooms and bodies to worry about jobs. Why not worry about attracting businessess, Brownback, and I'll take care of my own bedroom and body.

ksriver2010 4 years, 1 month ago

“They want to be in a community that is on the move and vibrant,” Then that rules out Topeka. The incentive must have been higher than KC or they know that they can pay workers less in the crater of doom that is Topeka.

jafs 4 years, 1 month ago

Does it bother anybody else that surround communities are perceived of/discussed as "the enemy" and that the "art of war" is being invoked?

This is what these sorts of incentives have created - the idea that we are at war with our neighbors.

jhawkinsf 4 years, 1 month ago

That sounds good, but in the real world... Even if somehow you could get Topeka and Overland Park not to offer incentives, can you get K.C., Mo. to do likewise. Texas has things we can't offer, can we get them to level the playing field. We may as well ask China and India to start paying union wages with a generous retirement plan.
Sounds like another good plan on paper that will never work in reality.

jafs 4 years, 1 month ago

What plan?

I just pointed out the effects of these, and they concern me.

And, creating a situation in which one community fights with their neighbors to attract businesses doesn't seem to be working that well to me.

jhawkinsf 4 years, 1 month ago

Hopefully you're not suggesting that Lawrence not give these incentives to attract business (jobs, jobs, jobs) knowing full well that our neighbors will give those incentives.
In a perfect world we may want one thing, but the world is certainly not perfect.

jafs 4 years, 1 month ago

Actually, I probably would suggest exactly that.

This whole thing smacks of extortion - give us our breaks/incentives or we'll take our money, jobs, business elsewhere.

Where does it end? How much profit are we required to subsidize for developers? The Oread project would have made about 5%, but they wanted more like 8%. Next time a project will make about 8%, do we have to subsidize it up to 11%?

jhawkinsf 4 years, 1 month ago

I'm hoping for world peace, but I'm not holding my breath. In the real world, we need jobs. So if everyone else is giving incentives and getting the jobs, then we need to do the same.

Flap Doodle 4 years, 1 month ago

In other job news: "When the Obama administration releases a report on the Friday before a long weekend, it’s clearly not trying to draw attention to the report’s contents. Sure enough, the “Seventh Quarterly Report” on the economic impact of the “stimulus,” released on Friday, July 1, provides further evidence that President Obama’s economic “stimulus” did very little, if anything, to stimulate the economy, and a whole lot to stimulate the debt. The report was written by the White House’s Council of Economic Advisors, a group of three economists who were all handpicked by Obama, and it chronicles the alleged success of the “stimulus” in adding or saving jobs. The council reports that, using “mainstream estimates of economic multipliers for the effects of fiscal stimulus” (which it describes as a “natural way to estimate the effects of” the legislation), the “stimulus” has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion. That’s a cost to taxpayers of $278,000 per job.
In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the “stimulus,” and taxpayers would have come out $427 billion ahead..." http://www.weeklystandard.com/blogs/obama-s-economists-stimulus-has-cost-278000-job_576014.html

Flap Doodle 4 years, 1 month ago

After I've used the same material over 500 times, then I'll be taking merrill's copy/paste crown. Until that time, not so much.

Richard Heckler 4 years, 1 month ago

GoTopeka is cooking up tax dollar give aways to wealthy corporations. Whoever cooked up corporate welfare should be in jail.

Notice no other state tried to beat out Kansas. A $10 million tax dollar give away displays zero business sense. 5-10 years down the road they will be gone or back asking for more.

Flap Doodle 4 years, 1 month ago

I bet Mars owns a really spiffy corporate jet.

notanota 4 years, 1 month ago

I bet they shouldn't get as big of a deduction for it.

Flap Doodle 4 years, 1 month ago

That's not what the Mope in Chief said a couple of years ago....

notanota 4 years, 1 month ago

Really? He took a hard stance in favor of depreciating private jets two years faster than commercial planes? Well, what a flip-flopper!

hipper_than_hip 4 years, 1 month ago

Does the East Hills Business Park have rail access? I know there's a railroad track on the north side of the property, but I'm not sure if there is a rail spur available. How difficult is it to put in a rail spur?

North Lawrence has I-70 access and a rail line. There used to be a lumber yard where the Tanger Mall/I-70 Business Center is, and I seem to remember the lumber yard having a rail siding for deliveries.

notanota 4 years, 1 month ago

That should be something to consider. Or for the Farmland property.

Flap Doodle 4 years, 1 month ago

"Washington (CNSNews.com) – President Barack Obama signed two bills granting special tax breaks for corporate jet purchasers before making corporate jets a key target in populist rhetoric during Wednesday’s news conference. Obama signed the American Recovery and Reinvestment Act, better known as the stimulus act, in February 2009. In September 2010, Obama signed H.R. 5927, the Small Business Lending Fund Act. Both pieces of legislation included tax breaks to help businesses buy their own planes. This is in stark contrast to what the president said Wednesday. Obama mentioned corporate jet owners six times as the target for needed tax hikes...." http://www.cnsnews.com/news/article/obama-corporate-jet-tax-break-he-was-aga Spin, spin, spin...

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