McPherson County is poised to make hundreds of thousands of dollars from Mid-Kansas Cooperative’s new Groveland warehouse, although it will have to wait 10 years to begin collecting the funds.


McPherson County is poised to make hundreds of thousands of dollars from Mid-Kansas Cooperative’s new Groveland warehouse, although it will have to wait 10 years to begin collecting the funds.
County commissioners voted last week to issue industrial revenue bonds, or IRBs, on behalf of MKC. The issuance was negotiated with the cooperative to encourage it to build its new warehouse facility in Groveland. The IRBs will relieve MKC of new property taxes on improvements made at the location, allowing MKC to build facilities without paying new taxes for the next 10 years.
Had the county not issued the IRBs it would be able to begin collecting property taxes on the property in 2012. According to County Administrator Rick Witte, however, McPherson County decided to act aggressively to keep MKC from looking elsewhere for lower rates.
“Had they taken their $5 million building and gone to Harvey or Rice County, then in 10 years that county would collect revenue off that facility,” Witte said.
That would mean that hundreds of thousands of dollars would be going into another county’s tax coffers. Instead, McPherson County is set to start gaining around $50,000 each year at the end of the 10-year period.
In light of this, Witte said, the county will be making thousands of dollars rather than dipping into the red.
“There were no taxes currently being paid that were forgiven” he said.
The limited property taxes already in place are still being collected, which, according to a cost-benefit analysis issued in December of 2010 on the project, amount to about $2,000 a year.
As such, the county will continue earning money on the property through the 10-year abatement. The cost-benefit analysis suggests when the IRBs mature in 2022, McPherson County will have gained $157,174 from the project, even after issuing the tax abatements.
That amount, according to the analysis, was contingent on the hiring of 11 new direct or indirect employees at the new Groveland location. MKC Chief Financial Officer Danny Posch, who originally presented the analysis to the county commission in January, could not immediately be reached to verify whether or not that had happened, but Suzy Larson, an employee at the Groveland facility, said 20 MKC employees now work at the facility. While she could confirm that some had been hired new for the location, she could not say how many.
Larson said several contracted employees, which would be classified as indirect employees in the analysis, also were now working at the location.