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Friday, June 27, 2014

Sedgwick County commissioners approve loan for Johnson Controls

By FRED MANN
The Wichita Eagle

After a lengthy debate about economic development incentives, Sedgwick County commissioners on Wednesday finally approved one for Johnson Controls.

Commissioners voted 3-2 to give the company a $42,500 forgivable loan that requires it to create and sustain jobs in Sedgwick County.

Commissioners Richard Ranzau and Karl Peterjohn voted against the loan.

Johnson Controls, a heating and air conditioning company that manufactures equipment under the Coleman and other brand names, also has been approved for a $42,500 forgivable loan from the city of Wichita.

The two loans are the local contribution to a $1.2 million package to help the company bring 182 jobs to Wichita from its factory in Norman, Okla.

Johnson won't have to give the money back if it creates and maintains that many jobs for five years. Johnson estimates the average annual salary for those jobs will be about $32,000.

The city and county loans will be used for moving and training expenses. Johnson now employs 1,050 full- and part-time workers in Wichita and Maize. The company is consolidating its residential-equipment production lines here.

Ranzau said the forgivable loan program is flawed and creates a redistribution of wealth.

"We take money from one group of people and give it to another," he said.

Ranzau said that government shouldn't get involved in business, that Johnson Controls had planned to move to Wichita anyway, and that a company with millions in profits wouldn't be affected by the county's contribution.

In approving the loan, Commissioner Tim Norton said Johnson provided a chance for the community to diversify jobs. Commissioner Jim Skelton cited the impact of its salaries and property taxes on the community.

Commission Chairman Dave Unruh said that, like other government officials, he doesn't like incentives. "But that's part of the competitive marketplace we're in."

Two county residents, John Todd and Bob Weeks, spoke in opposition to the loan.

"When government gives one business a better deal and an unfair market advantage over another, it essentially undermines the very environment it should be creating to allow all companies and businesses to compete and create job," Todd said.

Weeks questioned a potential conflict of interest with Skelton, who has a brother who works for Johnson Controls.

Skelton responded by saying Weeks didn't know the circumstances of the matter, and he said Weeks and others should speak to him before commission meetings if they have questions for him about conflicts of interests.

"There's nothing to be gained here by me or my brother," Skelton said. "He already has a job there, and this is about creating 182 new jobs."

Lynn Nichols, Wichita Metro Chamber of Commerce chairman and president of Yingling Aviation, spoke in support of the loan to Johnson.

"We want them to stay in Wichita and we want them to grow. Growing here means more jobs," he said.

"Whether we like it or not," Nichols said, "the marketplace of competition is real and getting more competitive every day. If we choose as a community not to compete, then we will lose."

Nichols said that he receives calls from economic development recruiters from other states or large markets at least once a month trying to lure his company away from Wichita.

They tell him they can help him make the move and offer him buildings, land and help recruiting and training workers, he said..

After calling Wichita "a jewel" Nichols said, "Everybody wants a piece of our jewel and they're trying to pick our pockets every day."

Walter Berry, president of Berry Cos. and incoming chair of the Wichita Metro Chamber, also spoke in support of the loan.

"Johnson Controls builds products that are sold outside the community, and therefore they are economic drivers inside the community," he said. "And they are not aviation-oriented, so they are helping us diversify our economy."

Reach Fred Mann at 316-268-6310 or fmann@wichitaeagle.com.

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