News

Jun 01, 2023

Proposed pet food ingredient plant would pay average wages of $72K a year; project seeking $5M in tax breaks

This is a preliminary rendering of a new pre-mix animal food facility that is

This is a preliminary rendering of a new pre-mix animal food facility that is planned for Tonganoxie Business Park.

A proposed ingredient plant for the pet food industry will pay average wages of $72,000 per year, Tonganoxie city council members were told by the Dutch company that is seeking a tax break to locate in the city.

Even entry level positions will start with above-average wages for the area, a representative with DSM Nutritional Products told council members at their Monday evening meeting.

"I can promise you that if you have a son or a daughter that wants a job even as an operator driving a forklift it will at least pay $50,000," said Lance Collard, a DSM plant manager who will be moving from Fort Worth, Texas to run the proposed Tonganoxie facility.

DSM is seeking a package of financial incentives that includes about $5 million in property and sales tax breaks to build the $52 million plant — which is expected to employ 28 people — in the Tonganoxie industrial park.

City council members took no action on the incentives request on Monday, but did get their most detailed look yet at the proposal. The plan calls for DSM to receive a 70% property tax abatement for 10 years. The project is expected to generate about $3.5 million in property taxes over the 10 year period. Under terms of the proposed deal, the company would pay about $1 million of those property taxes, while the remaining $2.5 million would be forgiven.

The company also would be exempt from paying sales taxes on construction materials for the plant, which is expected to produce another $2.5 million in tax savings.

City Manager George Brajkovic said discussions with DSM are proceeding well, but the development agreement that spells out benchmarks the company must hit to receive the incentives was still being drafted. Brajkovic recommended that the council wait on any approvals for the incentives until that document can be presented to the council. He said council members will have that document by their next meeting on June 19.

Council members opened a public hearing on the incentive request, which technically will require the city issuing $47 million in industrial revenue bonds. That hearing was continued until June 19.

No one from the public spoke for or against the project on Monday. City council members said they thought a question circulating through the community was whether the plant's ingredient processing would produce an odor in the community.

The plant's primary product is vitamins that are used as an ingredient in pet foods. Collard said vitamins do produce a smell that is noticeable inside the plant, but he said it doesn't leak to the outside, and certainly wouldn't spread to the general community.

"If you are right outside the door of our Fort Worth facility, you won't smell it," he said.

City Council member Chris Donnelly was part of a group of Tonganoxie officials who toured a DSM plant, and he said the smell was not an issue there.

"You would not know anything different than it was a local feed store where you go get your feed," Donnelly said. "You don't hardly smell anything at all even when you are inside."

Company officials hope to open the Tonganoxie plant in the second quarter of 2025, if the development process stays on track. DSM announced in May that it had chosen Tonganoxie for the project. On Monday, Collard told The Mirror that Tonganoxie was chosen from about 20 other locations in the Topeka and Kansas City area. He said the site's central location in the U.S. and the large number of pet food plants in the region were important considerations.

The 65,000-square foot DSM plant is scheduled to be built next the to existing 300,000-square foot Hills pet food plant. Hills uses ingredients from DSM to produce its pet food products, Collard said. The DSM project would be on about 13 acres near 222nd Street and Kansas Avenue.

DSM, which is publicly traded and has its headquarters in the Netherlands, is one of the largest food ingredient companies in the world, making products not only for the animal feed industry, but also for the food, pharmaceutical and personal care industries, among others.

Brajkovic, who also has toured a DSM facility, said the company seems to have a low turnover rate for employees, and operates "world class" facilities.

"It makes us excited to get this project to this point because we think it is not only a good fit for the business park but for the community itself," he said.