Biodiesel plant gets tax break
Wednesday, May 23, 2007
Renewable Energy Group will get a 10-year-property tax break on its new biodiesel plant in Emporia, but will also pay the city $402,000 and help with the needed infrastructure.
The Emporia City Commission agreed to the deal Wednesday. REG has said the $65 million plant will add 30 jobs to the community with a payroll of $1,350,000. If REG meets those investment and payroll goals, the tax exemption will go into effect Dec. 31 of the year production starts. If it falls short, it will get a partial exemption and make a payment in lieu of tax for the rest until the thresholds are met.
The plant will be built just east of Norfolk Iron & Metal. It will be capable of making up to 60 million gallons of biodiesel fuel a year, using soybean oil from Emporia’s Bunge plant.
“I want to publicly thank REG for coming to our community,” Commissioner Jim Kessler said. “You’re bringing high-quality jobs and a huge capital investment.”
“We’re looking forward to being part of your community,” REG business development manager Scott Wernimont said.
The tax breaks only affect the plant and the land. The equipment inside the plant is already exempt from property tax by Kansas law.
Putting in a plant of that scale will require some improvements, including the extension of Penny Lane, extended water and sewer lines, and an upgraded gas main.
The city will pay $772,822 for the gas main, of which all but $70,000 will be reimbursed by Kansas Gas Service after REG signs a minimum volume agreement. That last $70,000 is the cost of rebuilding the sidewalks in the area.
The repayment will take place within six years of the minimum volume agreement.
The other infrastructure improvements may be offset by a $750,000 community development block grant. Half of that would be an outright performance-based grant while the remaining $375,000 would be a loan to be repaid by REG at 2 percent interest. Approval or rejection of the CDBG should come by mid-June.
REG will pay for the extension of a railroad spur in the area and will build the pipeline needed to pull soy oil from Bunge.
In addition, beginning in 2009, REG will pay the city $40,200 a year for 10 years. The money will go into Emporia’s sales tax fund for industrial development, to help with future recruitment efforts.
The city may also get $300,000 of help from the Kansas Bioscience Authority. Kent Heermann, the director of the Regional Development Association, said he had a verbal commitment on the grant but that formal approval might take up to 60 days.
Wernimont said that REG expects to start building the plant July 1.
daveedailey (anonymous) says...
Well, isn't somebody going to comment on this one or is everybody too ashamed? Where are our tax breaks as citizens of Lyon County? I guess we can all be prepared for another increase in our realestate taxes because the governing bodies are so wrapped up in themselves for making this deal that the rest of us get to pay for it. Good job Emporia. I will bet our sales tax does not decrease. Again Emporia is all about what your name is and how much money you have and what kind of "sly" dealings you can make and get away with.
May 24, 2007 at 10:13 a.m. ( permalink | suggest removal )
MelissaE (anonymous) says...
Payroll of $1,350,000 (I'm assuming that's yearly). 30 jobs. That equals $45,000 per job.
WOW. That's huge for Emporia......but I'm willing to bet that someone towards the top of those 30 jobs will get $1,000,000/year and the other $350,000 will be divided 29 ways to equal $12,068/year. Yep. That's more like Emporia.
And don't worry--in 10 years when REG has to start paying property taxes, they'll just move elsewhere......duh. Like all the others. And leave Emporia with a big empty warehouse/buildings and nothing to show for it.
M
May 24, 2007 at 2:32 p.m. ( permalink | suggest removal )
daveedailey (anonymous) says...
This is very typical of Emporia. The rich get richer, the poor get poorer. Yes, I figured what the salaries were and was shocked. My question, are the people to work there already hired or are they from some other country? Will the people they hire be locals or from somewhere else? Are the thirty employees going to help replace the 100 or so people that are leaving Emporia? Maybe the car dealers would like to get in on this one. I bet they could profit by leasing that company vehicles.
May 24, 2007 at 2:49 p.m. ( permalink | suggest removal )
daveedailey (anonymous) says...
Thank you snake. You a probably one of the few to get the connection. Makes you wonder what elso goes on in theis so called decent town.
May 24, 2007 at 4:32 p.m. ( permalink | suggest removal )