Big Dog withdraws request for tax break extension

02/16/2011 12:00 AM

04/04/2011 2:08 PM

A longtime Wichita manufacturer's decision to withdraw a tax exemption request left City Council members scratching their heads Tuesday morning.

Officials from Big Dog Motorcycles withdrew without explanation Friday a request to extend tax breaks from a $1.1 million industrial revenue bond issue in 2003 to build a warehouse — an extension that city staff had recommended for approval.

According to city documents, Big Dog met each of three criteria established by the city for at least a one-year extension: Completion of the warehouse, creation of more than 40 new jobs in five years and a significant return on the city's investment.

The withdrawal perplexed Mayor Carl Brewer, who said after the meeting that he wasn't aware of a reason.

"We have no idea," the mayor said in an e-mail. "They just called Friday and asked us to pull the item. We were asking each other the same thing."

Big Dog employees declined to comment about the tax exemption Tuesday afternoon.

However, manufacturing operations were evident on the site and an employee said the company was preparing product for a motorcycle show.

City staff had recommended approval of a one-year extension for the motorcycle manufacturer, despite an economic downturn that caused the company to slash employment from a peak of 336 in 2005 to 37 today.

Also Tuesday, the city tabled action on a recommendation to deny an extension to CAP Carpet while the company's owners negotiate a reduced tax exemption with the city.

In 2005, CAP received a 90 percent property tax exemption as part of a $3.95 million bond issue to build a new building at 535 S. Emerson.

CAP was required to complete the building, which it did, and create 37 new jobs in five years while meeting city return-on-investment criteria.

Instead, the company created 19 new jobs and failed to meet the city's return-on-investment threshold of 1.3 to 1.

Company CEO Aaron Pirner asked the council to consider lowering the percentage of his property tax exemption, rather than eliminating it.

"We were caught in a tornado of economic change," Pirner said. "We were in the housing and aviation industries that were hit very hard."

Most council members supported the extension request.

Council member Janet Miller said the city must get adequate return on the IRB deals.

"You're going to need to get that return on investment quite a bit higher in the future," she told Pirner.

The council also extended for a year a tax exemption for KGB, once known as InfoNXX, a directory assistance firm.

Bell said KGB exceeded city requirements for an extension by spending $7.3 million on fixtures, furniture and equipment at 8400 E. 32nd St. North, and on the city's return on investment criteria — 2.35 to 1 on the city's general fund investment.

The company failed to create 944 new jobs in five years, topping out at 870 before huge layoffs cut its current job level to 185.

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