Wichita City Council signs off on $1 million grant for Bombardier expansion
11/16/2011 10:53 AM
11/16/2011 10:53 AM
City officials took what several described as a “60-for-one” deal Tuesday, unanimously signing on to Bombardier Learjet’s $52.7 million proposed Wichita expansion by approving a $1 million grant that the planemaker will use to relocate employee parking.
In a brief discussion, city officials said that the chance to invest $1 million in exchange for an estimated $60 million annually in new sustained payroll from Bombardier Learjet was too good to pass up. The city’s $1 million is half of a local match required for a $2 million U.S. Economic Development Association grant for the parking lots. The Sedgwick County Commission will act on a similar $1 million grant match later this year. The city also agreed to property tax abatements as part of the deal. Mayor Carl Brewer and Vice Mayor Lavonta Williams were out of the country on an economic development recruiting trip.
“This is important to the future of Wichita and for jobs,” council member Michael O’Donnell said. “Providing a million dollars here for a parking lot opposed to $7 million for a boutique hotel parking garage, there’s no comparison.”
Allen Bell, the city’s director of urban development, said the new parking is essential to Bombardier’s expansion plans. Three new facilities in the planned expansion will be built on current employee parking, and the company wants to lease ground from the Wichita Airport Authority for more parking.
John Dieker, vice president of strategic projects for Bombardier Learjet, said after the vote his company is pleased to expand its partnership with Wichita.
“We’re very proud to be a part of this community. They stepped up to help with the expansion that will broaden our growth and our long-term future in this community,” he said.
Dieker said Learjet is landlocked, making the use of existing parking for the expansion the company’s only option.
“We’ve been a member of this community as Bombardier Learjet for a long, long time,” he said. “This relationship allows us to continue to grow here, and we’d like to continue to do that.”
Bombardier chose Wichita over Tucson, Ariz., and Montreal for the expansion, which will include a center of excellence, expansion of the company’s flight test center, a new aircraft delivery center, a new production flight testing center and a new paint facility for the Learjet 85 program. With the 600 jobs to be added for the Learjet 85, the expansion should drive new Bombardier jobs in Wichita over 1,000, Bell said. The expansion-related jobs will pay an average of $118,000 in the first year, according to city documents.
City officials said the expansion deal has been in the works for at least six months, coordinated by the Greater Wichita Economic Development Coalition. Construction work will begin in the spring.
The project’s financial return falls slightly below past economic development projects and the economic development coalition’s benchmark of $1.30 back to government for every $1 spent: $1.26 to $1 at the city and $1.23 at the county. But council member Jeff Longwell said he supported the grant.
As did other members of the audience.
“Before us is an opportunity other cities, states and communities would do almost anything to have,” said Lynn Nichols, chairman of the Wichita Metro Chamber of Commerce. “It will add hundreds of high-paying jobs while further diversifying the company’s base of work here. It’s a significant opportunity for Wichita, Sedgwick County and south-central Kansas, and in fact for the entire state ... We can’t ever forget what this company has contributed over the past 50 years to this community.”
Nichols urged council members to stay in the increasingly incentive-heavy aggressive economic development “game.”
“We’ve got competition. It’s real,” he told the council. “The state of Oklahoma to the south of us wants some of our business. We can’t stand by and let these other communities, states and countries pick our pockets.”
Rita Rogers, assistant directing business representative for Machinists District 70, and Richard Taylor, manager of the Plumbers and Pipefitters, echoed Nichols’ remarks.
“In a day and age when companies are racing to outsource jobs to other countries, it’s refreshing to have a company who wants to add jobs to this community,” Rogers said. “These are the kind of jobs everyone wants.”
“This is a project that will improve the quality of life in Wichita and the surrounding area,” Taylor said, “while at the same time providing badly needed jobs for the building trades. This is a small investment to make sure these jobs stay in Wichita.”