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Rural
Kansas Uses Best Attributes to Woo Industry
By
Laura Corbin
Don't
rule out rural Kansas communities when it comes to competing
for industry. Often, they have everything a company could
want and more.
"Rural
areas are very competitive," said Kent Heermann, head of
the Regional Development Association of East Central Kansas.
"A lot of times, the incentives we're able to offer are
the closers on a deal. For a company to locate anywhere,
whether it's rural or metropolitan, it obviously has to
make good business sense for them, but rural areas often
are more able and more willing to offer incentives that
clinch the deal."
Heermann's
area has benefited greatly from having just what business
is looking for--an available labor force, workers who have
a good work ethic, available land at a good price, well-designed
infrastructure--along with some very favorable incentives.
Caterpillar,
for example, began production in the fall of 2000 in its
new 115,200-square-foot manufacturing facility in Emporia,
Kansas, located in Heerman's region. The plant employs about
30 people now, but will be up to at least 100 very soon,
Heermann said. The company manufactures Mobil-TracŪ System
components for use in the company's paving, agriculture,
defense-related, and other products.
Caterpillar
is the world's leading manufacturer of construction and
mining products, diesel and natural-gas engines, and industrial
gas turbines.
"We
chose Emporia because we liked the people, the favorable
business climate, the access to major transportation, the
quality of life, and because we knew we had a great base
of skilled workers from which to build our employee team,"
Facility Manager Tami Nelson said when the plant was dedicated
in April 2000. "The team approach taken by the city of Emporia,
Lyon County, and the Kansas Department of Commerce and Housing
reinforced our decision to locate time and time again."
During
its three-year search Caterpillar looked in a number of
states, and at a number of Kansas locations before settling
on Lyon County and Emporia, Heermann said. "They were looking
at communities of our size that had good transportation
systems, access to interstate highways, adequate power and
labor force, and a good quality of life," he added. "They
liked a university environment, and each of the Kansas communities
they were looking at had a college or university. They also
wanted proximity to a technical college."
Emporia
has a population of 25,500; it is located in Lyon County,
which has a population of 35,000 and a labor force of 19,550.
It is the home of Emporia State University, which offers
bachelor's and master's degrees, as well as Ph.D.s.
"Caterpillar
chose Emporia based on its criteria--site, labor and a lot
of productivity," Heermann said. "For the particular needs
they had, we fit the project very well."
Emporia,
and Lyon County, not only were able to meet those criteria,
but they could also bring other attributes to the table--those
all-important incentives.
The
state of Kansas has a number of incentives available to
companies locating anywhere within the state, including
training grants based on a formula that takes into account
the number of new jobs being created and other factors.
"Any business that's adding jobs, whether they're new or
expanding, is eligible for state training grants," Heermann
said. "The company can design its own curriculum and bring
in its own employees to do the training, or it can work
in conjunction with the technical or community college or
other academic institution to deliver the training. Based
on the state's formula, a certain amount is allocated for
the training grant. The company keeps track of allowable
expenses-training of instructors, housing, travel; then,
receives reimbursement from the state."
The
state also offers job tax credits for each new job created.
In Kansas' five metropolitan areas, that tax credit is $1,500
per job. "Non-metropolitan enterprise zones-the rural areas-provide
an enhanced credit for job creation," Heermann said. That
enhanced credit is $2,500 per job.
"Local
communities also can choose to give tax abatements to qualifying
manufacturing and distribution companies that deal in interstate
commerce," Heermann said, noting that such incentives are
performance-based. "In Emporia, we can provide 100 percent
tax abatement for 10 years on a company's building and 100
percent abatement for five years on equipment. We also own
industrial land, and we have the ability to include land
at a reduced price in an incentive package, which, again,
is performance-based."
By
"performance-based," Heermann means that the company receiving
the incentive package agrees to a threshold of investment
and creation of jobs over a given period of time.
"We
also have a half-cent sales tax to infuse cash into infrastructure
in the area," Heermann noted. "That can be for streets and
roads, water, sewer or building costs. These are fixed assets
that stay in the community and that can be used to recruit
other companies."
Caterpillar
took advantage of all incentives made available to it--
both state and local. Other companies have been drawn to
eastern central Kansas as well, Heermann noted. "We have
a good diversified business base."
Among
the largest employers are IBP, a beef processing plant with
2,600 workers; Birch Telecom (410 workers); Dolly Madison
Cake Co. (725 workers); Hopkins Manufacturing, which makes
plastic components for the automotive industry (455 workers);
Modine, which makes radiators for light trucks and passenger
cars (400 workers); and the new Menu Foods plant, which
makes private-label canned pet food (170 workers).
"Companies
ultimately are trying to make a good business decision,"
Heermann noted. "Rural areas have more of a tendency and
ability to give larger incentive packages and to more aggressively
go after projects. Metropolitan areas may not be as generous."
He
reiterated, "When it gets down to a short list, rural communities
can be very competitive."
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