RDA Annual Report 2017

ABOUT US

The Regional Development Association of East Central Kansas (RDA) is the lead economic development organization for Lyon County and the Emporia area. It is a collaborative effort of the Emporia Area Chamber of Commerce and Visitors Bureau, Emporia Enterprises, the City of Emporia, Lyon County, Flint Hills Technical College, Emporia State University and Emporia Main Street. The RDA is located in the Trusler Business Center with the Emporia Area Chamber of Commerce and Visitors Bureau, 719 Commercial Street, Emporia, Kansas 66801. RDA President Kent Heermann may be contacted at 620-342-1600 or kheermann@emporiarda.org. For further information go to www.emporiarda.org.

RDA BOARD OF DIRECTORS 2017

Voting Members
Rick Tidwell, Emporia Enterprises Representative
Dan Slater, Lyon County Representative
Rob Gilligan, City of Emporia Representative
Mel Scheller, At Large Representative
Jim Shepherd, Emporia Chamber of Commerce Representative
Jim Kessler, City of Emporia Representative
Pat Wiederholt, Lyon County Representative

Ex-officio Members
Mark McAnarney, City Manager
Jeanine McKenna, President Emporia Area Chamber of Commerce
Marc Goodman, County Attorney, Lyon County
Christina Montgomery, City Attorney, City of Emporia,
Casey Woods, Main Street Director
Allison Garrett, President, Emporia State University
Dean Hollenbeck, President, Flint Hills Technical College

Officers and RDA Staff
Rob Gilligan, Chair
Jim Kessler, Vice Chair
Jeanine McKenna, Secretary
Mark McAnarney, Treasurer
Kent Heermann, President CEcD
Robin Nelson, Executive Assistant

EXECUTIVE SUMMARY

What an exceptional year for Emporia. The Simmons Pet Food expansion announcement on November 1st will have a direct economic impact on Emporia/Lyon County for decades in the future. The ½-Cent City Sales Tax for industrial development was approved by 74% of the voters, extending the funding to December 31, 2034. Then Emporia had three high-quality expansion projects.

SIMMONS PET FOOD EXPANSION

On November 1st Simmons Pet Food announced the Emporia Flexible Packaging facility expansion. This expansion will add substantial capacity for the wet pet food cup, tub, and pouch packaging format for Simmons customers.

The investment is in excess of $39,000,000 with the construction of a new 200,000 sq. ft. production facility, and state of the art processing and packaging equipment. The facility will be north of the Simmons 1300 East Logan Avenue facility. A 121,000 sq. ft. building addition on the 1400 East Logan Avenue facility is proceeding. Simmons renovated the first floor office space in the 1300 East Logan Avenue building into a Care Clinic to serve local team members and their dependents. It will open in early January 2018.

The Emporia Simmons Pet Food campus, will be on 130-acres, with combined square footage in excess of 900,000 sq. ft. in all three buildings.

Today’s full-time employment at Emporia Simmons Pet Food campus is in excess of 500 full-time employees. This initial expansion of 100 employees, has the potential of an additional 100 employees in the next 3 to 5 years. The projected estimated annual payroll with the additional 100 employees is $39,442,000 and in the future with the 200 additional employees is $45,277,000, which equates to an average annual salary of $64,681.

Simmons considered other locations for this project. We made the strong case for Emporia, and at the end of the day, Simmons chose Emporia. It’s been a mutually beneficial partnership for the past 20 years. We look forward to a continuing partnership for many decades in the future.

ANIMAL HEALTH CORRIDOR

The RDA values its membership and association with Kansas City Area Development Council (KCADC) animal health corridor. The regional area includes Manhattan, Kansas to Columbia, Missouri to Emporia, Kansas. According to the 2014 Corridor Asset Survey conducted on behalf of the KCADC Animal Health Corridor, over 56% of the total worldwide animal health, diagnostics, and pet food sales occur in this region.

June 1994, we were contacted by a pet food company, (Simmons Pet Food today) about the possibility of locating a new facility in Emporia. It only took three years for us to convince them to locate in July 1997.

Hill’s Pet Nutrition directly contacted the RDA in April 2007 after another location in Kansas could not provide the “promised” real estate to them. Through the RDA lead team effort, in June 2007 Hill’s announced the Emporia project.

Emporia has a pet nutrition cluster with three pet nutrition companies – Simmons Pet Food, Hill’s Pet Nutrition, and Cargill Pet Food. In 1994, only 41 persons were employed in the pet nutrition cluster. Today, there are over 825 employed. With the recent announcement by Simmons, over the next several years, there will be over 1,000 persons employed with an annual payroll in excess of $60 million. Seven (7) percent of the City of Emporia workforce is employed in the Pet Nutrition cluster.

With all of the pet nutrition companies locating and expanding in Emporia from 1994 to today, tax collections have increased from $82,000 to $1,400,000 annually. Of that total property tax collected, 38% is received by the Emporia School District, 36% goes to Lyon County, 25% to the City of Emporia, and 1% to the State of Kansas.

RETURN ON INVESTMENT

Over the past five years (2012 to 2017), Hostess Brands/Dolly Madison closed in November 2012, which eliminated 543 jobs in Emporia. In April 2013, the new Hostess Brands was created and the bakery reopened. Of the top twelve private companies which include Tyson Foods, Hostess Brands, Simmons Pet Food, Hopkins Manufacturing Corporation, EVCO, CAMSO, Detroit Reman, Hill’s Pet Nutrition, Norfolk Iron & Metal, Birch Communications, VEKTEK, and Better Life Technologies, in 2013 there were 2,804 employees, which increased by 902 employees to 3,249 employees in 2017.

In the past five years nearly 504,000 square feet of new buildings have been constructed at a value of nearly $210,000,000.

Year to date totals are tabulated from the beginning of the sales tax in 1993. The year to date total capital investment $968,689,000 with the construction of over 2,566,168 sq. ft. in buildings and the creation of over 2,100 new full-time jobs. Since 2013, nine-hundred of those 2,100 jobs have been created.

The following table depicts the growth in employment of our top twelve private sector employers with 100 or more employees.

Top Private Sector Employers
In the City of Emporia with 100 or more Employees
Job Growth January 1, 2013 to 2017

Note: Hostess Brands closed and liquidated in November 2012. The assets were purchase on April 8, 2013. The new owners open the plant in April 2013.

SALES TAX RENEWAL

Emporia/Lyon County competed for three high-quality expansion projects. Two U.S. corporations, and one Asian corporation. All three companies visited Emporia, we made the short-list with all three, final location decisions were made before the end of the year. Simmons Pet Food was one of the projects. The other two expansions chose sites in Kentucky, and Missouri. In our debriefing with those two project contacts, Emporia/Lyon County was eliminated based on factors beyond our control.

The decisions was made to place the renewal of the ½-cent City Sales Tax on the November 7th ballot. The November 1st Simmons Pet Food expansion announcement assisted in the passage of the ballot issue by 74%.

EXPANSION/RETENTION

Early in 2017 Birch Communications experienced a downsizing of their operations. The RDA staff worked with all our local, regional, and state partners to assist those affected workers. On February 17, 2017 a job fair was held at the KansasWorks office.

We continue to assist Cargill in their consideration for Emporia building expansions. Discussions are promising for the future.

Fanestil Meats continues to grow their operations. The Phase II expansion discussions are ongoing. Optimism prevails.

Hostess Brands continues to upgrade equipment in the Emporia bakery. New products are being produced, and introduced to the market. The possibility of future expansions are promising.

RETAIL/COMMERCIAL DEVELOPMENT

The Emporia Pavilion lead was developed in May 2013. The developers, and the Emporia City Commissioners approved both the Tax Increment Financing (TIF), and Community Improvement District (CID). In September 2010 site preparation began.

On August 14, 2017 Hobby Lobby had a ribbon-cutting. “The proposed retail development will have up to 258,300 sq. ft. of retail space on the 39 acre tract. The project cost is estimated to be $38,836,951 with $6,069,235 in reimbursement from TIF and CID pay-as-you-go funds. The developer equity/private financing is $30,767,716.”

NEW PROJECT LEADS

The Kansas Department of Commerce (KDOC) business recruitment office continues to have minimal staff. Under the leadership of KDOC Secretary Antonino Soave, the TEAM Kansas marketing program was not implemented to its fullest. The RDA had contributed $15,000 to participate in marketing events. Since a limited amount of marketing events were planned, the RDA requested a refund of $12,500.

Secretary Soave has left KDOC, and Nick Jordan was appointed interim KDOC Secretary.

The Kansas legislature’s auditors are reviewing former KDOC Secretary Soave’s process for awarding consulting and marketing contracts for irregularities. KDOC will be under review, marketing programs may be scaled back.

The RDA is participating at the $10,000 level with TEAM Kansas in 2018.

APPLIED MARKETING

The H.J. Baker Incentive Compliance Agreement (ICA) was approved in September 2015. The project was proceeding until 1st quarter 2016, when H.J. Baker put the project on hold. As you may recall, the total project was an $8.4 million investment with the creation of 25 full-time jobs. In our latest conversations with H.J. Baker, we believe the project is on hold indefinitely.

A long-term business development program takes consistent time, and resources. It’s remarkable to have a success of H.J. Baker in the first marketing effort. Emporia did everything correctly.

In light of a minimum KDOC business development team, the RDA needs to be proactive in their targeted marketing efforts.

Kansas City Area Development Council (KCADC) Animal Health Corridor membership is a strategic regional partnership for lead development. This past year, KCADC directed a project lead to us. Emporia/Lyon County made the short list on this project. In fact, we were the only Kansas community on the short list. We continue to value our regional partnership with KCADC. As approved in the 2018 Budget, we have increased the investment contribution.