City of Wichita approves partial property tax exemptions for two small businesses
07/08/2014 5:23 PM
07/08/2014 5:23 PM
Two small Wichita companies will receive partial property tax exemptions for expansions that are expected to add more than 30 jobs.
The City Council on Tuesday unanimously approved the exemptions for C.E. Machine Co. and Walton’s Inc.
After presenting the request to the council, Allen Bell, the city’s economic development director, said, “Small businesses are the job creators” and should have the same opportunities for public incentives as large companies.
The two companies will receive more than $58,000 in property tax exemptions in the first year. The exemptions are for five years, with an option for the city to extend them another five years if performance measures are met.
C.E. Machine, a nearly 40-year-old company that manufactures machine parts for the aviation industry, requested the exemption to construct a 25,000-square-foot addition to its facility at 1741 S. Hoover Court.
The company’s total capital investment is $3.9 million, including almost $3 million to purchase new equipment, according to a city document.
The expansion will allow C.E. Machine to add at least 20 employees to its current staff of 62. The average annual salary for all employees will be $52,345, the document said.
Based on a formula, the company will receive a 76.75 percent property tax exemption on its expansion. That adds up to $21,369 for the first year and using the 2013 mill levy.
A state statute allows the City Council to approve tax exemptions for all four entities in the taxing jurisdiction, Bell said. The breakdown for those exemptions is $5,760 for the city, $5,205 for Sedgwick County, $266 for the state and $10,138 for the Wichita school district.
Walton’s, a wholesale supplier of services and products for the meat-processing industry, will receive an exemption on property taxes after investing more than $2.7 million to move into a vacant building at 3639 N. Comotara, a city document said.
The company, which has nearly 80 percent of its customers outside the state, moved to the building in August.
The city’s incentive policy says that for an existing building to be eligible for tax exemptions, it must be vacant at least two years. The building on Comotara had not been used for almost three years, Bell said.
Walton’s expanded to 46,000 square feet – more than doubling its previous space – in its present location. The company has 19 employees and expects to add 11 more over the next five years, according to a city document.
The average salary for the new 11 employees is projected to be $37,818. Average salary for all employees is $55,558.
Founded in 1986 as Mid-Western Research and Supply, Walton’s will receive a 57.5 percent exemption on the property tax for its expansion. That’s expected to be $36,979 for the first full year.
Of that amount, $9,968 comes from the amount allotted to the city, $9,008 to the county, $460 to the state and $17,543 to the school district.