The Wichita City Council on Tuesday approved industrial revenue bond financing and an estimated $13.6 million in property tax breaks to subsidize Cargill Protein Group’s new downtown headquarters.
Cargill is in the process of razing the current Wichita Eagle building at 825 E. Douglas to make way for its new corporate office facility. The Eagle is in the process of moving to new offices in Old Town Square.
Cargill has outgrown its current headquarters at 151 N. Main, and city and state officials negotiated the incentive package to keep the company here. The decision was announced almost a year ago in a news conference by Gov. Sam Brownback and Mayor Jeff Longwell.
“When Cargill stood up before all of us and said, ‘To compete in a global marketplace, the best place for us to do that is Wichita, Kansas,’ has brought wonderful attention to our city and has helped provide great (downtown development) momentum,” Longwell said.
The tax abatement will be worth about $1.36 million a year to Cargill, according to a city estimate. It is guaranteed for the first five years and renewable for an additional five.
Cargill’s protein group handles the company’s meat, poultry and food service and distribution ventures. Some well-known brands under its banner are Excel, Sterling Silver and Angus Pride meats, along with Honeysuckle turkey.
The company’s new headquarters will include about 170,000 square feet of office space housing at least 700 employees with an average salary of $64,100.
The company will also build a 750-space parking garage for the new building, according to city documents.
The largest share of Cargill’s annual property tax break, $622,723, will come from taxes that would otherwise be owed to the Wichita school district.
Other agencies forgoing property tax income to facilitate Cargill’s project are the city, $378,450; Sedgwick County, $340,958; and the state, $17,400.
The $60 million of city-issued industrial revenue bonds will be paid off by Cargill, but that method of financing will exempt the company from paying sales taxes on building materials for its new headquarters.
Keeping Cargill in Wichita is expected to generate enough economic activity to more than offset the abatement of property taxes by local governments, according to an analysis by the Wichita State University Center for Economic Development and Business Research.