Business

City offers Cargill tax abatement, parking garage financing

Cargill announces protein headquarters will stay in Wichita

Brian Sikes, head of Cargill's protein division in Wichita, announced at a news conference at the Wichita Metro Chamber of Commerce, that the company would remain in Wichita, and build a new campus in a yet-to-be determined location. Cargill had l
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Brian Sikes, head of Cargill's protein division in Wichita, announced at a news conference at the Wichita Metro Chamber of Commerce, that the company would remain in Wichita, and build a new campus in a yet-to-be determined location. Cargill had l

Myriad city and state leaders attended Cargill’s recent announcement that it will keep its Wichita operations here. But what the city and state will give the company to stay won’t be finalized until a new site is.

“It all depends on location,” said City Manager Robert Layton. “Regardless of where they’re going, they will be eligible for IRBs.”

Industrial revenue bonds and partial payment on a new parking garage are two of the biggest incentives the city is offering Cargill.

“These are tools that we’ve put forward to them if they so choose … to utilize,” said Scott Rigby, assistant city manager and director of development.

The Kansas Department of Commerce won’t identify which incentives the state is offering Cargill.

“We cannot release any details … until official contracts with them are signed,” said Nicole Randall, director of communications. “It’s a personal finance for a private company.”

Sedgwick County is not offering any incentives to Cargill.

Cargill director of communications Mike Martin won’t comment on the incentives.

“Given that the Wichita City Council vote on any potential incentives is pending, it is premature for us to comment,” he said via e-mail.

Potential IRBs and the property tax abatement that comes with them are potentially the biggest benefit to Cargill.

“There’s a benefit for them to finance construction of their facility,” Rigby said. “This isn’t city dollars.”

The bonds allow a property tax abatement of up to 10 years.

Cargill has to find a buyer for the bonds in order to secure a low interest rate.

In exchange, Rigby said Cargill has to meet certain numbers, which haven’t been set yet.

“There’s some early numbers,” Rigby said.

For instance, Cargill is looking at constructing a building that’s 150,000 to 200,000 square feet.

“It’s too early to determine,” Rigby said. “The developer is going to play a key role in that.”

Also, an agreement probably would require Cargill to keep a minimum of 700 jobs here. The company now has about 800.

The IRBs would be evaluated after five years and could be approved by the city for another five years, Rigby said.

The city has also offered to pay for half of a new parking garage if Cargill needs one.

The company has said parking is an issue at its current space at 151 N. Main St.

Brian Sikes, head of Cargill's protein division in Wichita, announced at a news conference at the Wichita Metro Chamber of Commerce, that the company would remain in Wichita, and build a new campus in a yet-to-be determined location. Cargill had l

Cargill, which has corporate headquarters in Minneapolis, Minn., bases its Wichita operations in a 110,000-square-foot, 10-story building now. Martin previously called this a “classic office building configuration” that’s not a good thing for the company going forward.

Layton said the city has helped with parking garages before, such as when it remodeled the former Macy’s garage downtown.

“We did that to benefit High Touch,” he said.

High Touch pays $35 a stall to lease the garage.

Cargill would not pay for the use of up to 1,000 parking spaces for 10 years.

Beyond that, Cargill would pay market rate for any spaces it uses in excess of its 50 percent share of the garage.

There could be a role for a developer or other community partner on the city’s 50 percent portion.

“Then we would go in 50-50 as a community and city and partner with Cargill,” Rigby said.

“I always say it’s a financial tool.”

The company may choose a site that doesn’t lend itself to a garage, though, or may want to go another financing route.

The city has offered smaller incentives to Cargill as well, including an ombudsman.

Rigby called the ombudsman something of a project manager.

“They’ll just call one person,” Rigby said of Cargill’s dealings with the city. “It’s a way to eliminate … a business trying to figure out, how do I get through the labyrinth of city processes?”

Rigby said the city has done this with other companies, such as Spirit AeroSystems and JR Custom Metal Products, and would do it for any company with an expansion or project that needs streamlining.

He said the city also is committed to work with the state and the Greater Wichita Partnership to create a talent recruitment position that could help Cargill and other companies recruit employees at all levels.

The city has said it would offer a 15-day turnaround instead of the customary 30 days for plan review and permits, along with a 50 percent reduction in plan review, utility and building permit fees.

Nothing is finalized on the city’s or state’s incentives.

“This will all be determined once they select a site,” Layton said. “We’re staying completely away from that process.”

Rigby said the city wants to be fair to all developers and remain neutral in the process.

“That’s really a process that Cargill’s going to lead.”

Carrie Rengers: 316-268-6340, @CarrieRengers

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