Memorandum
City of Lawrence
City Manager’s Office
TO: David L. Corliss, City Manager
CC: Diane Stoddard, Assistant City Manager
FROM: Corey Mohn, Economic Development Coordinator
DATE: May 25, 2011
RE: Plastikon Agreement
Background
Plastikon purchased the Serologicals Building in East Hills Business Park with plans to manufacture high tolerance parts and accessories for the diagnostic healthcare and pharmaceutical industries. Plastikon will commence operations in Lawrence by the end of calendar year 2011. The City of Lawrence and Douglas County have finalized the Plastikon Healthcare, LLC Performance Agreement for Economic Development Incentives.
Major Provisions
Plastikon requested an employee training incentive of $500 per employee, paid over 5 years by the City and County, with a maximum payment of $63,000 to Plastikon over those five years. The $63,000 total is based on the creation of 126 full-time employees.
Two major provisions for consideration:
1. Section 4. a: The agreement indicates a full-time employee is one that is working 32 hours per week, which is consistent with Plastikon’s employee rules and also makes the position benefit-eligible. This is consistent with other local manufacturers. The agreement also allows Plastikon to count part-time employment hours to create full-time equivalents (FTE), but this is capped at a maximum of 5 FTEs of the total of 126 employees.
2. Targets for employee creation have been adjusted from the original proposal for the first two years. This was done in response to their slower-than-anticipated move in schedule. The adjustment does not affect the overall total projection of 126 jobs, nor the hiring targets for years 3-5, but shifts 13 employee starts from 2011 to 2012. City staff recalculated the benefit/cost ratio and found negligible impact to this change.
Recommended Actions
City staff recommends the City Commission authorize the City Manager to enter into a performance agreement with Plastikon Healthcare, LLC in conjunction with Douglas County.