5.1 Great Plains Property Tax ExemptionCITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION DATE TIME
4/2/2012 4:00 P.M.
AGENDA SECTION ORIGINATING DEPARTMENT: APPROVED FOR
NO: 5 AGENDA:
DEVELOPMENT SERVICES
ITEM PLANNING
NO. 1 BY: Dean Andrew BY:
Page 1
ITEM: Resolution No. 12 -6890
Consideration of application for property tax exemption submitted by Great Plains Manufacturing, Inc.
BACKGROUND:
Great Plains Manufacturing, Inc., a manufacturer of agricultural and landscaping equipment, has filed
an application for property tax exemption pursuant to the city's ad valorem tax exemption policy for
economic development purposes. Great Plains Manufacturing is requesting a tax exemption for an
estimated $3.5 million in proposed building improvements as part of an expansion of their operations
at the main Great Plains Manufacturing campus at 1525 E. North Street. Specifically, the project for
which Great Plains Manufacturing is seeking a tax abatement is a proposed 63,600 sq. ft. addition to
what is referred to as Building S5. (see attached campus map). It is anticipated that this expansion
will result in the creation of 21 new jobs. This type of business (manufacturing) and the proposed
improvement (major building addition) are eligible for exemption under state law and the City's tax
exemption policy. A change in state law automatically exempts new machinery and equipment
purchase from property taxes so it is no longer part of the local property tax exemption formula or
process. A similar exemption application for a proposed expansion of S5 was approved by the
Commission in 2008 but the addition was never constructed due to the economic downturn and the
application expired.
The Great Plains Manufacturing campus is located in the city's Special Redevelopment Area (SRA)
and this project is also eligible for SRA incentives, including a waiver of building permit fees. This
project is also eligible for Enterprise Zone benefits which include a state administered sales tax
exemption on building materials and equipment.
Prior to granting a tax exemption, the governing body is required by state law to analyze the costs
and benefits of the exemption, establish a procedure to monitor compliance with terms and
conditions, notify affected taxing districts and conduct a public hearing on the granting of the
exemption. Notice of this public hearing has been duly advertised and notification of this request was
provided to Saline County and USD No. 305, whose tax levies would also be exempted if this request
is approved.
FISCAL NOTE:
Assuming of capital investment and the creation of 50 new jobs, a tax exemption for the addition of
100% during years 1 — 5 and 50% during years 6 — 10 would result under the City's adopted policy
formula. The actual exemption will depend upon actual capital expenditures and jobs added
prior to project completion. Based on these figures, the amount of property taxes exempted over
the first 5 years of the exemption would be 100% of the taxes otherwise due. This would be reduced
to 50% in Year 6. After 10 years, the entire project would become fully taxable.
A more detailed breakdown of the costs and benefits of the requested exemption is attached.
The investment and job creation
Great Plains exceeds the amount needed to be eligible
AGENDA SECTION
NO: 5
CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION DATE TIME
4/2/2012 4:00 P.M.
ORIGINATING DEPARTMENT: I APPROVED FOR
AGENDA:
DEVELOPMENT SERVICES
ITEM PLANNING
NO. 1 BY: Dean Andrew BY:
Page 2
for a 100% exemption. The attached spreadsheet shows the eligibility if there were no 100% cap
COMMISSION ACTION:
Following closure of the public hearing, if the City Commission wishes to approve this tax abatement
request, it should adopt the attached resolution granting a property tax exemption to Great Plains
Manufacturing, Inc. for this expansion project at their North Street campus.
Encl: Application and Supporting Materials
Resolution #12 -6890
cc: James Hall, Great Plains Mfg.
Dennis Lauver / Larry Powell, Salina Chamber of Commerce
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APPLICATION
MATERIALS
Ckyof
City of Salina
P.O. Box 736
S Salina, KS 67402 -0736
CITY OF SALINA, KANSAS
APPLICATION FOR PROPERTY TAX EXEMPTION
ECONOMIC DEVELOPMENT PROJECT
APPLICANT INFORMATION
1. Applicant Business Name and Address:
Note: Attach the name and address of principal owners and officers of the business.
Roy Applequist —Owner, President, CEO
Linda Salem — Chief Operating Officer
Curt Carpenter — Vice President of Finance
2. Name, address and telephone number of contact person:
James Hall - Director of Real Estate, 1525 E. North St, Salina, KS 67401, 785 - 826 -0288
II. BUSINESS INFORMATION
1. Type and nature of applicant's business:
Manufacturer of agricultural and landscaping equipment. See attachment
Note: Attach a general description of business history and experience.
2. Is this a new business or an expansion of an existing business?
Expansion of existing business
3. Principal competition in local market; if any:
None
(PLF - 067 Rev. 12/04
III. PROJECT INFORMATION
1. Location of the proposed project; (local address or legal description).
1720 Dewey, Salina, KS- part of the Great Plains Mfg, Main Campus
2. Name and address of the owner of the land and building to be occupied by the
business:
Land Owner - GPM No 1 LLC, P.O. Box 5060, Salina, KS 67402
Building Owner — Great Plains Manufacturing, Incorporated, P.O. Box 5060, Salina, KS
67402
3. General description of proposed project:
Construct an additional 60,000 s.f. of production space
Note: Attach a site plan showing existing and proposed buildings or improvements.
4. Are Industrial Revenue Bonds planned for any of the project financing?
Yes _X —No.
5. Estimated capital cost of project:
$ $3.5 Million (Buildings and Improvements)
$ n/a (Machinery and Equipment)
6. Number of existing (full -time equivalent) employees: 876
Note: If an existing business, attach the average total monthly employment figures for the past
twelve months.
7. Number of new (full -time equivalent) jobs to be created: 91 (see attached)
Note: Attach a listing of the number and type of new jobs to be created by the project.
(PLF - 067 Rev. 12/04
IV. TAX EXEMPTION INFORMATION
1. Amount or percentage of tax exemption requested; (subject to City Policy Resolution).
2. Why is the tax exemption being requested?
See attachment IV 2
Note: Attach a supporting statement explaining why the requested tax exemption is a critical factor
in determining whether the proposed project is to be completed or to the success of the project in
Salina, Kansas.
V. APPLICANT CERTIFICATION
I certify that the above information and statements are true and correct to the best of my
knowledge and belief. I understand that this information will be available for public
inspection under the Kansas Open Records Act. I further understand that failure to
produce the stated economic benefits may result in a reduction or loss of tax exemption.
Furthermore, I certify that the requested tax exemption is a critical factor in the
achievement of the stated economic benefits and, if not granted, could prevent the
realization of the business location or expansion.
Signature
Vice President of Finance
Title
J/x // 1i
Date
Note: For further information contact:
City Manager's Office (785) 309 -5700
(PLF - 067 Rev. 12/04
City Planning Office (785) 309 -5720
Chamber of Commerce (785) 827 -9301
(PLF - 067 Rev. 12/04
Attachment II 1.
Great Plains Manufacturing, Inc. was established in Salina in 1976. From its beginnings as a small
manufacturing shop, it has grown to one of the largest privately owned agricultural manufacturers in the
United States, with multiple plant locations throughout Central Kansas, and a global market serviced
through a network of over 1500 dealers /distributors. Great Plains is a manufacturer of seeding,
planting, spraying, and tillage equipment. Great Plains, under the name Land Pride, is also a
manufacturer of landscaping /finishing equipment. Great Plains also operates Great Plains Trucking, a
fleet of motor carriers, and Great Plains Acceptance Corporation, which provides product financing.
Great Plains is recognized as a premier employer in Salina, with a history of outstanding corporate
citizenship, and has invested heavily in expansion in the community.
Attachment 111 6.
Year
Month
Total Employees
Project Facility
Total Employees
State
1
2011
JANUARY
827
880
2
2011
FEBRUARY
836
889
3
2011
MARCH
842
896
4
2011
APRIL
846
900
5
2011
MAY
850
905
6
2011
JUNE
863
918
7
2011
JULY
886
941
8
2011
AUGUST
892
947
9
2011
SEPTEMBER
893
948
10
2011
OCTOBER
918
973
11
2011
NOVEMBER
931
986
12
2011
DECEMBER
932
986
Total 10,516 11,169
12 Month Average 876 932
Attachment III 7.
The new employees will serve in a variety of functions, including production, warehousing, and
administrative positions.
Attachment IV 2.
Great Plains Manufacturing, and its owner, managers, and employees, have had a strong economic
influence on this community. Great Plains Manufacturing has been an outstanding corporate citizen,
with senior management taking active leadership roles, and employees that continue to be active in the
community through many organizations.
Great Plains Manufacturing is currently preparing to undertake a large expansion project, with capital
investments of 3.5 million in construction of over 60,000 sq. ft. of production space, and the hiring of an
additional 21 employees. This project will allow them to improve efficiency, and better serve their
customers and the agriculture sector. This project will provide a positive economic impact to the
community. This is another chapter for a company that has made tremendous capital investments in
Salina since its formation in 1976.
Considering the current economic climate in the U.S., with rising energy, manufacturing, and
transportation costs, economic incentives are vital to companies to help insure the success of their
expansion, and help them continue to be a premier manufacturer, employer, and corporate citizen in
Salina.
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