City of Lawrence

Public Incentives Review Committee

December 8, 2015 minutes

MEMBERS PRESENT:	Mayor Mike Amyx, Vice Mayor Leslie Soden, County Commissioner Mike Gaughan, Linda Jalenak, Aron Cromwell, Bradley Burnside, Brian Iverson, and Jill Fincher
MEMBERS ABSENT:	None
STAFF PRESENT:	Diane Stoddard, Britt Crum-Cano
PUBLIC PRESENT:	Scott Nuttleman, Menard, Inc. and approximately five people from the public and media were present.

Mayor Amyx called the meeting to order at approximately 2:00 pm.

Mayor Amyx welcomed Scott Nuttleman, real estate representative from Menard, Inc. The members of the committee introduced themselves.

The minutes were discussed. It was noted that there is one typo in the spelling of Linda’s Jalenak’s name in one place on the agenda. With that correction, a motion was made by Fincher, seconded by Burnside to approve the August 4, 2015 meeting minutes. Motion approved unanimously.

Commissioner Gaughan joined the meeting.

Mr. Nuttleman reported that Menards is a large retailer and stated that they have several manufacturing and distribution centers that supply materials to the stores for resale. The center here in Lawrence would serve several retail stores in the region. He stated that the campus would contain three main buildings: a building that would manufacture concrete blocks, a truss plant (making trusses for building) and a distribution building that would load trucks to go to the stores. There is a possibility that there would also be a wood recycling facility for wood and pallets coming back from the stores for recycling.

Mr. Nuttleman stated that their philosophy is to under promise and over deliver and that deliberately the investment figures are lower than anticipated for those purposes. Menard, Inc. operates these facilities in a number of facilities and in all cases they have grown. He believes that these manufacturing jobs will be a good career opportunity for the area. He indicated that Menards is a stable company and their goal is to enable employees to have a long-term career with the company, if they desire. He believes that these types of jobs are needed in all communities and is proud to bring this project to Lawrence. He requested the committee’s support for the incentives being requested. He stated that it is expensive and difficult to develop facilities of this type and it is a tribute to the community that Lawrence VenturePark is available for this type of operation and that it is ready for development and designed to handle storm water, traffic, etc. He stated that the way that this project has been put together is the right way to handle the incentives. He stated that Menard’s is fronting the money for the project and will get a portion of that back, but only if they perform. Finally, he thanked the City, County and EDC for working to put this project together.

Mayor Amyx thanked him for his comments.

Commissioner Mike Gaughan asked about health insurance. Mr. Nuttleman said that all employees, full or part-time, can get healthcare insurance through the company. The company pays 50% of the premium and Menards takes care of the HSA payment. He said that many employees are able to not go out of pocket through the HSA. Crum-Cano also mentioned that, as per City Policy, companies can also meet the healthcare requirement by paying all covered employees a wage that is at least $1.50 above the annual wage floor. Mr. Nuttleman restated that every employee is eligible for healthcare insurance and the vast majority of positions with the facility will take the coverage.

Commissioner Gaughan asked about compliance. Crum-Cano stated that there are four performance categories and each company annually provides reporting regarding those categories, subject to a blended rate for an overall calculation of performance.

Mr. Nuttleman showed several visuals related to the project. He pointed out how the campus would lay out on the site and also that the company has room to grow on the site. He pointed out that rail access is a key part of the site for their project. He also showed several photographs from other similar facilities operated by the company. He stated that other facilities include large berms installed that both shield views but also help ensure that unauthorized vehicles cannot access the site. He pointed out that Menards also has larger regional facilities, but this facility here would be a “mini” facility at around 100 acres. He estimates the site here would generate approximately 30 semis per day going to and from the site.

Vice Mayor Soden asked about potential for future expansion. Mr. Nuttleman responded that these possibilities could include new operations and processing related to the Kansas City intermodal facility. He said that at that time, they would come back with another site plan. She also asked about rail. He said that there are generally a few rail loads per week.

Crum-Cano provided an overview of the project and the assistance package. Dimensions of the project include 90+ acres, 100 net new full-time jobs with starting wage of $14.61/hour, approximately 184,000 of facility built square footage, and an estimated $15 million in real property capital investment. She points out that based on the information provided, the project meets policy eligibility criteria and would qualify for a 50% property tax abatement for a ten year period. She explained the assumptions used within the cost-benefit analysis and showed that ratios for the taxing jurisdictions exceed the preferred threshold of 1:1.26 cost to benefits for the assistance package

Brad Burnside declared a conflict of interest on the Menards’ request and moved to sit in the audience.

Brian Iverson asked about the tax benefit to the city. Crum-Cano pointed out that model results show a 1.28 cost-to-benefit ratio to the City.

Diane Stoddard mentioned her letter of support for the project and that the City is excited to have this project as our first at Lawrence VenturePark.

Mayor Amyx thanked Brady Pollington for his correspondence.

Commissioner Gaughan mentioned that the County will consider its portion of the incentive request tomorrow. He was interested in other discussions with the City regarding other potential projects. Mayor Amyx thanked Commissioner Gaughan and the county for their partnership in this project.

Aron Cromwell stated that he appreciated some of the features that contribute to positive environmental considerations. He stated that one of the biggest environmental factors is that this project is going to be developed on a brownfield site at Lawrence VenturePark. Mr. Nuttleman said that this type of use is one of the uses that work well for this type of site and Menards finds that this is a good future use for the property. He recognized the efforts and foresight of the community to have this ready to go and that the property will work well for their project.

Vice Mayor Soden said that during her campaign she talked a lot about full-time jobs with a living wage and supported the project. Mr. Iverson said that he thought this was a good project and thanked Mr. Nuttleman for this project. Mayor Amyx also thanked him.

Vice Mayor Soden made a motion, seconded by Jelanek, to recommend approval to the City and County for the project as presented. Motion was approved unanimously.

Mayor Amyx made a motion to adjourn, seconded by Vice Mayor Soden. Motion was approved unanimously.

The meeting was adjourned at approximately 2:55 pm.