Lebanon approved real and personal tax abatements for Ken’s Foods on Monday to further its plans for a 288,000-square-foot expansion project totaling $39.7 million.
Molly Whitehead, Boone County Economic Development Corporation Executive Director, approached the council on behalf of Ken’s Foods to request a four-year abatement with a 25% step down every year. The abatements will begin as a 100% abatement for the first year, 75% for the second year, 50% for the third year and 25% for the fourth year. Whitehead stated that the abatements are estimated to save the company $1.7 million over the term with an expected positive taxpayer impact of almost $5 million in assessed value and taxes.
“We anticipate that it would have a $4.7 million assessed value impact for you all and a $35,000 (local income tax) impact,” Whitehead said. “You are coming out ahead in this sort of deal quite significantly actually–about a 2.8 return is what we estimate.”
Whitehead stated that when Ken’s Foods first opened in Lebanon in 2018 in the Lebanon Business Park, it expected to hire 150 employees. After five years of operations, the business has increased its employment to over 220 employees with a wage increase around $4 per hour above the initial anticipated wage rates. Ken’s Foods intends to employ another 10 employees following the expansion.
“Ken’s did receive an abatement when they first located here in Lebanon,” Whitehead said. “That was a four year abatement–first three years at 100% (and) year four at 50%. That has worn off at this point or is probably in its very last year from when that was assessed.”
Whitehead stated that the abatement would help offset costs associated with the expansion project, which is expected to cost $29.4 million for real property and $10.3 million for personal property, such as equipment and machinery. The project is expected to almost double the square footage of the facility from 320,000-square-feet to just over 600,000-square-feet. Ken’s Foods is expecting to continue its manufacturing of over 60 different flavors of salad dressings and Sweet Baby Ray’s barbecue sauce locally within the confirmed economic revitalization area.
Whitehead argued in favor of the abatement, highlighting Ken’s Foods’ above average wage for the area, which exceeds over $27 per hour, benefits package, which includes health insurance, accident insurance, identity theft insurance and more, and nonprofit support, such as its support of around 48 nonprofits and organizations, including Boone County Mentoring Partnership, Boone County Senior Services, Habitat for Humanity, Lebanon Community School Corporation, Lebanon Little League and more.
“If they are not the most involved, they’re definitely that top tier of companies that we have here,” Whitehead said. “Certainly, we look forward to that expansion.”
Lebanon Mayor Matt Gentry stated that Ken’s Foods’ participation in projects with the city and local nonprofits should justify the award of the abatements.
“I think Ken’s has been kind of a stellar employer for our community,” Gentry said. “They’ve been a great example of what community partnership looks like. As (Whitehead) highlighted, they’ve been very engaged with our nonprofit communities, again providing wages above our average–all those things you want to see with employers. They’ve been a very important community partner for us, so we’re excited to see them want to expand.”
Councilman Brent Wheat echoed Gentry’s statements, concluding that Ken’s Foods should be utilized as an example for future businesses to follow when requesting real and personal tax abatements from the Lebanon City Council.
“Given our current situation, we don’t feel really a great need to do a lot of these abatements now, but looking at Ken’s Foods, they have been a great partner for the community,” Wheat said. “They’ve been a good business providing good livelihoods, so I guess I’m letting other businesses know if you intend to seek concessions from the council on things like this, it does pay to work well with the community.”
The council unanimously approved the four-year real and personal tax abatements for the expansion project.