Some simply do not believe Bob Myers, city attorney for Newton, when he tells them how much the city has spent on a project to build a proposed manufacturing facility for New Millennium Wind Energy in the Kansas Logistics Park.
The project carries a $39 million price tag, with the city issuing $10 million in industrial revenue bonds. Bonds not yet issued — as bond companies are in the due diligence phase before bonds can move forward.
That leaves the city with little already spent specifically on New Millennium.
"Nothing," Myers said. "We’ve spent zero. People are talking about the millions of dollars we have spent on New Millennium. All the money we have spent was on the Kansas Logistics Park — that’s for all the properties out there including Tindall and future companies that may locate there."
The city and county have spent about $11.6 million on the logistics park to date — there’s been an additional $24 million of state and federal funds spent on the park.
And while those numbers are big — they are not tied to one specific company. The money spent was for roads, water lines and rail lines — infrastructure used to create the park.
"The streets are the streets, the drainage is the drainage and the rail is the rail," said Lunda Asmani, assistant city manager for Newton. "Any company that locates there will use those things. They were not designed for any specific industry."
Asmani said property taxes have not been used to pay for the construction of the Kansas Logistics Park. Funds have come from sales taxes and utility funds.
The sales tax funds come from a one cent tax added in Newton by public vote. The vote established a sales tax split between property tax relief and economic development.
"Those sales tax funds, based on the public vote, can only be used for economic development," Asmani said. "Half is to be used for property tax relief. The other 50 percent was to be applied to economic development in the community. ... For water and sewer upgrades we use water sewer funds. These are utility revenues generated by fees, they are not property tax dollars."
Tindall, a prestressed concrete manufacturer from Spartansburg, S.C., was the first company to announce plans in Newton. The company has engineered and built a prototype for a new type of base for wind turbine towers. They are taking orders for that base.
They purchased more than 200 acres of land in the KLP, and are paying property taxes on that land until they build.
Just like New Millennium, they don’t qualify for tax incentives until they meet benchmarks.
In the case of New Millennium, they are responsible to repay the city for any a staff time or engineering that happens.
"We selected a design build team for the facility, and a great deal of the work of designing the facility has been done — our deal with them was we would include that in the bond, but until it gets to the bond it is their expense to incur," Myers said.
So for now, Myers is telling people the city has spent nothing on New Millennium.
The same is true for the Kansas Department of Commerce — which promised New Millennium about $1.5 million in incentives. None of those incentives have been paid — and according to the contractual agreement with New Millennium, they can’t be paid.
The state will give the company a $500,000 grant if they break ground, and another $250,000 if a facility is completed. There are three other $250,000 payments — each with a requirement of creating jobs. If New Millennium hits those benchmarks, they will get the grants. If they don’t meet those marks, the money will not be paid.
"The department is working very hard to use our toolbox, we have incentives and programs to recruit companies to Kansas and expand our economy," said Dan Lara, spokesman for the department.
Newton hasn’t paid any incentives, either. New Millennium has yet to meet any bench marks for those.
The bond issues have been placed on hold as New Millennium works to complete engineering of their product and seeks investors for the project.
"We want money in the bank," said New Millennium spokesman Bruce Russell. "We want people to know this is not a short term thing. ... We want this to be a success."
The Kansas Logistics Park was born Nov. 23, 2009, when the city and county commissions voted to move forward with the project. At the time, there were no companies committed to coming if the park was built.
Tindall opened those gates — entering into an agreement with the city in December of 2009. New Millennium came along in July of 2011 — more than a year and a half after the park was approved.
In November of 2009, the city and county took a risk when they agreed to move forward with the KLP, taking a "if we build it, they will come" approach. And while no one has actually built a facility, Myers said it was the right move for the city to make — and no one has put all the eggs in the alternative energy basket to try and fill the Logistics Park.
"I think this will be huge, if people will be patient," Myers said. "We are in a good position right now, if we just don’t shoot ourselves in the foot."
There have been other companies to inquire about locating in the logistics park — though to date no other company has signed an agreement.
"We are getting a lot of other industries inquiring," Myers said. "We have been hearing for some time that manufacturers in general are sitting on money. They are wanting to start new project and facilities, but the political climate is such that they don’t know when is a good time to get started."