Archive for Thursday, July 6, 2000

Tax abatement hearing set for Thursday

July 6, 2000

DeSoto residents are invited to share their opinions Thursday evening on a request by Rehrig Pacific officials for a 75-percent tax abatement.

The $6 million plastics plant is currently under construction on 17 acres of land on the northwest side of the Sealright plant, along the K-10 Corridor. Rehrig representative Ed Elder asked city council members at their last meeting for the abatement. Because the company is seeking a constitutional tax abatement, which is regulated by the Kansas State Board of Tax Appeals, the city can only make a recommendation of how much abatement the company should receive.

The city's financial consultant, Marty Nohe of Kirkpatrick- Pettis, said the state board would have final say in the matter, but added that the city's recommendation would carry significant weight with tax board members.

Before making its recommendation to the state, the city is required to do a cost-benefit analysis of the abatement request, which Nohe presented to board members at their last meeting.

Assuming a 75-percent abatement was granted for the maximum 10 years, the city would receive about $1.31 for every dollar it gave up. The county, school district and community college would receive less than a dollar for every dollar lost and the state could expect to receive about $3 for every dollar given up, Nohe explained.

Because the city has limited tax abatements in the past to 50 percent, Nohe ran those numbers as well.

"Using those numbers, every taxing agency received more than a dollar for every one given up. The city's number went up to over $2 and the county, school district and community college were around $1.50," he said.

The projections are based on how much tax revenue would be collected as a result of the company, including tproperty tax not abated, jobs created, new houses and sales tax collected on products purchased by the company and its employees, Nohe explained.

Council member Brad Seaman told Elder two weeks ago he was surprised the company began construction before making the abatement request.

"It blows my mind you're as far along as you are and haven't gotten this done," he said. "My thought is, you're going to go ahead whether you get the abatement or not. Why would we give it? It seems we'd just be cutting our own throats."

Elder said Rehrig officials believed they had a verbal commitment from the city to cooperate on the abatement issue.

"That commitment must have come from somewhere else because I don't remember giving one," Seaman told Elder.

Rehrig Pacific is a family-owned company with seven plants nationwide.

The company produces plastic pallets by injecting melted plastic into steel molds. Materials coming into the plant would arrive on rail and the finished product would be shipped out of the plant on trucks. No chemicals would be stored on site.

Noting that the plant would be located near a residential area, city council president Duke Neeland asked officials previously if the production process would produce any fumes or residue.

"No it wouldn't," local plant manager William Rehrig replied. "Melting plastic is like melting butter. It doesn't smell unless you burn it."

Rehrig further explained the melted plastic is injected into the enclosed molds which are cooled externally by a water-flow system. The water is continuously circulated and never discarded, he said.

To minimize contact with a residential area to the north of the property, Elder said, the plant would be located on the south end of the land. Although Rehrig may someday expand its facilities, the remaining acreage would not be offered to other companies for development, he added.

Residents who live near the plant told city council members several weeks ago they were concerned about the safety of children who play in the area once the plant opens and the railroad spur becomes active.

Rolinda and Ammon Stotts' home backs up to the Rehrig property. The couple came before the city council with a petition signed by 30 of their neighbors, asking them to force the company to install a physical buffer between their homes and the plant.

Council members advised the couple at the time to take their request to Rehrig officials when they came back to ask for the abatement. No one from the neighborhood spoke at last council meeting.

Also at the meeting, council members will:

consider a resolution authorizing a neighborhood revitalization program. According to program guidelines, residents and business owners within the city's historic district would receive a property tax rebate on improvements made to their property increasing its value by $5,000 or more. The council hosted a public hearing on the matter at its last meeting. No one showed up to speak at the hearing.

consider an ordinance regarding livestock at large in the residential areas. Residents living on Waverly Road asked told council members at their last meeting they had a problem with cows and bulls from a nearby pasture roaming their neighborhood. City administrator Gerald Cooper told council members the city did not have an ordinance in place to effectively deal with the problem. Council members instructed City Attorney Patrick Reavey to look into the matter.

consider an ordinance to extend the 35-mph speed limit on Lexington Avenue several yards east of Kill Creek Road.

consider a resolution to establish a Freedom of Information officer for the city. The officer would be responsible for making public records available to the public upon request.

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