Development agreement outlines capital investment, tax abatement for planned factory
A development agreement for a planned pet food factory in Tonganoxie would require the developer to make a capital investment of $250 million and hire at least 80 people, according to the proposed agreement between the company and the city.
Under the agreement, the city would sell 83.38 acres in the Tonganoxie Business Park to Hill's Pet Nutrition for $100. And the company will apply for property tax abatement for the factory for 10 years.
These are some of the details of a 34-page development agreement for the planned factory.
Members of the Tonganoxie City Council were scheduled to consider approval of the agreement Monday evening. The meeting took place after the press deadline for the Leavenworth Times.
The development agreement, which includes exhibits such as a map of the site of the planned factory, states officials with the city and pet food company acknowledge the project is not financially feasible without a public-private partnership.
Plans for the new pet food factory at the Tonganoxie Business Park were announced Friday in a news release issued by Hill's Pet Nutrition.
The Tonganoxie Business Park, which is owned by the city, is located at 222nd Street and Business Park Drive.
According to development agreement, Hill's Pet Nutrition plans to construct one or more buildings with at least 300,000 square feet. The agreement states the facility will include a "state-of-the-art, highly automated manufacturing and distribution facility for the processing, packaging and distribution of wet pet food, and industrial grade office space for employees."
Construction would begin within 90 days of the closing of the land sale. The project should be completed by March 31, 2024.
Of the 80 jobs that are promised in the development agreement, there would be 63 technicians and 17 professional support staff members. The average annual wage for the positions would be $60,625.
The agreement calls for the city to construct a 500,000-gallon elevated water tank.
According to an executive summary of the agreement, the estimated cost of the water tank is $2 million.
Hill's Pet Nutrition will purchase at least 36 million gallons of water per year from the city during the 10-year property tax abatement period.
Hill's Pet Nutrition will apply for a 100% property tax exemption for 10 years. This will not include taxes for the local school district and other property taxes that cannot be abated under Kansas law.
This would be a deviation from the city of Tonganoxie's tax abatement policy, which caps abatements at 70%. But the Tonganoxie City Council can waive the cap if there are compelling and unique circumstances, according to the executive summary of the development agreement.
The City Council will conduct a public hearing regarding the requested tax abatement no later than Oct. 4, according to the agreement.
The city of Tonganoxie has released a frequently asked questions document regarding the planned factory.
According to the FAQ document, no slaughtering or rendering of meat will take place at the factory. Meat will arrive at the plant frozen and leave the facility in cans. The factory should not produce any unpleasant odors. It is anticipated between 12 and 16 trucks would come to the plant each day, and the same number would leave the facility each day.