Memorandum

City of Lawrence

City Manager’s Office

TO:	Tom Markus, City Manager
CC:	Diane Stoddard, Assistant City Manager Casey Toomay, Assistant City Manager
FROM:	Britt Crum-Cano, Economic Development Coordinator
DATE:	May 2, 2017
RE:	Background on Plastikon prior incentives

Staff has been asked to provide information on past City provided incentives to Plastikon Healthcare, in response to an email sent to the City Commission on May 2, 2017.

Dear Commissioners:

I would like to express my reservations regarding the request by Plastikon Healthcare for a tax waiver on land they are attempting to aquire. Plastikon does not not have a favorable history of following through on its promises. In 2010, Plastikon entered into an agreement with the city to create 126 jobs by 2015 (https://assets.lawrenceks.org/assets/agendas/). It is now 2017 and Plastikon still only has 22 full time employees. In addition, the land for which the waiver is requested is not even needed for the planned expansion. $40,000 may not seem like much for the city, but neither is it much for a company with millions of dollars. Let them show they mean what they say this time. Then, if they wish to expand onto new land, review the requests at that time.

Sincerely,

Brian Van Schmus

On June 22, 2011, the City, County and Plastikon Healthcare LLC signed a performance agreement for an employee training grant to be provided annually over a five year period (2011-2015). The grant was valued at $500 per full-time employee with grant payments to be shared equally between the City and County. The program was capped at 126 employees for a total maximum value of $63,000 ($31,500 each from the City and County). The agreement didn’t require employment creation but rather awarded the company for employment creation.

In November 2011, the company commenced substantial business operations in their new facility at 3780 Greenway Circle in East Hills Business Park, hiring 19 full-time employees. This equated to the company earning a total award of $10,700 for 2011 ($5,355 each from the City and County). The company did not submit certification in 2012 and no grant payments were made in that year or for the remaining years specified in the agreement.

Plastikon has been discussing future expansion plans with the City and those will be the subject of future requests for formal action by the City Commission.