Emporia City Commission on board with Fanestil’s incentives
By Jeremy Shapiro
Thursday, September 15, 2011
If a number of conditions are met, Emporia city leaders are fine with providing Fanestil Meats with a 10-year property tax abatement and other economic incentives for building a new meat processing facility.
A proposed Incentive Compliance Agreement calls for Fanestil’s to receive a 10-year abatement of property taxes and the city to reimburse $283,140 for the purchase of land Fanestil’s bought from the O’Brien family. The city will also pay for extending water and sewer lines to the edge of the property. The total cost to taxpayers is projected to be $482,380.
In return, Fanestil’s will construct a $4.7 million facility, have a minimum of 48 employees and pay them an aggregate average annual salary of at least $24,960.
At Wednesday’s Emporia City Commission work session, Fanestil Meats owners Dan and Jan Smoots and city commissioners said they were agreeable to the terms of the agreement. Commissioners had crafted the ICA at several executive sessions the past two months.
A public hearing on the agreement is set for 7 p.m. Sept. 21 at the Civic Auditorium. The agreement will be voted on by the commission Oct. 5.
Even if the ICA is adopted, it doesn’t necessarily mean it will go into effect. Other parts of the Fanestil move must be sorted out first, including the reinstatement of a FEMA grant and the sale of Industrial Revenue Bonds to EBS Financial or another institution they bring in.
Fanestil’s is attempting to move out of the flood plain near the Cottonwood River south of Emporia to a 12.5 acre tract on US Highway 50 just west of Americus Road.
“This is one way to guarantee a reinvestment in the community,” said City Manager Matt Zimmerman. “Not only does this keep jobs here but there is value in the construction work, which will be done by a local contractor.”
Jobs lost?
Currently, Fanestil’s has about 65 employees. The number inches up into the 70s around Christmas time.
Dan Smoots said Wednesday because of increased efficiencies at the new plant there would be fewer employees at first. He said, as they expand later, the number of jobs would be brought back to present levels or higher.
“The ability for our volume to grow would be four times higher than what it is today,” he said. “We probably will see a reduction due to efficiency. We don’t believe we will go all the way down to 48 people, but it could be very close to that.”
Smoots said he’s basing his employment projections on what happened when similarly-sized meat processing plants in Nebraska and Missouri moved into new facilities.
Commissioner Jim Kessler said the incentives Fanestil’s could receive are the same other companies have gotten in the past. The only controversial element is the job reduction, he said.
“We will keep every job that we possibly can,” Smoots said in response.
New digs
If the ICA is adopted, Fanestil’s will have one year to build the facility. Smoots does have the option of asking for a time extension, Zimmerman said.
Plans are for Fanestil’s to construct a 49,350 square foot building, including manufacturing, offices, warehousing and a small retail space. Customers would be able to buy products directly from the store and school groups and other interest parties would be able see how the meat is processed and packaged.
“There will be Plexiglas windows where you can look through and watch the processing operation,” Smoots said. “Making hot dogs is probably not something a lot of people want to watch, but making hams and bacon might be pretty interesting.”
As it stands now, the land the facility will be built on is not in the city limits. An annexation request will be discussed at the Sept. 27 Planning Commission meeting. Right now the O’Brien’s pay county and school district property taxes on the land. Thus, the abatement would mean less tax money for those entities. They will both have a chance to weigh in before the ICA is adopted.
“We have been told informally that they don’t object,” Zimmerman said.
The Lyon County Commission last month appealed FEMA’s decision to rescind a $1.6 million grant. The grant was terminated because of a perceived failure to comply with the terms of the award.
Smoots said having an adopted ICA would help get the grant restored.
“It shows the support of the community and it shows we are moving forward,” he said. “It’s a real important step.”
Government Channel
The commission also heard Wednesday a request from The Emporia Gazette to broadcast Emporia High School football games and other USD 253 School District events on channel 18, the city government channel. The Gazette would have sponsors for the broadcasts.
The city’s current policy is to have no commercial content on the channel, though Zimmerman pointed out they aren’t following it since KVOE’s radio content and advertisements are currently broadcast on channel 18.
The issue was muddled by potential legal conflicts that may not allow for commercial broadcast at all on education or government channels. The request was tabled for now so that further legal research can be conducted.
railroadhorn (anonymous) says...
We really don't need KVOE or the Gazette using channel 18 as for-profit businesses. If any money is being made off sports broadcasts, it should go to the school district.
September 15, 2011 at 7:50 p.m. ( permalink | suggest removal )
methusla (anonymous) says...
You can bet on one thing, if Steve Sauder is involved in anything, it will definately be " For Profit ", particularly his and his " Buds' " profit/benefit " and hardly anyone elses ! Because it usually works out that everyone else ends up footing the " Bill " for " His For Profit/ Benefit " ventures !
September 15, 2011 at 8:49 p.m. ( permalink | suggest removal )
Steve_Corbin (anonymous) says...
Nothing wrong with a profit or business. I usually have channel 18 on in the early morning, don't have a home radio.
The only problem I see is what would happen if a "gentleman's club" wanted to be a sponsor of a game?
September 16, 2011 at 7:42 a.m. ( permalink | suggest removal )
methusla (anonymous) says...
" The city’s current policy is to have no commercial content on the channel, though Zimmerman pointed out they aren’t following it since KVOE’s radio content and advertisements are currently broadcast on channel 18. "
Just another example of how the City Commission makes/adopts policy and doesn' t abide by that policy ! Who is it that owns KVOE radio, another example of who really runs the show, when it comes to City of Emporia/City Commission policy and decisions ???
I have nothing against anyone making a little money ... but when it comes to government policy, when a govt./city policy is adopted, made it should be upheld/enforced and apply to absolutely " EVERYONE " ! Also, since the City/taxpayers are paying for the broadcasting of channel 18, then that channel should be primarily used for broadcasting official City events, emergency broadcasts, public City Commission Meetings and not for private or publicly owned businesses to run advertising or any event for profit !
And since, the taxpayers are paying for what is broadcast on channel 18, I believe that allowing any private or publicly owned business to use Channel 18 to advertise on, should be voted on by the taxpayers, who will be footing the bill and possibly realizing no return on allowing advertising on Channel 18 .
I would like to see/know exactly how much KVOE pays the City to be allowed to advertise on Channel 18 ?
Does the owner of KVOE have any idea what an 30 second commercial spot on WIWB, KTKA, KAKE or any of the other T.V. stations would cost ?
This " MONEY GAME " that is/has been playing out in Emporia for some time now is/has been benefiting a certain few people and not benefitting the City of Emporia or its taxpayers ! I believe that it is way past time to stop handing out taxpayer funded " MONEY/SERVICES " that profits/benefits the few and start recouping some of the taxpayer money that has been/is or may be " GIVEN AWAY " , so that taxpayer taxes may just be lowered, a lttle !
AAJMO
September 16, 2011 at 8:18 a.m. ( permalink | suggest removal )
Steve_Corbin (anonymous) says...
It sounds like everyone is counting on ole MORAN coming to the rescue with the fema money.
September 16, 2011 at 9:03 a.m. ( permalink | suggest removal )
Steve_Corbin (anonymous) says...
Has the access to the property been discussed and just not reported on?
Is the state going to give them rights to entrances off the highway?
Or does the city have to buy some land from Waechter for a street off of Americus road to the property?
September 16, 2011 at 9:11 a.m. ( permalink | suggest removal )
netloafer (anonymous) says...
I sent Sen. Moran a lengthy note about Fanestil from my perspecitive. I warned him that he might get himself tangled in a briar patch.
This deal has a real aroma about it. It looks like crony capitalism at its very worst. I think the deal needs to be investigated.
I'm all for free enterprise, especially when the entrepreneurs are willing to risk failure to see their dreams come true. This deal is about everyone else bearing the burden of a connected businessman's malinvestment.
I reminded some friends this morning that this is supposed to be Republican country and that Republicans are supposed to be about free enterprise and the risks that come with it.
Something's clearly missing.
September 16, 2011 at 9:13 a.m. ( permalink | suggest removal )
Blue_Dog (anonymous) says...
Steve according to previous articles this property has highway 50 access. Question that hasn't been answered is where will 2nd access go? 2nd access I think is required for emergency access, etc. Does this 12 acres backup to a surrounding road?
September 16, 2011 at 9:51 a.m. ( permalink | suggest removal )
create (anonymous) says...
The Gazette needs to print the full story on Smoots's proposal and include his marketing information as well. Right now, I truly believe we don't know the entire story. And that is what is "clearly missing" here, netloafer, some real research and not just quick stories.
September 16, 2011 at 10:14 a.m. ( permalink | suggest removal )
netloafer (anonymous) says...
I agree. There needs to be some in-depth digging. Unfortunately the Gazette doesn't have an investigative journalist on staff. That would cost $'s they don't have.
It could be that in the end this is a great deal But, my instincts say something is really rotten about it all.
September 16, 2011 at 10:38 a.m. ( permalink | suggest removal )
netloafer (anonymous) says...
Someone asked in another forum about the value of the tax abatement. Based on 2010, the tax abatement would be worth $150-200K to Mr. Smoots. Add that to the $280K in property purchase, about $200K in infrastruce costs, and $1.6 million from the feds (with the county as his backstop) and this has the looks of a really good deal for someone.
September 16, 2011 at 10:51 a.m. ( permalink | suggest removal )
b3bill (anonymous) says...
What year did Smoots purchase Fanestil's?
September 16, 2011 at 11:05 a.m. ( permalink | suggest removal )
methusla (anonymous) says...
What I know for sure is, this property is in very close proximity to one of the most dangerous intersections in Lyon County, quite possibly the State and there is going to be numerous trucks, etc., entering and exiting this property, which will undoubtedly add to the danger factor ! West highway 50 is one of the busiest East-West major arteries into and out of Emporia and also has a reputation as being one of the " deadliest " , and that is not taking into account the proximity to Flying J truck stop either !
Has anyone ever considered the potential added traffic problems this idea, may create ?
What I would like to know is, why did the Smoots' turn down the former proposed site, which was in an established Industrial Park, that was already owned by the City or why the Smoots' dont use the land they already own ?
Is the City/City Commission going to continue to " Kowtow/give in " to the threats/tantrums of grown " Children ", such as the Smoots' or anyone ?
It is my contention that the Smoots', in threatening to leave Emporia and move to Lebo, if they could not get their way, was just a delaying ploy to force the City into seeing things their way and giving them what they want, " sort of like a child, threatening to run away from home, if they don' t get their way or what they want " . Well, in my opinion the City/City Commission should have " called " the Smoots' " Bluff " and seen just how far the Smoots' would have carried this " blackmail " of the City . After all the end product is going to cost $400,000 + and 17 jobs, anyway and remember the Smoots' had already spent most or all of the FEMA grant and were running out of time, which would have meant that they or the County/taxpayers would have had to pay the FEMA money back !
Yes, I agree, this whole comedy of errors smelled/smells to high heaven, especially when the Smoots' had a perfectly good offer from the City for a location at the beginning of all this !
AAJMO
September 16, 2011 at 12:02 p.m. ( permalink | suggest removal )
methusla (anonymous) says...
P.S.
Exactly how much study and questioning was done by the City/City Commission on this " Comedy of Errors " ?
September 16, 2011 at 12:04 p.m. ( permalink | suggest removal )
Steve_Corbin (anonymous) says...
Blue_dog,
I have driven out there and did not see any highway access, maybe I missed it. And you can't just install a driveway off a state highway anywhere you want. As I did not go to the city meeting, I just thought the Gazette reporter who did,could provide some details on that aspect.
September 16, 2011 at 12:54 p.m. ( permalink | suggest removal )
methusla (anonymous) says...
b3bill,
According to what I can find out, the original Fanestil that was built and started in 1942 became Fanestil S&S Quality Meats LLC about 2005 . But may have been purchased by the Smoots' in the latter part of 1990 or first part of 2000.
About Fanestil S&S Quality Meats LLC .
Our records show it was established in 2005 and incorporated in Kansas.
http://www.manta.com/c/mmc724m/
September 16, 2011 at 3:04 p.m. ( permalink | suggest removal )
Blue_Dog (anonymous) says...
Steve,
I agree I thought that all the "obrien" property access was bought by KS DOT when hwy 50 was widened and right of way was acquired. Was told by RE agent involved that only property in area of corner was access rights purchased by state.
September 16, 2011 at 3:10 p.m. ( permalink | suggest removal )
tourguide (anonymous) says...
I looked this property over a few months ago for my company. There is an access off Hwy.50 ( rd170). It is aprox 1200'-1500' west of Americus rd (G). It is unimproved at this time. I also was concerned about increased truck traffic from off Hwy 50 to plant. Our terminal would have required 30+ acres & 2 drives. There is no access to rd G at this time. An easement across Weachter property would be required. WE found this area would not work safely.
September 16, 2011 at 3:53 p.m. ( permalink | suggest removal )
b3bill (anonymous) says...
Meth,
From what I read on
http://www.fanestils.com/fanestils/we...
it seemed like they would had to have owned it for a while before 2005. But anyhow, they've owned the place for several years.
The big flood in 1998 and other years in the 1990's on the Cottonwood River that got into or threatened Fanestil's were not ancient history or just local folk lore. Smoots bought the property knowing full well what the flood potential was. If he wanted to move, he could have been budgeting with his own money to make the move all these years. He could have applied for a business loan without getting into the tax payer's pockets to make the move.
September 16, 2011 at 4:09 p.m. ( permalink | suggest removal )
b3bill (anonymous) says...
Why all the concern about access to Fanestil's new location along Highway 50 or being near the Americus Road intersection???
Don't you guys have confidence in how the roads have been designed in that area in recent years, such as just to the east with the round abouts being too small for the trucks, or the goofed up intersection at 12th and Graphic Arts, or the goofed up intersection at 15th and Graphic Arts?
I'm confident the access to Fanestil's new location will follow suit and be screwed up somehow and then have to be corrected, ending up costing the tax payers even more.
September 16, 2011 at 4:32 p.m. ( permalink | suggest removal )
methusla (anonymous) says...
Oh yea, the " Roundabout " and round and round we go and where we end up, is anyones " guess or duress " !
I had safely negotiated Emporia intersections for going on 55 years now, with no problems, I might add .
I just guess, I and others who have driven a while are a little more observant and pay better attention while driving, than the new breed of drivers !
I negotiated, with some difficulty the wonderous " Roundabout " one time and one time only and will never again visit that " abaration " of vehicular stupidity !
AAJMO
September 16, 2011 at 5 p.m. ( permalink | suggest removal )