6.5 Beck's Superior Hybrids Industrial Revenue BondsAGENDA SECTION
NO:
CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION DATE TIME
3/27/2023 4:00 P.M.
R
ORIGINATING ORGANIZATION: I FISCAL APPROVAL:
Salina Community Economic BY.
ITEM Development Organization FINAL A P OVAL:
NO: 5
Page 1 BY: Mitch Robinson, Exec Dir. BY:
ITEM: Background and discussion of advisability of the Issuance of $21,000,000 Taxable Industrial
Revenue Bonds (Project J.R.) and establishing a Public Hearing Date of April 10, 2023.
BACKGROUND:
On December 16th, 2021, the Salina Community Economic Development Organization (SCEDO)
was contacted by a Kansas City, Kansas based realtor seeking possible locations for a company to
locate 60 to 100 acres on an interstate for a distribution center location. The SCEDO and Jeff Maes
of Comp Pro Realty worked with the realtor for several months submitting sites suitable for the
company. On April 19th, 2022 seven representatives of Beck's Superior Hybrids of Atlanta, Indiana
flew into the Salina Regional Airport to meet with community leaders. Sonny Beck, CEO of the
company and his staff made a presentation concerning their company. The company is the third
largest seed company in the United States and the largest privately held company. The company is
expanding their business westward and was seeking a site for their distribution and sales
headquarters for Kansas. This would be their 9th state and their 19th location.
The company will sell, distribute and research corn, beans, wheat and sorghum to Kansas farmers.
The facility will be open 7am-5pm Monday — Friday and host customer events and farmer field days
for their dealers and customers. Several thousand people will visit the facility during these special
events. The company is also working with Kansas State University in testing of various seeds that
they will sell here in Kansas for Kansas crops.
On April 19th the company was shown numerous sites along Interstate 135 and Interstate 70 suitable
for their location. The company narrowed it down to two locations with the prime site located along
Interstate 70 off Ohio Street near Foley Equipment. The company was able to sign an option on
approximately 106.18 acres located at 1955 N. Ohio Street.
FUTURE GROWTH / JOB ESTIMATES / WAGE ESTIMATES:
The company expects to have this facility in operation in the fall of 2025 consisting of a 96,000 square
foot warehouse and sales offices. The facility is a showplace for the company and uses the same type
building for all their facilities.
Jobs number estimates for the first four years are: Year 1 — 2; Year 2 — 5; Year 3 — 2; Year 4 — 1. The
CEDBR impact study reviewed the jobs in year 1 and year 2 only. The year 3 and year 4 jobs were
added as part of a State of Kansas incentive program.
The pay for these positions range:
Average Wage (new jobs)
Year 1: $50.76
Year 2: $31.25
Year 3: $48.07
Year 4: $49.28
Median Wage (new jobs)
Year 1: $52.40
Year 2: $31.25
Year 3: $48.07
Year 4: $49.28
CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION DATE TIME
3/27/2023 4:00 P.M.
AGENDA SECTION ORIGINATING ORGANIZATION: FISCAL APPROVAL:
NO:
Salina Community Economic BY.
ITEM Development Organization FINAL APPROVAL:
NO:
Page 2 BY: Mitch Robinson, Exec Dir. BY:
SCEDO BOARD ACTION:
On November 22nd, 2022, a special board of directors meeting was called for the SCEDO to consider
issuance of Industrial Revenue Bonds for the Becks Superior Hybrids of Atlanta, IN. Company CEO
Sonny Beck and Facility Project Manager Caleb Bruner presented the company's plans for their
Salina location located adjacent to the Foley Equipment dealership on north Ohio Street. Mr. Beck
provided a review of the family-owned company and future development in the state of Kansas. The
company outlined the $21,000,000 facility, future jobs, and their pay range. In addition to the 10 jobs
there will be additional sales positions located across the state working with area farmers who will
make up the customer base.
The Board of Directors went into a 15 -minute closed session to review the financials aspects of the
project and went back into open meeting. On a motion by Frank Hampton, seconded by Max
Wellbrock-Talley the board approved a recommendation of a 10 -year, 100% abatement on property
tax and also 100% abatement on sales tax on materials used in the construction of the building. Aye:
(5). Nay (0). Motion carried. The recommendation then goes to City Commissioners for their final
approval.
INDUSTRIAL REVENUE BOND STEPS
State law on the issuance of Industrial Revenue Bonds (IRBs) requires either a city or county to issue
the IRBs. The process generally involves the following steps:
1) An independent consultant prepares a cost -benefit analysis to show an estimate of the costs
versus benefits of granting a sales tax exemption on construction and a property tax exemption for up
to 10 years.
2) Notice of a public hearing is published at least 7 days prior to the public hearing, and the city
mails notice of the public hearing to the county and USD covering the project location.
3) At a regular City Commission meeting, a public hearing is held followed by the consideration of a
resolution of intent describing the company to own the project, cost of the project and the level of
property tax abatement up to 10 years and 100%.
4) Company then proceeds with construction of the project.
5) Near completion of the project, bond counsel will draft an Ordinance and relevant bond
documents for the issuance of the IRBs. The Ordinance will be considered by the City Commission,
and if passed, the IRBs will be issued.
FISCAL NOTE:
The Wichita State University's Center for Economic Development and Business Research (CEDBR)
completed an economic impact analysis for the industrial revenue bond process. Attached are the
AGENDA SECTION
NO:
ITEM
NO:
Page 3
CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION DATE TIME
3/27/2023 4:00 P.M.
ORIGINATING ORGANIZATION
Salina Community Economic
Development Organization
BY: Mitch Robinson, Exec Dir
FISCAL APPROVAL:
BY:
FINAL APPROVAL:
CEDBR Impact Studies for an estimated $21,000,000 million bond project The project is expected
to be completed in the Fall of 2025.
City of Salina Tax Abatement $1,370,340
Salina County Tax Abatement $1,790,190
State of Kansas Tax Abatement $ 967,500
District 305 Tax Abatement $ 1,018845
City of Salina Public Benefits — Costs — Benefit Cost Ratio
Public Benefit 10 -year period $1,597,135
Public Costs 10 -year period $1,119,175
Net Public Benefit
(Public Benefit minus Public Cost = Net Public Benefit) 1.43
Saline County Public Benefits -Costs -Benefit Cost Ratio
Public Benefit 10 -year period $1,588,882
Public Costs 10 -year period $1,462,072
Net Public Benefit
(Public Benefit minus Public Cost = Net Public Benefit) 1.09
State of Kansas Public Benefits -Costs -Benefit Cost Ratio
Public Benefit 10 -year period $3,796,531
Public Cost 10 -year period $ 802,884
Net Public Benefit
(Public Benefit minus Public Cost = Net Public Benefit) 4.73
School District 305 Public Benefits -Costs -Benefit Cost Ratio
Public Benefit 10 -year period $1,146,276
Public Cost 10 -year period $ 851,715
Net Public Benefit
(Public Benefit minus Public Cost = Net Public Benefit) 1.35
MOTION REQUIRED
Proceeding with authorization and issuance of Industrial Revenue Bonds requires publication of
notice for a public hearing, preparation of a resolution of intent/advisability and providing notice to the
County and School District. Staff is prepared to proceed as directed by the City Commission.
COMMISSION ACTION OR RECOMMENDED ACTION:
Staff has identified the following options for the City Commission's consideration:
AGENDA SECTION
NO:
ITEM
NO:
Page 4
CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION DATE TIME
3/27/2023 4:00 P.M.
ORIGINATING ORGANIZATION
Salina Community Economic
Development Organization
BY: Mitch Robinson, Exec Dir
FISCAL APPROVAL:
BY:
FINAL APPROVAL:
BY:
1.) Approve a motion instructing staff to proceed with the necessary preparation for the City
Commission to initiate Industrial Revenue Bond Financing for Becks Superior Hybrids of
Atlanta and set a Public Hearing Date for April 10th, 2023.
2.) Postpone consideration of this matter to a specified date and time and provide staff direction
regarding additional information or amendments the City Commission would like to request
for further consideration.
3.) Vote to deny Industrial Revenue Bond financing for Becks Superior Hybrids of Atlanta.
Staff recommends Option # 1
Attachments:
- City of Salina IRB Application
- Wichita State University CEDBR Impact Study