After massive amounts of trash found buried at construction site, city leaders to consider increasing incentives for manufacturing plant
photo by: Contributed
After massive amounts of buried trash were discovered on the site of a new manufacturing plant in the city’s business park, city leaders will soon consider increasing the economic incentives for the project to help offset the cost of the cleanup.
As part of its meeting Tuesday, the Lawrence City Commission will consider adopting a resolution to authorize an increase in the 10-year property tax abatement for the U.S. Engineering Metalworks plant, according to a city staff memo to the commission. To help offset the estimated $1.5 million cleanup costs, the property tax abatement would increase from up to 70% to up to 90%, adding approximately $700,000 to the value of the incentives package for a total value of about $4 million.
The commission originally approved incentives for the plant, which will eventually bring 140 jobs to the city, in 2019. After some modifications to the original incentives agreement as well as delays due to the coronavirus pandemic, construction of the new manufacturing plant began in January of this year. It was not long after construction began that the trash was discovered.
In mid-January, the developer started work on the project and discovered solid waste buried in multiple areas on the site, which is located in Lawrence VenturePark. According to a cost summary from U.S. Engineering, about 16,000 cubic yards of buried debris were discovered on the site, which must be removed and replaced with dirt for construction to continue. For reference, that is enough trash to fill about five Olympic-sized swimming pools.
The site was formerly part of the Farmland Industries fertilizer plant, which the city took over in 2010 for the purpose of converting part of the 467-acre site into its new business park, what would ultimately become Lawrence VenturePark. Though a portion of the former Farmland site contains environmental contaminants from past nitrogen fertilizer spills, city officials say the trash discovered on the construction site is general waste products.
Assistant City Manager Diane Stoddard told the Journal-World that the trash buried on the site was just typical solid waste and not hazardous waste, including plastics, wood and other typical trash. Stoddard said the trash was placed on the site decades ago when Farmland Industries was operational, when “disposal of some solid waste was handled differently than today’s best practices.”
According to the summary from U.S. Engineering, the solid waste requires removal, appropriate disposal, and the addition of replacement soil to enable a solid foundation, all of which is estimated to cost at least $1.5 million. The additional costs are significant and unanticipated, and could have caused the project to not proceed, according to the city staff memo. The memo states while the developer will be responsible for paying the costs upfront, city staff is recommending the state and local governments assist in offsetting a portion of the costs by increasing the project’s property tax abatement.
The city previously approved an approximately $3.2 million incentives package for the project, which includes the property tax abatement, a sales tax exemption for construction materials, and the provision of free land in VenturePark. The incentives were applied for under the city’s Catalyst Program, a fast-track incentives program meant to spur development in the park. Companies must take responsibility for special assessments on the land as part of the agreement.
The newly proposed incentives package would increase the property tax abatement from up to 70% to up to 90%, adding an increased value to the abatement of about $700,000. The revised package, based on updated property tax levies, building valuation, and land price now has a total value of $3.96 million, according to the memo. The new cost-benefit ratio for the city would be 1.35, meaning that for every $1 in public incentives, $1.35 of benefit value would be returned. The city’s policy is that the cost-benefit ratio be at least 1.25.
Projections call for the plant to provide 80 jobs in its first year of operation, another 10 jobs the second year, another 20 in the third year and another 30 in the fourth year, for a total of 140 jobs. The average wage at the Lawrence plant is estimated to be $72,800, plus other benefits. Regarding the construction schedule for the plant, Stoddard said work on the site is currently underway and U.S. Engineering anticipates construction being completed in late 2021 or early 2022.
The City Commission will convene virtually for its regular meeting at 5:45 p.m. Tuesday with limited staff in place at City Hall, 6 E. Sixth St. The city has asked that residents participate in the meeting virtually if they are able to do so. A link to register for the Zoom meeting and directions to submit written public comment are included in the agenda that is available on the city’s website, lawrenceks.org.