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City Hall report finds firms with tax abatements exceeding expectations
Perhaps you are like me and are still feeling a few aftereffects of consuming approximately 17 packages of hot dogs and a case of baked beans this Memorial Day weekend.
Well, there’s new a report out of City Hall, and although I’m not sure reading it will cure us, it won’t produce as much heartburn as our weekend did. The city has compiled its annual report on tax abatements and other economic development incentives, and the numbers generally are positive.
The city found all three companies that currently receive tax abatements from the city are meeting their targets when it comes to jobs, investments and wages paid.
In total, the three companies have made $7.3 million in real estate investments, up from $7.1 million projected; $10.3 million in equipment investments, up from $9.6 million projected; have used the abatements to hire 152 full-time employees, up from 141 projected; and paid an average wage of $36,226, up from $29,772 projected.
Here’s a look at each of the three companies:
• Amarr Garage Doors, a manufacturer in the East Hills Business Park, had 477 full-time employees in 2012, up from 340 prior to its tax abatement. As part of the abatement process, the company had committed to add at least 40 jobs. Average wages for full-time employees were $16.64 per hour, and 99 percent of positions had a wage that met or exceeded the community average wage for that type of position.
• Prosoco, an East Hills company that produces masonry cleaning and restoration products, had 67 full-time employees in 2012. Prior to the tax abatement, Prosoco had no Lawrence employees because it was based in Kansas City. As part of the abatement process, the company committed to bring at least 50 jobs to the city. Full-time employees had an average wage of $22.11 per hour, and 78 percent of positions had a wage equal to or above the community average for similar positions.
• Grandstand Sportswear & Glassware, an East Hills company that provides glassware and promotional products for the craft brewing industry, had 45 employees at the beginning of 2012. That was six fewer than the company had committed to as part of the abatement process. But the report notes the shortfall mainly is a result of timing. The company did not move into its new East Hills facility until December 2011. Once the company began operations in earnest at the new facility, employee totals grew to 71, which is 20 above its projection. The average full-time wage was $16.79 per hour, and 70 percent of positions had wages equal to or above the community’s average wage for similar positions.
In total, the three companies had $183,296 in property taxes abated in 2012. But since none of the companies are receiving 100 percent property tax abatements, they paid a total of $754,402 in property taxes for the year.
The report also provides details about other incentives besides tax abatements. One incentive that always gets questioned is the creation of special taxing districts. The city currently has two, with a third on the way. The Oread Transportation Development District, which covers The Oread hotel, has generated $321,000 in taxes from the special 1 percent sales tax since its inception in 2009. The Free State/Bauer Farm Transportation Development District, which includes the businesses on the northeast corner of Sixth and Wakarusa, has generated $141,000 since 2009 from its special tax. The third district will be for the new downtown hotel at Ninth and New Hampshire, which is expected to begin construction soon.
You can read the entire economic development report here. It is a good read for those with an interest in the world of incentives. Speaking of which, I could use an incentive to get through this day: A roll of antacids, perhaps.