Duncommun chose to stay, learn more about why:
The incentive package offered by the city to help induce Ducommun Inc. to expand its Parsons facility could reach almost $4 million.
Jim Zaleski, the city’s economic development director, reviewed the incentive package with city commissioners during their Monday evening meeting. It was the first time the proposed incentives have been discussed in an open meeting.
Instead of relocating its local facility to Coffeyville or elsewhere, Ducommun Inc. announced in early March that it would stay in town. On Thursday, John Kelley, Ducommun vice president and general manager of the Parsons plant, announced the company, pending board of directors’ approval in early May, will build 37,000-square-foot and 14,000-square-foot additions. The parking lot also will be expanded and a new drive built to handle heavy truck traffic. The expansion will add over 80 new jobs.
The Parsons City Commission approved a resolution on Jan. 28 that stated the city intends to issue up to $6.5 million in industrial revenue bonds to support the expansion. The company will be responsible for paying off the bonds, but the bonds will trigger incentives from the city, the largest of which is a 10-year property tax abatement on the additional amount of tax caused by the improvement. Ducommun will continue to pay the full amount of taxes on its existing building.
Zaleski said on Monday the city has offered a 100 percent tax abatement for the 10 years, instead of the abatement percentage gradually declining over that period as is most often the case. That would amount to a savings of $3.7 million. The bonds also would come with about $300,000 in savings in construction sales tax, and Zaleski said the incentive package also includes the city paying $45,000 to $60,000 in bond fees.
Additionally, the city would pay the company $300,000. Zaleski said $100,000 would come from the city’s stormwater utility fund in support of the company’s construction of divergent storage drainage or some other way to remove stormwater from the grounds. The remaining $200,000 would come from the city’s industrial fund. While that money won’t completely empty the industrial fund, it will deplete it significantly, however, Zaleski said the expansion project is exactly the type of project the fund is designed to support.
Zaleski said the city is working on Ducommun’s timeline, but he estimated the city staff will seek commission approval of the incentive package on May 16.
Commissioner Jeff Perez asked about updates through the process of the expansion, and Zaleski said there could be quarterly or semi-annual reports on the process as well as hiring levels at the company. He said hopefully Ducommun officials can attend commission meetings for updates.
“They’re going to be in a lengthy construction, so this won’t be as short-term as some of the contracts you’ve seen come out of economic development, but all of this will be tied to them fulfilling their expansion program to some extent,” Zaleski said.
Kelley said on Thursday if Crossland Construction Co. is able to break ground on the project in June, the work could be completed in January.