TOPEKA — The state of Kansas is among two finalists for a massive advanced manufacturing facility capable of creating 4,000 permanent jobs and injecting more than $2.5 billion annually into the economy.
The Kansas Department of Commerce offered that tantalizing information during a Senate committee hearing about creation of an extraordinary property, sales and income tax incentive program open to companies making a minimum $1 billion investment in the state over a five-year period. There was no disclosure of the prospective company or the county that could host the manufacturing facility due to confidentiality agreements.
Another provision in the Attracting Powerful Economic Expansion Act would deliver tax incentives to existing or new Kansas-based suppliers if conducting a least $10 million in annual sales with this type of manufacturing giant.
Paul Hughes, deputy secretary of commerce for business development, said the Kansas Legislature and Gov. Laura Kelly would need to create new law by the end of January because the company in transition planned to make a site-selection decision in February and announcement in March. Without creation of the enhanced incentive program in Kansas, he said, the state would likely fumble this opportunity to land a development deal sought by about 70 potential hosts.
“The global economy is rapidly changing, so Kansas must strengthen its tool kit to be more competitive in landing these mega-projects,” Hughes said.
He said Kansas had been considered for 11 projects in the past five years that involved investment of more than $1 billion, but was beat out each time by other states.
“We cannot rest on past accomplishments,” Hughes said. “We can’t trail our competitors and accept an eventual 12th loss of a mega-project.”
Hughes also said the prospective employer expected to bring $4 billion in private investment to a state, create 4,000 permanent jobs with an average salary of $50,000 and add 6,000 temporary jobs during the construction phase. The manufacturing structure is expected to be in the range of 3 million square feet.
Sen. Mary Ware, a Wichita Democrat on the Senate committee, said economic growth numbers tied to the mystery project were bewilderingly impressive but she was concerned about who made those claims and whether they might be inflated. The commerce department said the projections were work of the company seeking to relocate.
A cluster of city and regional economic development organizations told the Senate Commerce Committee they endorsed Senate Bill 347, which was introduced Tuesday in the committee. The chairwoman, Republican Sen. Renee Erickson of Wichita, said the panel would debate and vote as soon as possible on the complex, multi-layered 55-page bill.
“It is a lot of swallow,” said Sen. John Doll, R-Garden City.
“Agreed,” Erickson replied.
Under the bill, the new program aimed at companies investing more than $1 billion in Kansas would be open to advanced manufacturing, aerospace, logistics, food, agriculture and technical service companies as well as corporations willing to locate their national headquarters in the state. Much of the tax benefit would be delivered upon completion of a construction project and the legislation included claw-back provisions if a company fell short of expectations on jobs or capital investment.
Sen. Caryn Tyson, a Parker Republican and chairwoman of the Senate Assessment and Taxation Committee, said she was disappointed the commerce department wasn’t able to identify the company interested in Kansas nor the county where the project might be located. She said a commerce department official visited her office prior to the committee’s meeting and offered to shared with her identity of the company if she signed a nondisclosure agreement.
“You know,” Tyson said, “we used to talk about backroom-shady-smoke-filled deals. This appears to be along those lines.”
