Committee approves incentives for animal health company, receives 2014 report on tax breaks

A package of financial incentives for an animal health company looking to locate its corporate headquarters in Lawrence is another step closer to winning final approval.

The city’s Public Incentives Review Commission on Wednesday unanimously gave a positive recommendation for $215,000 in incentives for Integrated Animal Health, a two-year-old Australian company that plans to move its global headquarters to the Bioscience & Technology Business Center on Kansas University’s West Campus.

In other business, the PIRC approved the 2014 Economic Development Report, which provides details about the financial incentives offered by the city.

As reported earlier this month, the animal health company helps researchers and other companies take new ideas in the world of animal health and turn them into commercial products. The company’s largest success yet is a product that reduces antibiotic use in dairy cows. The company also has products for the race horse, beef cow and personal pet markets.

“This is the type of company that we not only want to get established here, but this is the type of company that we want to grow here,” Britt Crum-Cano, the city’s economic development coordinator, told the advisory board.

The company expects to have nine jobs paying an average salary of $113,000 a year within the next three years. Within the next 10 years, the company expects to have 50 jobs — including administrators, sales executives and medical liaisons — paying an average salary of more than $83,000 a year.

City officials used the projected 50 jobs over the next 10 years to calculate whether to offer the company a financial incentive. The proposed deal includes:

• $100,000 forgivable loan to help the company as it moves from Australia to Lawrence. The company would not have to repay the loan if it stays at the BTBC for at least three years.

• $115,000 to cover three years of lease payments for 700 square feet at the BTBC facility.

The city of Lawrence and Douglas County would split the costs of the $215,000 in incentives equally. The Douglas County Commission already has approved its portion of the incentive package. With the PIRC’s positive recommendation, the City Commission is expected to give final approval to the package on Tuesday.

Among the figures reported in the 2014 Economic Development Report, which provides details about the financial incentives offered by the city:

• From 2011 to 2014, the city has provided $591,254 in property tax abatements to manufacturing and other industrially based companies. The abatements have helped the companies — Amarr Garage Doors, Prosoco, Grandstand Glass and Sportswear, and Sunlite Science & Technology — add 330 jobs with an average salary of $37,918 a year. The companies also have invested about $21 million in new plant and equipment upgrades.

• From 2011 to 2014, the city has provided $2.9 million in tax incentives — namely tax rebates and approvals for special taxing districts — for hotel, low-income apartment, retail development, and office development projects. The city doesn’t track the number of jobs or salaries created by those projects, but rather measures the amount of new construction added by the developments. The city estimates those projects — which include The Oread hotel, the Bauer Farm development at Sixth and Wakarusa, the Treanor Architects downtown headquarters and multiple developments in the Warehouse Arts District — have resulted in about $55 million in new investments.

• The city thus far has spent $2.04 million in infrastructure upgrades to help support the new Warehouse Arts District in East Lawrence, which also includes the rent-controlled Poehler Lofts apartment building.

• The city in 2014 spent $341,540 to help support the Bioscience & Technology Business Center on KU’s West campus. Since 2006, the city has spent $3.5 million to support the center, which helps young science and technology companies get started. That’s in addition to funding that Douglas County has provided the center. At the end of 2014, the BTBC estimated that the 31 companies it works with had 136 employees with an annual payroll of $8.1 million.

City commissioners are scheduled to receive the 2014 Economic Development Annual Report in the next several weeks.