Incentive packages small price to pay to ensuring town’s future

Inducements up front help bring long-lasting investments

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Columnists

January 28, 2022 - 3:36 PM

VFW officers presented a plaque to G&W Foods for appreciation of the grocery’s support in November 2020. Photo by Richard Luken/Iola Register

On Thursday, the Kansas Senate passed a bill that will provide $1 billion or more in tax breaks for large-scale industries that plan to invest here. It’s our hope the House does the same.

The fast-track legislation is in response to a large manufacturer saying it has narrowed its selection to one of two states to build a $4 billion plant. Kansas remains in the running.

How we can sweeten the pot will make the difference.

In such instances, it’s important to look at the big picture.

SIX YEARS ago, G&W Foods almost pulled back from setting up shop in Iola.

“Investing several million dollars in a community only happens when we are confident that the community is stable and supportive of business,” said Dan Williams, G&W president, in a conference call with then-Allen County Commissioners Tom Williams, Jim Talkington and Jerry Daniels.

A “problem with Iola,” had given the grocer pause as to whether the area was business-friendly.

Not all council members, Williams had sensed, were on board with G&W coming to town.

Fortunately, county commissioners convinced Williams he would be welcome. 

As far as inducements, the grocer qualified for $5,000 in Neighborhood Revitalization Program funds that go to anyone building anew or making significant improvements, as well in-kind city labor to construct its parking lot and gutters, which totaled about $180,000 at the time.

The investment not only replaced the eyesore of an abandoned hospital, but has also paid off handsomely in terms of sales and property taxes. 

GOING back further, in 1994, Russell Stover Candies picked Iola as a manufacturing site over Chanute, according to a Register article from March 17, 1995. (My, how I love perusing the Register Archives!) 

Iola lured the candy plant this way with an incentive package that Chanute couldn’t match, including a 10-year exemption from property taxes, extension of city-owned utilities, fixed water and electric rates for five years, and price-indexed natural gas rates for five years. Iola Industries donated the 60-acre parcel valued at $90,000 to the city, which in turn made the site available to Russell Stover. And Allen County officials provided free use of the landfill for the first year, a perk valued at $2,000.

At the time, the land was zoned agriculture. Its annual property taxes were $400. 

Russell Stovers’ initial investment was $40 million, with production beginning the summer of 1997. Since then, the company has expanded the plant and continued to invest millions in its product and people.

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