Springfield City Council approved the next step in continuing The Kraft Heinz Co.’s (Nasdaq: KHC) investment in the Queen City at its June 29 meeting.
The council-approved ordinance authorizes an industrial development project for the company and allows the city to issue Chapter 100 industrial revenue bonds of up to $48 million to help fund new manufacturing lines and equipment upgrades at the 1951 E. Meadowmere St. plant.
Council gave the green light for the city to create a preliminary funding agreement with Kraft Heinz in April after approving a resolution of intent to enter into the agreement. The project was competitive with Kraft Heinz plants in other markets, company officials have said.
The agreement provides personal property tax abatement of 75% for five years on the purchase of the equipment. The city’s policy is typically to grant 50% abatement for 10 years. In the deal, Kraft Heinz also ensures at least 950 full-time jobs would be retained at the local plant, but no new jobs would be added. Employees have an average salary of over $45,000, and total annual salaries and wages for the plant are approximately $68 million, according to bill documents.
Council passed the development plan 8-1, with Councilperson Mike Schilling casting the opposing vote.
“I know it’s been a value to the community for many years, but I'm having trouble accepting that this multi, multibillion-dollar, international company insists on seeing some of our property tax money used to subsidize the project, especially in a time of a pandemic when the country and communities ... is suffering from an economic downturn,” he said. “I don’t know why this company can't turn some of its profits back into equipment and maintenance.”
This marks Kraft Heinz’s third Chapter 100 bond-financed project in Springfield since 2012. That year, council approved $26 million toward expansion of the plant’s cheese and pasta production, and in 2016, bond-funded equipment purchases totaled up to $36 million.
Other council members echoed the importance of maintaining jobs at the plant.
“Whether it’s Kraft Heinz or Costco, … we’re competing with other cities for these well-paying jobs,” said Councilperson Matt Simpson. “It’s important that we have in our arsenal the ability to provide incentive packages like this.”
Councilperson Phyllis Ferguson said the development plan is a “vote of confidence” for Springfield by the company.
“I look at it as an investment in job security in our community,” she said. “They’re not investing the dollars that they are investing because they're going to leave.”
The Springfield plant – the largest manufacturer in the company’s cheese and dairy network – makes products such as Kraft Singles, Kraft Natural Cheese and Kraft Mac & Cheese.
During Springfield-Greene County Health Department Director Clay Goddard’s community health update, he said he’s working on a face mask ordinance to present to council.
Goddard said the Health Department has been inundated with feedback of masking requirements in Springfield, both for and against a mandate.
“People are tired of COVID-19. We want our normal lives back,” he said. “The only problem is, and I can assure you this, the virus is not done with us.”
Goddard said he met with City Attorney Rhonda Lewsader on June 29 to begin work on the recommendations. He indicated they’re reviewing language from the 2011 law that banned smoking indoors through the city. “There are some lessons learned from our Smokefree Indoor Air Act that are applicable and worked very well in that situation.”
Goddard said he plans to meet with local infectious disease doctors to discuss their views on what is needed based on community COVID-19 data.
The Health Department’s COVID-19 dashboard showed 307 confirmed cases as of July 2. That’s up from 197 cases on June 1 and 73 cases in March, when data collection began. Health Department officials have said Greene County is experiencing community spread, which refers to incidences in which the source of the infection is unknown, according to the Centers for Disease Control and Prevention.
“We should probably be using every tool we have to combat the virus, but like many things … it’s not cut and dried,” Goddard said. “Crafting an effective ordinance is complicated.”
Several council members expressed support for a face mask mandate.
“We’ve already asked the citizens of Springfield to make great sacrifice,” said Councilperson Andrew Lear. “I believe that anything and everything we can do to prevent that and slow that down and keep it from reoccurring … and is within our power, we should do.”
Councilperson Craig Hosmer questioned the constitutionality of the mandate, which Goddard said has been vetted since the 1918 Spanish flu when masking also was considered.
A face mask mandate went into effect June 29 in Kansas City, and a similar edict became effective July 1 in Jackson County, according to Kansas City Star reporting.
Similarly, Kansas Gov. Laura Kelly ordered that beginning July 3, the state’s residents are required to wear face masks in public places.
According to an SBJ.net poll taken June 26-July 2, 53% of the 10,963 respondents voted that face masks should not be required in public places in Springfield.
After being tabled at the previous meeting, council members voted on the annexation and rezoning requests from developer Titus Williams for roughly 10 acres at 851 W. Plainview Road, where he was planning a multifamily complex.
Williams, of Prosperiti Partners, applied for the requests under Burning Tree Consulting LLC, which owns the property, according to Greene County Assessor records.
The annexation request passed unanimously, but council was split on the rezoning request, which ultimately failed 4-4 with a recusal from Simpson because his family owns nearby property. The passage required a supermajority vote because of a protest petition filed against the ordinance.
Many neighborhood members spoke in opposition of the project at the June 1 public hearing, including nearly two dozen statements sent via email to city staff. Concerns included the project lowering property values, increasing traffic on Plainview Road, water runoff and increasing student counts to the school system. Several council members echoed worry of the distance from the fire facilities and the increased traffic.
Williams said in an interview that he’d been working with neighbors to address those concerns, including reducing the number of units in the development. The requests with the city follow similar denials from Greene County officials.
Williams said he was originally planning a multifamily complex with resort-style amenities. Now, he said he’s going back to square one and still plans to develop on the property, which is zoned for single-family use.
“It reduces the number of units we can put on the property, and it restricts what I can build,” he said. “But, ultimately, we’ll develop something.”
He anticipates finalizing plans in the coming months and returning to Planning & Zoning to parcel the individual lots, with development possibly starting in first quarter 2021.
Other action items
• Council approved fiscal 2021 hotel/motel tax allocation budgets for the Springfield Convention & Visitors Bureau Inc., the Springfield Regional Arts Council Inc. and Springfield Sports Commission. The three agencies receive partial funding from the hotel/motel tax each year, which is expected to record a $1 million drop in fiscal 2021 from COVID-19 impacts to local tourism. The CVB is approved to operate on a $3.1 million budget, of which $2 million is expected to come from the tax. The SRAC was approved for $29,000 from the tax and the Sports Commission is set to receive $44,000, according to bill documents.
• Council heard the first reading of a $5 million improvement project at the Noble Hill Sanitary Landfill. If approved, the city will accept the bid from general contractor Carson-Mitchell Inc. The project will include an updated entrance, a new scale house and new scales to replace the 25-year-old equipment, according to bill documents. The Department of Environmental Services is requesting to dip into reserves of $6.2 million for the work.
• Springfield Police Chief Paul Williams presented a new feature on the Springfield Police website that is aimed at increasing transparency. The landing page, dubbed “Where We Stand,” includes information about training, traffic stops, use of force policies, crime data and officer-involved shootings over the last 12 years. Williams said the department has been inundated with questions following the officer-involved deaths of George Floyd in Minnesota and Breonna Taylor in Kentucky.
Builders predict costs will remain elevated well into 2021.
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