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New Zealand animal health firm chooses Lawrence for U.S. headquarters; tax seizure closes Mirth Cafe, but reopening planned; Creation Station shuts down

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Lawrence was the belle of a Kansas City ball last night, thanks to an announcement from a New Zealand-based animal health sciences company. As we alerted you yesterday in Town Talk, we believed an animal health sciences company was about to announce Lawrence as its location for its new headquarters. Indeed, Simcro Ltd. announced at last night’s KC Animal Health Corridor Event that it has chosen Lawrence to house its North American headquarters.

The company announced it has reached a deal for a three-year lease in the Bioscience and Technology Business Center on Kansas University’s West Campus. In its announcement, the company said it “foresees a rapid expansion” in the Lawrence area, but did not provide any details about expected job totals. From people I’ve talked with, the company plans to start with a small executive staff of about three and expand from there.

The announcement is creating excitement in Lawrence economic development circles because it is further evidence that Lawrence can be a major player in the large animal health science corridor that has its center in Kansas City but stretches from Columbia, Mo. to Manhattan.

“The exciting thing about this is we’re starting to carve out our niche in the animal health corridor,” said Brady Pollington, vice president of economic development with the Lawrence chamber of commerce. “We’re finding that animal health companies are becoming more interested in being close to one of the top ranked pharmacy schools in the nation and the talent at KU. The companies are really getting into converting medicines that ere developed for human applications into animal health applications, and we’ll benefit from that.”

Simcro isn’t a name you may necessarily recognize, but it appears to have some momentum right now. The company already has developed products for some of the larger animal health companies in the world, including Novartis Animal Health, Pfizer Animal Health and Merial. In July, the company also announced the large private equity firm The Riverside Company bought a controlling interest in the company.

The company, which was founded in 1993, has spent the last six years growing its research and development capability four-fold, according to information provided by the company. The Lawrence announcement marks its first major facility in North America.

Andrew Shepherd, president of Simcro’s North American operations said in a release that the company believed it was important to get a North American facility to allow the company to be closer to current customers and new product development opportunities.

Pollington said local economic development leaders also will be watching for opportunities to help Simcro and other animal health companies establish manufacturing operations in Lawrence. He said Lawrence’s top drawing card currently is its research and development capabilities, but he said the animal health sciences industry is undergoing a trend that focuses on less outsourcing of its manufacturing work. He thinks Lawrence could benefit from that.

“Companies are looking to reshore, and they are looking to keep more of their manufacturing in house,” Pollington said. “With our central location and our talent in the community, there’s no reason we can’t be competitive in that arena.”

Kansas City leaders also were excited about the Simcro announcement. The company was highlighted to the crowd of nearly 900 people who attended last night’s KC Animal Health Corridor Homecoming Event.

With the announcement, the KC Animal Health Corridor is now home to the U.S. headquarters of firms that comprise 29 percent of the worldwide sales of animal health products and diagnostics, said Bob Marcusse, president and CEO of the Kansas City Area Development Council. In total, the corridor has more than 300 animal health companies, which Kansas City leaders say makes it the largest concentration of animal health companies in the world.

In other news and notes from around town:

• As you probably already know, all this talk of New Zealand companies and worldwide markets doesn’t faze me. I’m very international, and I have the crumbs from French toast and Belgian waffles to prove it.

Fans of such breakfast delights, however, currently have one less option in town. Mirth Cafe at 947 New Hampshire is currently closed, but there are plans to reopen later this month. It is a situation worth watching though. The restaurant was shut down last week by the Kansas Department of Revenue for unpaid taxes.

Jeannine Koranda, a spokeswoman with the Kansas Department of Revenue, said the company was about $120,500 behind on sales and withholding taxes. Koranda said after efforts to negotiate successful repayment plan were not fruitful, the department seized the company’s assets, including things such as stoves, kitchen equipment and other such items.

Ronald Zahorik, an owner of Mirth’s parent company, Zahorik and Son LLC, said the company indeed did have some tax problems, with about eight months of payments being missed. He said he was still hopeful of reaching a payment plan with the state when the seizure took place.

“I messed up on some taxes,” Zahorik said. “That is 100 percent my fault, and I take responsibility for that. But I thought I was working on it.”

Now, Zahorik said he has reached a deal to sell the Mirth name, recipes and other intellectual property related to the restaurant to an unnamed local buyer. He said plans call for the new ownership group to open the restaurant on Aug. 30.

He said the menu under the new ownership group is expected to be almost identical to what he was offering at Mirth. Zahorik said his wife will continue to work in a management role at the restaurant, but he was uncertain what capacity he may have at the new business.

When I talked with Koranda at the Department of Revenue, she said she was unaware of any plans for the restaurant to reopen. There are regulations in place that stop a business from simply reopening after it has had its assets seized as part of a state tax proceeding. But Zahorik said he was confident that there were no state regulations that would prevent Mirth from reopening under new ownership because the party responsible for the back taxes will have no involvement in the business.

“The new entity has purchased intellectual property, and the state can’t take that,” Zahorik said.

Zahorik, though, said he’ll continue to work on a payment plan with the state regarding the unpaid taxes.

• A longtime downtown business has closed its doors for good. MissFortune’s Creation Station at 726 Massachusetts St. shut down over the weekend. The business had been a part of downtown Lawrence’s funky vibe in one form or another since 1989. Jennifer Nash had owned the business since 2005. She said sales had slowed, which led to the decision to close The store sold all types of items ranging from clothing, jewelry, tapestries, sterling silver, incense and other items. Nash said she hasn’t heard of any other plans for the storefront, which she leased.

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