Lawrence City Commission to consider tax breaks, other incentives for pretzel facility; project would add nearly 300 jobs

photo by: City of Lawrence

A new pretzel production facility is the second phase of an existing VanTrust project at Lawrence's VenturePark.

Updated at 5:57 p.m. Monday, Oct. 19:

City leaders will soon consider tax breaks and other economic incentives for a project that would bring a pretzel production facility and close to 300 jobs to Lawrence.

As part of its meeting Tuesday, the Lawrence City Commission will consider an approximately $4.4 million economic incentives request from VanTrust Real Estate for an industrial and light manufacturing building. The approximately 150,000-square-foot building will accommodate a production facility for Indiana-based Pretzels Inc., which is expanding its operations to Lawrence, according to a city staff memo to the commission.

Kansas City-based VanTrust Real Estate submitted its request earlier this month for Pretzels Inc. to locate in VenturePark, the city’s industrial park on the eastern edge of Lawrence, as the Journal-World reported. Pretzels Inc. makes a variety of flavored and stuffed pretzels for several private label brands and also sells pretzels under the Harvest Road brand, according to information on the company’s website.

VanTrust estimates the project will support 281 jobs in its first four years of operation, with an average annual salary of $42,800, according to City of Lawrence Economic Development Coordinator Britt Crum-Cano. Crum-Cano said the total estimated value of the requested incentives for all taxing jurisdictions is $4.39 million.

The pretzel production facility is the second phase of an existing VanTrust project at VenturePark. The development firm previously received city incentives in 2017 to build a speculative or “spec” industrial building, or a building constructed prior to having tenants, as a way to attract businesses looking for a relatively quick startup. That building is now partially occupied with warehouse space for Plastikon Industries. The new building for Pretzels Inc. would be built next to that building, according to application materials.

As part of this phase, VanTrust is requesting a property tax abatement, sales tax exemption and free land, according to the memo. Specifically, VanTrust is requesting a 10-year, 70% property tax abatement; a sales tax exemption on construction materials and personal business property; and for the city to provide the land, which is currently valued at $381,020. Going forward, VanTrust will be responsible for paying the special assessments on the property, which are $687,661 for a 20-year period.

Crum-Cano said the total estimated value of the incentives package includes approximately $2.2 million for the property tax abatement, $1.86 million for the sales tax exemption and $381,020 for the land. She noted that total assumes that the project is built to the environmental standards proposed in its application, which allow the 70% property tax abatement as opposed to a 50% abatement. Over the 10-year incentive period, Crum-Cano said that VanTrust will be responsible for paying the unabated portion of the property taxes, as well as mill levies that are shielded from abatement by state law — depending on the abatement percentage, the company’s total property tax responsibility could range from $1.2 million to $1.8 million.

VanTrust requested both the 2017 incentives and the current economic incentives package as part of the city’s Catalyst Program, a fast-track incentives program for industrial projects that want to build or expand facilities in VenturePark, East Hills Business Park or other industrially zoned land. For businesses that locate in the mostly vacant VenturePark, the city provides the land for free and the company assumes payments of the special assessments levied against the plots as part of the development of the business park. The program allows for speculative projects where a tenant is not yet identified and as a result does not require specific information about the number of jobs and their pay levels to be provided as part of the application process.

The project will invest more than $88 million on the building and equipment, made up of $24 million in real property improvements and over $64 million in personal business property, according to the memo. VanTrust anticipates breaking ground on the project this year and estimates that the production facility will be operational in fall of 2021.

The City Commission will convene virtually 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. Directions for submitting public comment and correspondence are included in the agenda that is available on the city’s website, lawrenceks.org.

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