8.5 EDX Salina Vortex
CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION
DATE
3/07/05
TIME
4:00 P.M.
AGENDA SECTION
NO:
ITEM
NO.
Page 1
ORIGINATING DEPARTMENT:
APPROVED FOR
AGENDA:
8
CITY MANAGER
DENNIS KISSINGER
5
BY:
-
ITEM:
(a)
(b)
Acknowledge receipt of applications from the Salina Economic Development Corporation
(SEDC) and Salina Vortex requesting an economic development property tax exemption for a
proposed manufacturing facility and machinery and equipment to be located at 1725 Wertz
Street in the Airport Industrial Center, and consider preliminary determinations.
Consider a Resolution authorizing a deviation from the City's Policy Resolution as to eligibility
related to timing of facility construction and equipment purchase.
BACKGROUND:
The City of Salina, by Resolution 91-4265, has adopted policies and procedures related to granting of
property tax exemptions for economic development projects as allowed by the Kansas Constitution.
The Salina Economic Development Corporation and Salina Vortex have notified the City of their intent
to apply for a constitutional tax exemption for a new manufacturing facility that would house all of
Salina Vortex's operations in Salina. They are requesting an initial determination of eligibility for a tax
exemption under the Kansas Constitution and the City's adopted policies.
As proposed, the Salina Economic Development Corporation would purchase land and construct a
new building on the west side of Centennial Road between Water Well Road and Wertz Street (to be
addressed as 1725 Wertz Street). Salina Vortex would move its operations from the current location
at 3024 Arnold Road to the new facility. This relocation and expansion will also involve the purchase
of new equipment by Salina Vortex. The new equipment may be purchased prior to completion of the
new facility, and put into use at the current Salina Vortex facility in Salina.
The applicants indicate that the new facility and equipment will provide the need space and updated
technology to allow Salina Vortex to be a global leader in dry bulk handling material.
CITY MANAGER PRELIMINARY DETERMINATIONS:
2.
1.
The proposed projects meet the requirements of Article II, Section 13 of the Kansas
Constitution for property tax exemption as facility and equipment to be used exclusively for
manufacturing purposes.
The proposed projects meet the standards established in Resolution No. 91-4265, the City's
Policy Resolution for granting economic development tax exemptions, with the exception of
Section 4.D.2 of the Policy Resolution.
CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION
DATE
3/07/05
TIME
4:00 P.M.
AGENDA SECTION
NO:
ITEM
NO.
Page 2
ORIGINATING DEPARTMENT:
APPROVED FOR
AGENDA:
8
CITY MANAGER
DENNIS KISSINGER
5
BY:
3.
4.
5.
6.
Section 4. D.2 of the Policy Resolution restricts eligibility of buildings for which construction has
commenced, and restricts the eligibility for equipment purchased prior to the final determination
and granting of the tax exemption. The requirement to wait until the tax exemption is granted
before applying for a building permit or purchasing equipment presents timing complications.
Due to the planned facility being owned and constructed by the SEDC, and the equipment
being purchased by Salina Vortex, separate applications are being filed. City staff considers
these as "companion projects". There is a plan and likelihood that prior to or at completion of
the facility construction project, the property will be acquired by Salina Vortex. If that action
occurs, City staff would recommend the two separation applications (SEDC for facility; Vortex
for equipment) be replaced with a "merged" application, treating this as one project.
Considering that possible occurrence, staff believes it is in both the public and private interest
to defer the performance of the cost benefit analysis and the required public hearing,
resolutions, etc. until later in the project timeframes when more information is available about
whether and how a property transaction may take place.
Salina Vortex preliminarily projects $1,750,000 in equipment purchases, with 3 new jobs
created, due to the equipment purchased.
Salina Economic Development Corporation projects $3,850,000 in new facility construction at
1725 Wertz Street, with an additional 2 new (Salina Vortex) manufacturing jobs created, due to
the new facility construction.
Preliminary analysis of tax exemption percentages:
. If the $1,750,000 equipment project and $3,850,000 facility project are ultimately combined
into one larger capital investment project with 5 total jobs or more, it is likely the project
would qualify for 1000/0 exemption in years 1-5, and 500/0 in years 6-10, in accordance with
established formulas. If for some unexpected reason the applicants choose to process the
equipment and building components as separate projects, a strict application of the City's
formula would result in a lower percentage of exemption for each component. In that
unlikely case, city staff would recommend the Commission consider a formula modification
in these cases.
In accordance with the City's formula, the baseline of existing jobs is 87 (12 month average).
The final determination of tax exemption percentage will be based on actual capital investment,
and actual job creation above the 87 employee baseline.
CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION
DATE
3/07/05
TIME
4:00 P.M.
AGENDA SECTION
NO:
ORIGINATING DEPARTMENT:
APPROVED FOR
AGENDA:
8
ITEM
NO.
Page 3
CITY MANAGER
DENNIS KISSINGER
5
BY:
RECOMMENDED ACTION:
(a) Acknowledge receipt of the companion economic development tax exemption applications from
the Salina Economic Development Corporation and Salina Vortex.
(b) Concur with the City Manager's preliminary determinations related to the proposed project, as
outlined above.
(c) Authorize and direct City staff to assure the cost-benefit analysis, public hearing notice,
consideration of the tax exemption resolution (triggering the 18-month project review period under
Section 8 of Resolution No. 91-4265), and other required steps are completed at the appropriate
time as this project progresses, leading to the goal of project completion and tax exemption final
action no later than January 2007.
(d) Approve Resolution No. 05-6163 granting a deviation from Section 4.D.2 of the City's Policy
Resolution.
CitH of
-"
~
..~~
Salina
City of Salina
P.O. Box 736
Salina, KS 67402-0736
CITY OF SALINA, KANSAS
APPLICATION FOR PROPERTY TAX EXEMPTION
ECONOMIC DEVELOPMENT PROJECT
I.
APPLICANT INFORMATION
1. Applic;ant Business Name and Address:
Salina Vortex Corp.
--~ ..-- --~- ~- - -- --- . ------ --- -- --,- ~. --- ------~."--,,.~-~~--"'..<-m--' ~-~-,"",",'-,o-""""'"~-~'~~"'.'~N,'" - - -- -- - ~'._.~ - .-- -- - -- -- - -'- -"'-~~'~V"--""'-..'M__'_'.""" -
Note: Attarch the name and address of principal owners and officers of the business.
2. Name, address and telephone number of contact person:
Jeff ThoITlpSOn, 3024 Arnold Avenue, Salina, KS 67401 785-825- 7177
--...".-- - ~---- . -~-_.~"_..__.~~~,,-.._.,,~,,,.._,,_..... -~----- -. . --_._~ ~. - -.- -- ---~ ----,"~-,.'~~",-.' ...~-- ---~ _.. - --.- - --.------ -- ----. ----"--'~'-_."'_'.'_M"""_'-
II.
BUSINESS INFORMATION
1. Type find nature of applicant's business:
Salina Vortex manufactures and distributes slide gates and valves for handling dry bulk
material. Salina Vortex currently has 16 product lines encompassing over 700 standard
sizes and configurations. Salina Vortex valves are used in all fifty states, in all of North
America 81nd in twenty-two foreign countries. The company employs over 90 people in
Salina, its only facility. See attached two documents outlining the Company's history and
a recap of a speech given on who Salina Vortex is and how it impacts our lives.
._--~-"----, _.._-,----_c_.~"..,;--.,.._---.~~,-~----~...,,~,-- - - . ~,--_u.._---_._---_u,.~-_._-,..~--~---~,~~..~..__.._--,~-~~_"~__,_n._.___._----,,-," -.. - .-
Note: Attach a general description of business history and experience.
2. Is this ;a new business or an expansion of an existing business?
This is an expansion of new equipment. Salina Vortex intends to move from its current
. location at 3024 Arnold into a new, larger facility by the end of 2006. That facility (1725
Wertz StrE~et), coupled with the new equipment, will provide for the necessary size and
technolog)1 to allow Salina Vortex to be a global leader in dry bulk handling material.
'__'_-"~_.~~_,-.-~r_.".._._--~._~ ~_. - -- -- --- - -- -- -~ ~"-,"~--_.-~""---_W"~",,,,~."~,'",- - .- - _.- --- . .. - - -- - ..- - -'- - - .. ,- - -- -- -- ~-' - - - - -"-'.-'-'-~-"---,.~ - -- - -. - ~.""'.d.'.-
SVC App for tax
1
3. Principal competition in local market; if any:
None. Premier Pneumatics has similar capabilities, but is more of a customer than a
com petit()r.
III.
PROJEC:T INFORMATION
1. Locatiion of the proposed project; (local add ress or legal description).
The proje~ct is to begin on June 1, 2005. The proposed equipment will be bought and
installed ()ver the following 18 months. Timing is such that some equipment will need to
be tested and personnel trained on that new equipment at the current facility located at
3024 Arnlold, while other pieces of equipment will be installed directly into the new
proposed facility at 1725 Wertz Street, Salina, KS 67401 .
2. Name and address of the owner of the land and building to be occupied by the
businE~ss:
Salina Vortex Corp.
30:24 Arn old Ave.
Salina, KS 67401
3. General description of proposed project:
As menticlned above, the proposed equipment acquisition project is being done in
conjuncticÞn with the building of a new facility that will eventually house all of Salina
Vortex's o'perations. The combined project is projected to begin on June 1, 2005. Of the
projected $1,750,000 in equipment purchases, approximately $1,300,000 for a laser, a
press breé:lk, a router, and a lathe will be key to manufacturing Vortex valves in a
completel~~ new and innovative process. This new process, which will include patented
applications, will revolutionize the manor in which the traditional valves are made,
effectively making Vortex's (and the competition's) old designs obsolete.
Additional equipment needs will be related specifically to the needs of the new facility
including (in overhead crane, HVAC, lighting, etc.
Note: Atta(~h a site plan showing existing and proposed buildings or improvements.
4. Are Industrial Revenue Bonds planned for any of the project financing?
Ye~s X No.
- -
SVC App for tax
2
5. Estimated capital cost of project:
$
1\1/ A
(Buildings and Improvements)
$ -t~[5Q~OO 0
(Machinery and Equipment)
6. Number of existing (full-time equivalent) employees:
87 = 12 month avg
94 = cu rrent FTE
Note: If a{"¡, existing business, attach the average total monthly employment figures for the past
twelve mo~rJths.
7. Number of new (full-time equivalent) jobs to be created:
3
Note: Attach a listing of the number and type of new jobs to be created by the project.
IV.
TAX EXEMPTION INFORMATION
1. Amount or percentage of tax exemption requested; (subject to City Policy Resolution).
As per City policy
- "-
2. Why is. the tax exemption being requested?
This expansion is vital to securing Salina Vortex as a competitive player in the global
market for several generations. The requested tax exemption would provide a key
component of economic advantage to allow Salina Vortex to continue to create valuable
jobs and c~ommerce in the City of Salina and the State of Kansas. The proposed new
location will also provide ample room for growth allowing Salina Vortex to keep its core
operations in Salina for the foreseeable future.
Note: Attach a supporting statement explaining why the requested tax exemption is a critical factor
in determin.ing whether the proposed project is to be completed or to the success of the project in
Salina, Kan.sas.
SVC App for tax
3
v.
APPLICJð.NT CERTIFICATION
I certify that the above information and statements are true and correct to the best of my
knowled~~e 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.
Furthermlore, I certify that the requested tax exemption is a critical factor in the
achievenlent of the stated economic benefits and, if not granted, could prevent the
realization of the business location or expansion.
"'.- '... "~. .'
;- ~. ~ "', ~t ..~ .
'. IJ ' >
., .; 1 /'
Title {.t!rù¡f . "'H<'_"~~í-;'¡ ~'t<>.-;
c2/1 ~ I o.S-
j
Date
.'~--
Note: For further information contact:
City Manager's Office (785) 309-5700
City Planning Office' (785) 309-5720
Chamber of CommE~rce (785) 827-9301
SVC App for tax
4
Attachments
1) Below are the name and address of principal owners and officers of the business:
Owner - Llee Young, 3324 S Simpson Road, President & CEO
Owner - John Peterson, 2300 Falconview Dr, Secretary
Officer - Jc~ff Thompson, 2474 Glencoe Circle, CFO & VP Finance & Administration
2) Attached is a short Company History. of Salina Vortex. Also is attached a presentation called "What is Salina
Vortex?" that has been used to describe how its products impact each and every one of our daily lives.
3) Below are the last 12 months employment figures for Salina Vortex and the 12 month average:
Salina Vortex Corp
HeadcoW1t Analysis
Date
2/28/2004
3/31/2004
4/30/2004
5/31/2004
6/30/2004
7/31/2004
8/31/2004
9/30/2004
10/3 1/2004
11/30/2004
12/31/2004
1/31/2005
12 month average
FTE
80
81
82
83
88
86
86
88
91
92
94
94
87
4) Below is a listing of the number and type of new jobs to be created by the project:
a. 1 = Lathe operator
b. 1 = Laser operator
c. 1 = Router operator
Total nf~W jobs = 3
SVC App for tax
5
S alin.a Vortex Corp.
Com-pany History
Neil Peterson, a design engineer, started Salina Vortex at its present location
at 3024 Arnold Avenue during December 1977. His purpose and dream was
to design and manufacture innovative and problem solving equipment for
conveying dry materials. The early years were difficult and filled with
product failures and financial concerns.
In 1980 hard work and perseverance paid off. The company was awarded a
patent on its new Orifice Gate. This valve could successfully handle dry
materials in gravity flow or dilute phase pneumatic conveying systems. That
same year Chemical Processing Magazine awarded the Orifice Gate its
"Vaaler Award" - judging it a major contributor toward more efficient and
effecti ve operation of plants in the chemical processing industry.
The years between 1980 and 1989 saw more new product developments SUCll
as the unique Wye Line Diverter, Salina Roller Gate and patented Clear
Action Gate. Each new product added more dimension to the capabilities of
the Salina Vortex lille of gates and valves. Throughout these years the
marketplace slowly accepted these innovative products as real problem
solvers for handling dry materials.
In 1989 the company was positioned to undertake an aggressive marketing
and selling effort with the now proven products. The developmellt of awards
winning literature, strategic advertising and a unique sales approach using a
mobile product demonstration trailer to aid and assist the company's
representative network facilitated the rapid grovvth of the company during the
1990's.
The 3,500 square foot addition in 1987 and 2,400 square foot addition in 1989
to the original 5,000 square foot building weren't enough to keep up with the
dramatic production increases of the 1990's. A 23,300 square foot addition
was made in 1993 and another 26,000 square foot addition was begun in late
1997.
Coupled with the expansions in the early 1990' s, the company invested
heavily in state-of-the-art computer numerically controlled (CNC) production
equipment. In house, leading edge computer software programs were
developed to effectively control manufacturillg processes using efficient "just-
in-time" inventory control techniques. The totally integrated and networlced
computers give personnel access to "real time" information providing for
timely decision making.
- . . .
Salina Vortex Company History.DOC
1
Salina Vortex recently earned the Innovation in Powder / Bulk Technology
Award, was a finalist in the Kansas Exporter of the Year Award, was awarded
the Kansas Society of Professional Engineer's Governor's New Product
Award.and most recently was recogllized by Ernst and Young as an
Entrepreneur of the Year Company. The success of our products within
various industries 11as been featured in many national and international
publications.
A company philosophy, whicll includes willingness to work with special
customer needs and an overall positive attitude regarding the importance of
timely customer service, has been major keys to Salina Vortex's growth and
success. These, coupled with irmovative profit sharing programs, generous
employee benefit plans and a "growth oriented" employee development
program have all contributed to the success of Salina Vortex Corporation.
Currently Salina Vortex gates and valves are being used in all fifty states, ill
all of North America and in twenty-two foreign countries. Salina Vortex
employs over 90 people at our plant in Salina, Kansas.
Salina Vortex Company History.DOC
2
What Is
Salina VORTEX?
As explained by company president Lee Young
"Many people ask: '\Vhat does Salina Vortex process was environmentally safe. It was made
do?' The answer can create more questions than safe by a paint overspray collection system made
it answers. The following nalTative will help you possible by unique valves made in Salina.
understand what we do and how we are a part of As you get into your car you think those new
your daily life. tires should give you plenty of traction on the wet
At Salina Vortex, "We don't make the streets this morning--their n1anufacture made
products, 'rVe help make them better." We help possible by special valves for handling carbon
our customers make their products more black.
efficiently, with less cost, providing a cleaner Driving to work you think about your full day
environment and a safer work place. We as you listen to your new compact disk, not
manufacture slide gates, diverter valves and iris lmowing the aluminum disk and its
valves for controlling the flow of dry bulk polycarbonate coating were processed using
materials ranging from valves as small as 5/8" in diverter valves and gate valves from Salina,
diameter to as large as 72" square. Kansas. As you drive to work you pull several
We are unknown to you, but a part of your photo copies of today' s itinerary from your brief
daily life. \Vhen you awoke this morning you case, reading as you drive but not knowing how
pro bably slept on a mattress filled with fiber fluff the copy toner was "manufactured using a Salina
processed by a company using our products. produced product.
You jumped into the shower and turned on a You pull up into your parking place at work,
faucet made by a manufacturer who required step out and breathe in the morning air, thinking
large damper valves made in Salina for dust it's great to live in Kansas with its fresh air and
control in their foundry. You reached for that not noticing an Environmental Protec~ion Agency
bar of soap made by a company who used our aircraft passing overhead with a Salina Vortex
gate valves to' meter the flow of phosphates into diverter valve in its nose cone collecting air
their manufacturing process. quality samples for testing.
After that refreshing shower you then walked As you can see, before you get to work people
into the kjtchen for that fIrst cup of coffee in Salina have worked hard to make your day a
specially blended with the use of our patented better one!"
gate valves with dribble feed controls. You don't
like your coffee black so you stirred a sweetener
into your coffee, took a bite of your Danish and
smelled the aroma corning from your hot
oatmeal, aU processed using our valves.
As you .walked out the front door you noticed
how nice your new floor tile looked, not lmowing
that someone in Salina played a part in its
manufacture. It snowed last night and you
noticed tht~ side walk was slick; not thinking
about the fact the cement came from a company
who needed a gate valve to shut off the flow of
potash used. in its manufacture.
The co ld morning air hit your face and it
made you glad you took your antibiotic last
night, not knowing that a special all stainless
steel valve 'was needed in its manufacture.
You hurry out to your new car and admire its
paint job and wonder how they can make it look
so goQd_. and .ma~be_wDnder .. if- the . painting
*
*
*
*
*
*
*
Salina Vortex culTently has 16 product lines
encompassing over 700 standard sizes and
configurations which can be modified over 500
million different ways to meet customer's needs.
Salina Vortex cuITently provides job
opportunities for 90 families living in the Salina
area.
For further infonnation contact:
Salina Vortex Corporation
3024 Arnold Avenue
Salina, Kansas 67401-8105
785.825.7177 FAX 785.825.7194
www.salinavortex.com
-
. - --.:iN,
r t - - - - - - - - - -"""""
I I
, !
I I
,
\ I
I I
: I
! I
I I
, I
I I
: I
I !
I :
I \
I;:~P~
~ \~
~I §
~, I~ ,
&:"! w 88
\§ I 8
, I
I I
. I
I !
I \ 13
!
I
I I
I !
I I
I
\ I
I 1
\
I I
: I
I I
I I
\
I I
: I
\ I
, \
I I
L+.-=-~-=,
L-
....J
....J
W
3=
Cr::
W
f--
«
3':
I
--'-"- -',
-~-t
I
I
I
I
I
I
¡
¡
SCANLAN ,AVE.
ERTY UNE:, - , . -
- P~OP ---Š-OO: 09'02' (
, - ,. 61 $.+0
N AREA
E EXP ANSIO
FUTUR
N AREA
RE EXP ANSIO
FUTU
.
000
000 '
~ f (- ,
"',' ~
, 10~ ~
-
~';TL
I 5J-Df'E1t G
t ~NG
! I
I I
I
!
I . >t
I I:
'",
,OQ
~1 ~I~
~I ¡:
~ 15
~! ~.!~.
w <5
N
. I I
I
I I
I
j I
I
I
I
I
I
!
~¡:
I I
!
I I
I
--+J
D~~~~¥IO~A ;~~D
T UN(
(ASE~ -
ERTY UN( - - 'E' -
PROP - s 60- 09'02
' ---š9õ,66'
-
CENTENNIAL RD.
-,,-,
PARKING COUNT: 176
'II
SITE PLAN S~:2H
@ (
r
City of Salina
P.o. Box 736
Salina, KS 67402-0736
Salina
CITY OF SALINA, KANSAS
APPLICATION FOR PROPERTY TAX EXEMPTION
ECONOMIC DEVELOPMENT PROJECT
I.
APPLICJ~NT INFORMATION
1. Appli(~ant Business Name and Address:
Salina Economic Development Corp. (SED C)
-- "",' , '--~' '--- -----'-- ---- " " ----,~,,-'~,'m,'w,',',,~""""~"'-'-' ,
, - -, ,
, ,
, -
-, .. - " "- , -' '" , ',^",','~w,'m','V,'.~,wm~,W,'~',Wu,'"_w,',,".,',,,',',,'^
Note: Att~lch the name and address of principal owners and officers of the business.
2. Name~, address and telephone number of contact person:
SEDC = (3erald Cook, Executive Director, 129 W. Ash, Salina, Kansas 67401 785-827-
9301
,',' - - - --- ',..'. ~ - - - - -, - - - -, -- --, - .. - - - -, - - - - -- -- - .. - - - - -'~-,~=~",-^"~',',W - - - - - -
,--, , - - "'-
----oo-oo -,-- - --.', -,..
II.
BUSINE~)S INFORMATION
1. Type é:ind nature of applicant's business:
SEDC is in the business of assisting businesses currently located in Salina, Kansas, or
are interested in re-Iocating to Salina. In this case, Salina Vortex, a local company that
manufactures and distributes slide gates and valves for handling dry bulk material,
desires to construct a new manufacturing facility because its current facility has outlived
is utility. :3alina Vortex currently has 16 product lines encompassing over 700 standard
sizes and configurations. Salina Vortex valves are used in all fifty states, in all of North
America ctnd in twenty-two foreign countries. The company employs over 90 people in
Salina, its only facility. See attached two documents outlining the Company's history and
a recap 01= a speech given on who Salina Vortex is and how it impacts our lives. SEDC
desires to take the appropriate steps to construct the new manufacturing facility for Salina
Vortex and then transfer the completed facility to Salina Vortex.
,^,-'" '^,""",""'n,p,~'~~"m'-,"','"
"',",""w""""""'"","""",",""""',","""'"""""""",w""-""","""""_"""""""",,,^,,,""""',""','.,'-"~"""""','.'.,',""""""".""""~""",-,'.-.'.-",,,.. ""--"","""',",',","'>',,"""',',',,',,...,.....",-"""",-"""""".,."
Note: Attach a general description of business history and experience.
New Building - Application for Property Tax SEDC - clean.DOC
1
2. Is this a new business or an expansion of an existing business?
As state(j above, the construction would be a new manufacturing facility for Salina
Vortex. :Salina Vortex intends to move from its current location at 3024 Arnold into a new,
larger facility by the end of 2006. That facility (1725 Wertz Street), coupled with the new
equipment will provide for the necessary size and technology to allow Salina Vortex to be
a global leader in dry bulk handling material.
- - ""' - - - -" ~-"--- - -- ---<-.__.-- - my" . - - "-" - -- -
" "
- -.
- - "N"'.~<"""~ .... ..
" -. - "- "
3. Principal competition in local market; if any:
SEDC hals no local competition. Salina Vortex has no significant competition. Premier
Pneumatics has similar capabilities to Salina Vortex, but is more of a customer than a
competit()r.
III.
PROJECT INFORMATION
1. Location of the proposed project; (local address or legal description).
SEDC is in the process of completing the purchase of the property located at 1725 Wertz
Street, Séllina, KS, after which it will begin the construction process. The goal is to break
ground on the construction of th~ new building on or about June 1, 2005. The new
building should be completed by approximately August 2006.
2. Name and address of the owner of the land and building to be occupied by the
businE!ss:
Sallina Economic Development Corp.
Gerald Cook, Executive Director
12~3 W. Ash
Salina, KS 67401
<^"~----- - - --~~"-" - - -~" ~ - - - -- - - - "- -- -""-" - - "" - - -- ..- ""m~.....w<..m,"M."~-"."-.-
"- ---Y_---- ""-"--- --. -"","-----, --"-
~'"W"'"W"W~"'~M""'""""N<"._""~"
3. Generë31 description of proposed project:
As mentioned above, the proposed building construction project is being done in
conjunction with the acquisition of new equipment that will eventually house all of Salina
Vortex's operations. The combined project is projected to begin on June 1, 2005. The
projected building construction cost will be $3,850,000. Salina Vortex will procure an
additional $1,750,000 in equipment purchases. The design of the manufacturing process
coupled with the new equipment technology will be key to manufacturing Vortex valves in
a completE31y new and innovative process. This new process, which will include patented
applications, will revolutionize the maner in which the traditional valves are made,
effectively making Vortex's (and the competition's) old designs obsolete.
Note: Attach a site plan showing existing and proposed buildings or improvements.
New Building - Application for Property Tax SEDC - clean.DOC
2
4. Are Industrial Revenue Bonds planned for any of the project financing?
')/es X No.
- -
5. Estimlated capital cost of project:
$ 3 850 000
. - ,,--- - - ,- . '-
-__'__'H"_- -- ,-- -- (Buildings and Improvements)
$ ^^~--"-'~-----~~- -----' ----- -_.~w,^~~"m (Machinery and Equipment)
6. Numt)er of existing (full-time equivalent) employees: 87 = 12 month avg*
94 = current FTE*
*These figures are for Salina V o11ex, as the ultilnate owner and operator of the property
Note: If at1 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: 2*
*This figure is for Salina V o11ex, as the ultÎ111ate owner and operator of the property
Note: Atta'ch a listing of the number and type of new jobs to be created by the project.
IV.
TAX EXEMPTION INFORMATION
1. Amount or percentage of tax exemption requested; (subject to City Policy Resolution).
As per city policy
" -______n", , -- --' - ---- --- ~'"-,
- ~', -
.,','-".",",'-~",",'-'n'_.-., ..... - -
2. Why is the tax exemption being requested?
This expansion is vital to securing Salina Vortex as a competitive player in the global
market for several generations. The requested tax exemption would provide a key
component of economic advantage to allow Salina Vortex to continue to create valuable
jobs and commerce in the City of Salina and the State of Kansas. The proposed new
location will also provide ample room for growth allowing Salina Vortex to keep its core
, operations in Salina for the foreseeable future.
- , - - - -, - ~ n
-- -- '. '-- - - - - -- - -- - -,- ,
- ,
~ ....... .--"-^".'^~~~ð«'~_'""-"--""-"".",,.-,,,,,
Note: Atta(~h 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.
New Building - Application for Property Tax SEDC - clean.DOC
3
v.
APPLICJt:\NT CERTIFICATION
I certify that the above information and statements are true and correct to the best of my
knowled~~e and belief. I understand that this information will be available for public
inspectio,n 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.
FurtherrTlore, I certify that the requested tax exemption is a critical factor in the
achieven1ent of the stated economic benefits and, if not granted, could prevent the
realization of the business location or expansion.
Signature
.~~~ ..--.JJ-~" .
Title
-- ) - ~ P': -:' ~- :r - - - - -----__-___M_'____------ ----
Date
Note: For further information contact:
City Manager's Office (785) 309-5700
City Planning OfficE~ (785) 309-5720
Chamber of Commerce (785) 827-9301
New Building - Application for Property Tax SEDC - clean.DOC
~
"--Co< P---. - $...... ~
RESOLUTION NUMBER 91-~265
A RESOLUTION ADOPTING A POLICY FOR THE GRANTING OF
EXEMPTIONS FROM AD VALOREM TAXATION FOR ECONOMIC DEVELOPMENT
PURPOSES WITHIN THE CITY OF SALINA, KANSAS.
WHEREAS, Section 13 of Article 11 of the Kansas Constitution
authorIzes the governing body of any city to grant property tax exemptions for
certain economic development purposes; and
----
WHEREAS, the Board of City Commissioners has determined that,
under certain circumstances, the granting of property tax exemptions can be an
effective economic development tool; and
WHEREAS, state statutes require that the governing body develop and
adopt official poUcies and procedures prior to granting such exemptions; SO
NOW, THEREFORE
BE
IT RESOLVED
by
the Governing
Body of the City of Salina,
Kansas:
Section 1. Purpose. The purpose of these provisions Is to establish
the offici~pollcies and 'procedures of the City of Salina for the granting of
property ta>c: exemptions for real and tangible personal property used for
qualified economic development purposes under Section 13 of Article 11 of the
Kansas Constitution.
Section 2. Authority and discretion. The authority to grant tax
exemptlonS""\\rithin the -clty of Sanna is vested solely In the Board of CIty
Commissioners. The Board of Ci ty Commissioners is under no obligation to
approve any" requested exemptjon and reserves the right to deviate from the
policIes and criteria contained herein If circumstances exist to warrant such
deviation. Such circumstances may include, but not be limited to: (a) economic
development projects financed by means that substitute for industrial
development bonds for which' resolutions of Intent containing tax exemption have
prevIously bt~en' issued thus resulting In a reduction in the amount of the
resolution of intent; or (b) economic development projects which, due to their
unusual natu re or magni tude r offer extraordinary benefits to the community.
Section 3. NotIce and hearln. Prior to granting a tax exemption. a
public heàrln£J shall be he d y t e oard of City Commissioners. Notice of the
public hearin~;) sha II be published at least once seven (7) days prior to the
hearing and shall indicate the purpose, time and place thereof. The City Clerk
shall also notify in writing the governing body of Saline County and Unified
School District 305.
Section 11. Criteria for grantfn~tion. Each application for
property tax exemption sharrDe evaluat€:~accordance with the following
criteria:
A.
Demonstration of economic benefit. The Board of CIty
tommfš'"'saoners may consider g ranting said tax exemption
only upon clear and factual demonstration of direct
economic benefit. The project shall create additional
permanent jobs and increase private capital investment
in new plant and/or equipment.
B.
~reservatlon of existing tax ba~. I t Is the intent of
this poncy to promote expansion of the tax base and
ensure that the taxing districts having authority to
levy taxes. on the property affected wi II receive I in the
future, not less than the amount received prior to
granting the exemption.
c.
~e busInesses. In accordance with Article 11 of
t e ansas Constitution" a tax exemption wi II be
considered only for busInesses engaged in the followIng
activities:
1 .
Manufacturing articles of commerce;
2.
Conducting
research
and
development;
or
~~ "'- no ~ 1..,,0&("
3.
Storing goods or commodities which are sold
or traded In Interstate commerce..
D.
Ell Ihle ro ert. The Board of City Commissioners
may exempt rom ad valorem taxation all or any portion
of the appraised valuation of:
.1.
All newly constructed buildings or additions
to existing buildings used exclusively for
eligible business activities which Is necessary
to facilitate the formation of a new business
or expansion of an existing business if, as a
result of such formation or expansion I new
employment is created..
2.
All newly acquired or existing tangible
personal property used exclusively for el igible
business activities, except that no existing
tangible personal property located In the state
of Kansas may be granted an exemption
unless sa;d exemption is required I based on a
factual determination, to retain jobs in the
state of Kansas.
No exemption will be granted for the laf.'d
upon which qualified buUdlngs or building
addHions are located, existing buildings already
bui It, or any property rented or leased to outside
interests by other than a not-far-profit local
economic development corporation. No exemption
will be granted for buildings or building additIons
for which a building permit has been applied or
construction commenced before the date said
exemption is granted. No exemption will be
granted for any existing tangible personal
property located in the City of Salina nor any
newly acquired tangible personal property ordered
or purchased prior to the date said exemption is
granted.
In the event a not-for-profit local economic
development corporation constructs a new building
for an unidentified occupant, the minimum job
requirement shall be waived. No tax exemption
- shall be granted until occupancy by an eligible
business activity and project completion.
Section 5.
Amount and term.
A.
Base. exemption. An exemption may be granted for 25%
of the property taxes due for projects which Involve
new capital Investment and which create new permanent,
full-time jobs as follows: $100,000 of investment and 3
new jobs; $200,000 of Investment and 2 new jobs; or
$300 i 000 of investment and 1 new job ~
8.
.Incentive exem~¡on. Special consideration will be given
to increasing t e amount of tax exemption up to 100%
based on the following scale regarding the amount of
capital investment and number of new employees:
1 .
An additional tax exemption of 2.0% for each
additional new job (FTE) above the base minimum 6
2.
An addltiona I tax exemption for each additional
$15.000 of investment above the base minimum as
follows: $100,000 to $1 million - 0.3%; between $1
m III Ion and $ 2 million - 0.2%; above $ 2 million -
0.1%.
,(......Go<~ -- ""..... ...........
C.
Descendin scale. The calculated total tax exemption
wi e applie according to the following scare:
Years 1 thru 5
Years 6 thru 10
100%
~O%
D.
Term of exem~. No tax exemption shall be in effect
for more than 0 years after the calendar year In which
the business commences operations or completes an
expansion. Any appllcan t receiving a tax exemption
shall be required to make payments in lieu of taxes
equal to the amount of property tax not exempted.
Said payments shall be payable to the Saline County
Treasurer for 'distribution, under the provisions of
K.S.A. 12-148, to the general fund of all taxing
subdivisions, excluding the state, which levy taxes on
property where the business Is situated.. This
apportionment shall be based on the relative amount of
taxes levied by each of the applicable taxing
subdivisions. Any tax exemption granted shall not
affect the liability of any special assessments levied or
to be levied against such property. No tax exemption
granted shall be continued If the business ceases
operations or ceases to be engaged In eligible business
actl v i ties.
E.
Location remium ~ Businesses shall be encouraged to
ocate and or expand wlthln special redevelopment areas
of the City's enterprise zone. To foster such action,
businesses may receive a premium equal to fl fty percent
(50%) of and which shall be added to the calculated
tax exemption (e.g. forty percent (40%) calculated tax
exemption plus twenty percent (20%) premium equals
sixty percent (60%) total exemption for years one (1)
through five (5)..] Sp~clal redevelopment areas shall bè
designated by separate resolution of the Board of City
Commissioners.
Section 6. Preliminary review.. Prior to submittal of a formal
application.. ¿~ness may jnquire as to eligibility for tax exemption and the
anticipated amount based on preliminary emp(oyment and capital Investment
figures. The business shall complete a pre-application form and submit same to
the City Manager's office. City staff will review the information submitted and
respond to the business regarding apparent eligibility and potential amount of
tax exemption if granted. The response from city staff shall in no way
represent definitIve findings or be seen as an expression of Intent or obligation
of the Board of City Commissioners to favorably consider or approve a formal
request for tax exemption. The pre-application form and staff response shall be
deemed to he proprietary business information and shall be kept confidential.
Section 7.
Forma! aEPlication.
A..
Filing fee. An application for a 'tax exemption shall be
accompan1ed by a non-refundable filing fee of $250.. 00.
Said fee shall be used to defray expenses incurred In
processing and eval uatlng the appUcatlon.
B.
~I ¡cation contents. The City 'wlll not consider the
granting of any tax exemption unless the business
submits c. full and complete application and provides
such additional Information as may reasonably be
req uested.. The application shall contain the following:
1 .
Name and address of business.. principal owners
and officers, . contact person and telephone
number -
2..
A general description of the nature of the
business, business history and experience, and a
list of prlnclpaJ competition in the local market.
8C..w. .c. < '" ftMo """'. 1(0.... I
C.
D..
3..
Name and address of the owner of the land and
building occupied or to be occupied by the
business ..
4.
A general descrIption of the proposéd building
project or Improvements, including estimated
capital costs, plus the amount or percentage of tax
exemption being requested..
5..
A site plan of the proposed building project or
improvements ..
6..
If an existing business, average total monthly
employment figures for the past twelve months.
7.
Number of new jobs (FTE) to be created by type
or position.
A statement explaining why the requested tax
~xemption is a critical factor in determinIng
whether the proposed project is to be completed..
Review procedures.. Each application for tax exemption
šhã11 generaTIy forrow the following procedures:
8..
1 ..
The business submIts a completed application and
pays the required filing fee to the City Clerk..
The City Clerk provides notification of the
application for tax exemption to the Board of Ci ty
Comm Is s loners.
1..
3..
The Board of City Commissioners refers the
application to the City Manager for an analysis of
the costs and benefits of such. exemption and
authorizes a public hearing to be' scheduled.
4.
The City Clerk publishes required notice of the
hearing and sends written notice of the hearing to
the Saline County Commission and U.S..D.. 305.
5..
'The Board of City Commissioners reviews the
analysis of costs and benefits and receives
comments from the applicant, .. affected taxing
districts, and the general public.. At the
conclusion of the hearing, the Board of City
commissioners will take formal action on the
application.. Approval shall be In the form of a
resolution ..
6.
If approved, the busIness will need to file an
exemption claim form with the Coun ty Appraiser as
required by state statute.. Such claim form shal1
be signed by the City Clerk.
Terms and conditions.. In granting a tax exemption,
t e oar 0 Ity ommlssloners may impose any terms
or conditions as deemed necessary to fulfill the purpose
a nd Intent of th i s policy.
Se~tion 8.. Completion review. Each tax exemption granted shall be
subject to a review of project completion. This review shall be for the purpose
ofdeterminin~;) if the economic benefits were achieved, If the percent and term of
exemption remain valid, and if the business Is in compliance with any established
terms or conditions.. I n the event the capi tal Investment project has not been
completed I the review status shall be considered to be in-progress and no tax
exemption shall be granted. I f the capitar Investment project is complete but the
employment goal has not been reached and hiring remains active, the applicant
business may choose' to be considered in-progress and receive no tax exemption
or be" considered partially complete and receive a one-time prorated tax
exemption for the subject year.. A project shall be considered complete If more
than 18 months have elapsed since Initial approval of the tax exemption
resolution ..
~.c... r,""""iI - ¡""". ...........
----
(
A..
Filing date and fee.- The application for completion
review sf\ãlïbe filed on an annual basis no later
than January 15 of each year unti I the project has
been completed. The filing fee shall be $125.00
and is .non-refundable.. There shall be no filing
fee for an In-progress review..
I,.
B.
Business Information.. The recipient business shaft
provide information pertaining to the number of
. full-time permanent jobs created as a result of the
project, the actual amount of capital invested in
the project, the ongoing nature of business
actlv Itles, and any other data as may reasonably
be requested..
C..
Review grocess. The City Manager will review the
application and submit a report to the Board of
City Commissioners.. The Board of City
Commissioners will consider the application and
staff report at a public hearing, advance notice of
which shall be as provided for the hearing on the
original application. Said hearing and decision an
whether or not to grant a certification of
compliance for the tax exemption shall occur no
later than February 15 of each year.
D.
CertificatIon. I f certification of compliance for the
tax exemption is granted, the exemption claim form
filed by the property owner with the County
Appraiser shall include a written statement, signed
by the City Clerk, that the property continues to
meet a II terms and conditions established as a
condition of 9 rantl ng the exemption..
E.
Revocation.. The Board of City Commissioners
reserves the right to revoke a granted tax
exemption due to submittal of a fraudulent
.application, failure to submit the completion review
application and supportí ng Information, failure to
.meet qualifying criteria, or failure to comply with
established terms or conditions. Failure to
produce the stated economic benefits will result in
a reduction or Joss of tax exemption.
Section 9. Monitoring review. Following receipt of certification of
compliance, e,~x exemption granteá shall be subject to an annual monitoring
review of business status.. This review shalf be for the purpose of determining
if the business continues to meet eligibility criteria and remains in compliance
with anyestablíshed terms or conditions.
A.
B.
C.
Fi!in date and fee. The application for monitoring
rev ew s a e ed on an annual basis no later than
January 15 of each year for the term of the exemption.
The HI ing fee shall be $50.. 00 and is non-refundable.'
Business information. The recipient business shalf
provl~nform~atÎon pertaining to the ongoing nature of
business activities, average total monthly employment ø
any change in majority ownership of the business and
any other data as may reasonably be requested.
Review ~rocess. The City Manager will review the
appIIcat on and, uniess ineligibility or non-compliance is
evident, shall direct the City Clerk to issue a
certificate of compliance. In the alternative, the City
Manager shall submit a report to the Board of City
Commissioners for their determination of compnance.
""-""~ """'""" - w.o¡"", .........
D.
Certification. I f compliance is deemed to exist, the
exemption ' cia 1m form filed by the property, owner with
the County Appraiser shall include a written statement,
sIgned by the City Clerk" that the property continues
to meet all terms and condlttons established as a
condition of g ranting the exemption <I
E.
Revocation. The Board of City Commissioners reserves
the right to revoke a g ranted tax exemption due to
submittal of a fraudulent application, failure to submit
the monitoring review application and supporting
information. failure to meet qualifying criteria" or
failure to comply with established terms or conditions.
-.......-
Section 10. Confidentta~. All applications and records pertaining to
a formal tax exemption request s a be subject to the provisions of the Kansas
Open Records Act.
Section 11. I ndustrial Revenue Bonds. The criteria" terms and
provlslonsoTt'hTSPolicy shan serve as a gufde1ìne for tax exemption requests
associated with I ndustrla I Revenue Bonds for which resolutions of intent have
been applied for after the effective date of this policy.
Section 12.. Amendments. The Board of City CommissIoners reserves
the right to amend" reVOke, change or otherwise modify this policy from time to
time to promote the best Interests of the City of Salina.
Section 13. Effective date. This policy shall apply to all applications
for tax exemption submitted on or after the date of adoption.
Adopted by the Board of City Commissioners and signed by the Mayor
this 14th day of January, 1991.
[S EAL)
ATTEST:
..1 ~ ~- ~ l, tAJ OJ
JacquelJlne Shiever, 'City Clerk
RESOLUTION NUMBER 05-6163
A RESOLUTION AUTHORIZING THE DEVIATION FROM THE POLICY OF
THE CITY OF SALINA, KANSAS, REGARDING THE GRANTING OF EXEMPTIONS
FROM AD VALOREM TAXATION FOR ECONOMIC DEVELOPMENT PURPOSES
IN THE CASE OF THE APPLICATION OF SALINA ECONOMIC DEVELOPMENT
CORPORATION AND SALINA VORTEX CORPORATION.
WHEREAS, Resolution Number 91-4265 sets forth the policies and procedures of the
City of Salina, Kansas, relating to granting property tax exemptions for economic development
projects as allowed by the Kansas Constitution (the "Policy Resolution"); and
WHEREAS, Section 4.D.2 of the Policy Resolution provides: "No exemption will be
granted for buildings or building additions for which a building permit has been applied or
construction commenced before the date said exemption is granted. No exemption shall be
granted for any existing tangible personal property located in the City of Salina nor any newly
acquired tangible personal property ordered or purchased prior to the date said exemption is
granted;" and
WHEREAS, Section 2 of the Policy Resolution provides in part: "The Board of City
Commissioners is under no obligation to approve any requested exemption and reserves the
rights to deviate from the policies and criteria contained herein if circumstances exist to warrant
such deviation;" and
WHEREAS, City has received companion applications and has under consideration
proj ects for Salina Economic Development Corporation and Salina Vortex Corporation which
involve relocation and new construction to a site on Wertz Street in Salina, Kansas as well as
acquisition of manufacturing equipment, the "Companion Projects."
WHEREAS, while the Companion Proj ects appear to meet the base requirements of job
creation and capital investment, the Projects are complex and will require extensive staff analysis
and study before the required public hearings can be held and a final determination made by the
governing body regarding eligibility or the amount of any exemption; and
WHEREAS, both the public interest and the private business interests of Salina
Economic Development Corporation and Salina Vortex Corporation are best served by deviating
from Section 4.D.2 of the Policy Resolution in the specific cases of the Salina Economic
Development Corporation and Salina Vortex Corporation applications; SO NOW
THEREFO RE,
BE IT RESOLVED, by the governing body of the City of Salina, Kansas that:
Section 1. That in the case of the application of Salina Economic Development
Corporation for property tax exemption pursuant to the Kansas Constitution, Section 4.D.2 of
Resolution Number 91-4265 shall not apply.
Section 2. That in the case of the application of Salina Vortex Corporation for property
tax exemption pursuant to the Kansas Constitution, Section 4.D.2 of Resolution Number 91-4265
shall not apply.
Section 3.
This resolution shall be effective upon its adoption.
Adopted by the Board of Commissioners and signed by the Mayor this 7th day of March,
2005.
Monte Shadwick, Mayor
ATTEST:
Lieu Ann Elsey, CMC, City Clerk