An update on Menards’ plans for local distribution center; Lawrence manufacturer expanding, but in Shawnee

There was some thought that a Trump victory in the presidential election would lead to a positive business development for Lawrence. No, the rumor that Vladimir Putin was going to set up a knock-off Jayhawk Beanie Baby operation in town isn’t true. Instead, there was some hope that the election result would spur Menards to restart its plans to build a 100-job distribution and manufacturing plant at VenturePark.

Thus far, that has not been the case. A Lawrence chamber of commerce official told me he remains in contact with Menards, but the company hasn’t said anything that gives anybody a clue as to whether the company plans to start the Lawrence project or whether it has been scrapped.

“There is nothing at this point to say they are a definite go at any point in the future,” Steve Kelly, vice president of economic development for The Chamber, said.

In case you have forgotten, Menards received City Commission approval in January 2016 to build a plan that would manufacture and distribute trusses, stone blocks and other products on about 90 acres of property at VenturePark. The project would employ 100 to 150 people. The city authorized about $2.3 million in incentives for the project.

But by May, the project had been put on indefinite hold. In October, local economic development officials said they still didn’t know the future of the project, but they speculated that Menards was waiting to see the outcome of the presidential election before deciding whether to invest in new projects. There was an assumption the company was rooting for a Trump victory, given that Menards is owned by a family that is well-documented as being politically conservative. And indeed, a Trump victory generally has spurred activity in several financial and business markets. (Sales of Russian translation books have soared, for example.)

Kelly said there are some signs that the company may be getting closer to restarting projects. He noted that Menards pretty much put on hold all new projects that hadn’t yet started in 2016. He has seen some reports of some new store projects in other markets moving forward in 2017. So, that may be a good sign for the Lawrence project, but chamber officials are hesitant to read too much into anything.

“The conversations we have had have been positive, but I can’t tell you that we have a definite go-ahead,” Kelly said.

We may be entering an interesting time for the project. I thought to ask for an update because the city, as we have reported, is considering a new economic development incentives program to jump start development at VenturePark, which is on the east edge of town where the Farmland fertilizer plant used to be. The Menards project was scheduled to be the first development in the park, which opened in October 2014. More than two years later, the park is still seeking its first tenant.

Menards has selected a 90-acre site at VenturePark for its project, but it has not yet purchased the site. That brings up the question of whether the city is going to include that 90-acre site in the new incentive program, which would offer free land and other incentives to companies wanting to build in VenturePark. In other words, is the city confident enough that Menards is going to happen that it will keep that piece of property in reserve?

Kelly said he thinks the city would have to seriously consider allowing someone else to build on the property.

“Certainly we would like Menards to come through,” Kelly said. “But if this program stimulates interest and there is a developer who wants to move on a quicker timeline, I think that certainly would be considered by the city. The city’s interest is to get things going.”

• I also have some news on that front. As we have detailed, the City Commission tonight will consider a program that essentially would allow the city to offer free land at VenturePark and put tax abatement requests for VenturePark and East Hills Business Park projects on fast-track approval. Both of those ideas are a new level of aggressiveness for City Hall.

But in talking with Kelly, it is clear the city actually may take the aggressiveness level a step further. That’s because the new policy contemplates offering those types of incentives to a company who wants to construct an industrial building “on speculation.” That means the company would be constructing the building without having a tenant in hand. Instead, the hope is the construction of the building would lure a tenant to the property.

That means the city could find itself offering free land and a tax abatement to a company that doesn’t yet know how many or what type of jobs may be located in the building. Such deals happen in other communities, but they aren’t common in Lawrence. Whether that draws objections from some community members remains to be seen.

“I think at a base level that probably is something people will have to get comfortable with,” Kelly said. “When you are talking about spec development, there is no guarantee who the tenant will be.”

But Kelly — who before joining the Lawrence chamber recently was a longtime economic development professional for the state — said Lawrence needs to consider the value of having some spec buildings available in the community.

He said companies are currently less interested in constructing a building from scratch. Often they want a building they can move into and make minor modifications to suit their business needs. Kelly said companies are declining to look at Lawrence because there isn’t currently any sizable space– think 75,000 square feet and up — available.

But Lawrence has tried spec buildings in the past with mixed results. An approximately 65,000 square-foot speculation building was constructed in East Hills Business Park several years ago — it is the one that backs up to Kansas Highway 10 right about where the highway curves. The building sat empty for several years until a KU entity purchased the space for a design studio in 2009. That wasn’t the outcome economic development leaders had in mind when they started the project.

Kelly said building the right type of space is important, but he thinks there are companies experienced in the spec building industry that will give Lawrence a look, especially if the city can offer some incentives. He noted that spec buildings have played a significant role in attracting new companies to the intermodal rail facility in Edgerton.

And, while he’s not ready to wave a red flag, Kelly did say that it is important that VenturePark gets its first tenant. Selling a park that is empty is harder than selling a park that has a tenant.

“I don’t know that there is a magic number that if the park sits empty for ‘x’ period of time that it is cursed,” Kelly said. “I prefer to look at this as being proactive and getting something going. Once there is activity on the site, I think that could take the lid off and we could see more activity. There is just this human quality that makes it hard to believe something is actually happening until people see it happening.”

• On more piece of news on the economic development front. A Lawrence company is expanding and adding 60 jobs to its workforce, but it is doing so in Shawnee.

EntreMatic — the company more commonly thought of as Amarr Garage Doors — has signed a deal to open a production facility in the WestLink Business Center in Shawnee. It is leasing about 70,000 square feet of space in the Johnson County business park.

EntreMatic has about 800 employees at its Lawrence plant in the East Hills Business Park. It makes garage doors that are sold across the globe.

The company began a search for an expansion site last fall. Among its criteria for a site was one that was close to its Lawrence production plant, the company said in a statement.

That would lead you to believe that the company was open to expanding in Lawrence, but simply couldn’t find a facility to meet their needs. The Amarr plant is next door to the vacant VenturePark industrial area.

Kelly said his reading of the situation is that Entrematic decided it needed space it could move into immediately, rather than take the time to build new space.

“We obviously would really like to have those type of expansion opportunities happen here,” Kelly said. “I think that project is another thing that is spurring some additional interest (in the incentives program) and the need to be more proactive.”

Amarr has begun hiring for the new plant, which will produce several types of garage doors and assemble garage door hardware. The facility is expected to open this month.