City Commission approves providing additional lot in Lawrence VenturePark to manufacturing plant
photo by: Journal-World File Photo
Updated at 9:30 p.m. Tuesday
City leaders have approved an expansion of the multimillion-dollar incentives package for a manufacturing plant that plans to bring 140 jobs to Lawrence over the next five years.
As part of its meeting Tuesday, the Lawrence City Commission voted unanimously to provide an additional free lot at Lawrence VenturePark to Kansas City, Mo.-based U.S. Engineering Metalworks and to make a change to previously approved industrial revenue bonds. The change to the bonds will allow the company to pursue tax-exempt bond financing. The total value of the incentives package is now $3.2 million, according to a city staff memo to the commission.
The commission previously approved incentives for the project last year under the city’s Catalyst Program, which incentivizes industrial development, and commissioners continued to voice their support for the project on Tuesday.
“I think it continues to be a great project, and I’m really looking forward to having this company become a part of Lawrence,” Commissioner Lisa Larsen said. “I appreciate their work.”
The additional lot is being provided in part because the company is now planning to build a significantly bigger plant — a 154,000-square-foot facility instead of a 100,000-square-foot one, according to the memo. The additional lot also resolves issues encountered with required access points to the site.
The larger building will not affect the jobs schedule for the project, which initially called for the 100,000-square-foot facility with plans for a future expansion.
Brendan Rittel, CFO and general counsel for the company, said in an email to the Journal-World that the expanded facility is the result of continued ordinary planning and not the result of any contemplated change in total workforce. Rittel said that during the design process, the company determined that a larger footprint was necessary to accomplish its production goals.
Rittel said the previous workforce projections and timelines remain the company’s best estimates. Those projections call for the plant to provide 80 jobs in the first year of operation, another 10 jobs the second year, another 20 the third year and another 30 the fourth year, for a total of 140 jobs. The average wage at the Lawrence plant continues to be $72,800, plus other benefits, according to the memo.
However, the project will go forward on a delayed schedule due to the coronavirus pandemic. U.S. Engineering informed the city that it plans to place the Lawrence project and its other capital projects on at least a three-month hold, according to a letter provided to the city. The letter states that the company still wishes to process all its applications so that it can proceed immediately once it is ready to do so.
The city’s Catalyst Program provides a fast-track application process for industrial projects that want to build or expand facilities in VenturePark, East Hills Business Park or other industrially zoned land. The program provides free land to companies that wish to locate in VenturePark, but the company must take over the special assessments on the lots.
The commission approved U.S. Engineering Metalworks’ original incentives request in September. That included the original lot, a property tax abatement and industrial revenue bonds, which allow the company to obtain a sales tax exemption on materials for the $15 million project. The tax abatement will continue to be for a 10-year period and could range from 50% to 70%, depending on whether the facility is built to certain environmental standards. The change to the bonds approved Tuesday will allow the company to pursue tax-exempt bond financing, which was not contemplated with the original bond resolution and requires the commission to authorize a new one, according to the memo.
In other business, the commission voted unanimously to approve a new prioritization method for the city’s Capital Improvement Plan that scores one-time projects and purchases against nine factors or categories. As part of its meeting Tuesday, the commission voted to confirm the nine categories, their definitions and the questions used under each category to determine a project’s score. Each category is weighted so that the final score is out of 100, and the commission will further discuss and amend the weightings in the future. The new method will be used to inform the city manager’s recommended CIP, which will be brought to the commission for consideration in June.