Plastikon seeking tax incentives from city for expansion of Lawrence plant

Plastikon Healthcare LLC is seeking a tax break for the first phases of a major expansion planned for its plant in eastern Lawrence.

Lawrence city commissioners are scheduled to accept Plastikon’s economic incentives application as part of their consent agenda Tuesday. Plastikon is requesting a property tax abatement under the city’s Catalyst Program, which will mean a simplified review process and a quick turnaround for the request.

“If it qualifies under the Catalyst Program, it’s really meant to be a streamlined, faster, more efficient process for those industrial projects,” said Britt Crum-Cano, the city’s economic development coordinator.

Plastikon is applying for incentives for the first two phases of its expansion, which will add at least 13 jobs, according to the incentives application. Plastikon, which opened in East Hills in 2011, contracts to produce medical devices, pharmaceuticals and supplements for other companies. It also manufactures the plastic containers those products are packaged in.

Only industrial projects seeking to locate or expand in the city’s business parks or other industrially zoned land qualify for the Catalyst Program. The program doesn’t require the in-depth analysis and requirements typically called for under the city’s economic development policy.

Plastikon is requesting a 70 percent, 10-year property tax abatement on the new addition, according to a city staff memo to the commission. The company also plans to pursue a sales tax exemption on construction materials through the state of Kansas.

The first phase of the Plastikon expansion calls for a 50,000-square-foot addition to its current plant in the East Hills Business Park. The second phase would add the necessary finishes and equipment to operate an injection molding technology suite in the addition. Together, both phases would cost $7.3 million and would be complete by the end of 2018.

In April, the City Commission approved the Catalyst Program, which in addition to a simplified approval process also provides free land for companies that want to build or expand facilities in VenturePark and East Hills business parks. Free land is not a part of Plastikon’s application, as the company is building the expansion on land it already owns.

The company’s application also provides details about future additions not included in the incentives request. Phase three, tentatively scheduled for completion in 2019, would add another 50,000-square-foot expansion and 40-60 employees, according to the application. Additional expansions are planned for the next five to 10 years as Plastikon is awarded new contracts. Douglas County previously gave the company land next to its plant in anticipation of future expansions.

Plastikon’s application is the second the city has received under the Catalyst Program. The first applicant was VanTrust Real Estate, which was granted incentives to construct up to $31 million of speculative industrial buildings at Lawrence VenturePark. The Catalyst Program is temporary and will expire in April 2019 unless the City Commission decides to extend it.

Crum-Cano said the public hearing for Plastikon’s incentives request will take place Dec. 19. Because the incentives request is part of the Catalyst Program it does not require review by the city’s Public Incentives Review Committee.

The City Commission will convene at 5:45 p.m. Tuesday at City Hall, 6 E. Sixth St.