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CITY COMMISSION AGENDA ITEM |
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Department: |
City Manager’s Office |
Commission Meeting Date: 11-20-18 |
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Staff Contact: |
Britt Crum-Cano, Economic Development Coordinator |
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Actions Requested: |
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Conduct a public hearing to consider the Catalyst request from Screen-It Graphics of Lawrence, Inc. dba Grandstand Glassware + Apparel to assist with an expansion project at 3840 Greenway Circle in East Hills Business Park and vote on the following items related to the request:
· Adopt Resolution No. 7275, approving the project and making City findings of fact to meet state statute requirements for a property tax exemption.
· Adopt on first reading, Ordinance No. 9608, granting an exemption of certain property in the City of Lawrence from ad valorem taxation for economic development purposes.
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Executive Summary |
In April 2017, the City Commission approved the Catalyst Program, a program aimed at spurring economic development in East Hills Business Park and Lawrence VenturePark.
At the November 6, 2018 meeting, the City Commission publicly received an application from Screen-It Graphics of Lawrence, Inc. dba Grandstand Glassware + Apparel (Grandstand) for participation in the City’s Catalyst incentive program and set a public hearing date for November 20, 2018 to consider request and incentive package.
Company Background Grandstand manufactures and distributes decorated glassware, apparel, and promotional products nationwide and in 12 countries. Started in 1988 in Lawrence, the company has grown to 218 full-time employees with an annual payroll over $9,000,000.
In 2011, Grandstand purchased the former Sauer-Danfoss building and relocated operations from 2920 Haskell Ave to 3840 Greenway Circle in East Hills Business Park. At that time, the company received a 10-year, 65% real property tax abatement which will terminate in 2021. This relocation allowed the company to expand operations by purchasing additional equipment and inventory to align with the increased demand for Grandstand’s products.
Proposed Project With increasing product demand, Grandstand is now in need of additional manufacturing and warehousing space. The company is proposing an approximately 112,000 square foot expansion of their current facility located in East Hills Business Park at 3840 Greenway Circle, Lawrence, Kansas. With this expansion, Grandstand estimates the new space will accommodate up to 50 additional full-time employees over the next ten (10) years and invest in additional equipment to accommodate the company’s continued growth.
Construction on the expansion will be on company-owned land and is estimated to start early 2019 and be completed by the end of the same year. If approved through the Catalyst program, the building expansion would be eligible for a 10-year, 50% property tax abatement (70% if built to LEED Silver equivalency). This abatement will only apply to the expansion portion of the building and not the main facility. In addition, approval of a Catalyst abatement on the expansion portion will not affect the original tax abatement on the main facility.
Catalyst Package Request: The company is requesting a 10-year property tax abatement on a new addition to their existing facility located at 3840 Greenway Circle in East Hills Business Park in Lawrence, Kansas. Note the company is pursuing a sales tax exemption on construction materials through a State incentive program and will not be requesting Industrial Revenue Bonds (IRB) through the City
Next Steps: The City Commission to conduct a public hearing at their November 20, 2018 meeting to consider Grandstand’s request, and if appropriate, authorize the project to receive a tax abatement under the Catalyst Program through approval of Resolution No. 7275 and Ordinance 9608. Second reading of the ordinance will be scheduled for December 4, 2018.
If the request is approved, staff will draft a performance agreement with Grandstand, as required by the City’s economic development policy. The agreement, under the Catalyst Program, would be fairly straightforward as there are no job creation targets, wage or health insurance requirements. However, the City will want to ensure that the company pays its taxes that are due, is operating as a manufacturer in order to access the exemption, and that they cooperate with the City on their required annual renewals of the abatement during the 10- year period. Staff will return the performance agreement to the City Commission in the near future. |
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Strategic Plan Critical Success Factor |
Economic Growth and Security |
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Fiscal Impact (Amount/Source): |
The fiscal impact to the City of the Catalyst Program is positive but the exact amount is unknown until projects are constructed. Because the program only offers a partial property tax abatement, any new development will result in net positive tax base to the City and the other taxing jurisdictions. |
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Attachments: |
Catalyst Program Eligibility Sheet Application and Request Letter Resolution No. 7275: City Finding of Fact |
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Reviewed By: (for CMO use only) |
☐TM ☒DS ☐CT ☐BM |