I want to continue to discuss the anatomy of “economic development” and how our entire legislative district can benefit from taking a visionary approach to growing great jobs, which in turn, grows our tax base and our communities.
In 2002, I had just ended my term as chairman of the North Platte Area Development Corporation (prior to merging with the North Platte Area Chamber of Commerce). We had just been contacted by Wal-Mart regarding their need for a new Food Distribution Center. Wal-Mart had limited their search to North Platte, Nebraska, and a town in eastern Wyoming. After reviewing possible sites to locate, Wal-Mart chose their current site, however, we were required to acquire and deed to them the site as part of the proposal to bring them to North Platte. As chairman of the North Platte Community Development Authority, we worked with the Development Corporation to apply for Tax Increment Financing (TIF) to generate the funds to purchase the Wal-Mart Food Distribution Center (DC) site and the adjacent land to the west.
TIF captures the “increase” in property taxes that are generated from the improvements created from the new project. The projected revenues from this income stream is monetized in to a bond that can be used to cover some of the land and infrastructure costs to build the project. Once the bond is repaid, or 15-years have passed (whichever comes first), the newly created tax base goes to the taxing authorities from that point forward. The original tax base always stays in place just as they were.
In the case of the DC project, the $3 million bond was issued on March 2, 2002 and was fully repaid on November 6, 2012. The initial tax assessed value of the land was approximately $180,000 and was generating $4,000 in annual property taxes. After the project was built, the tax assessed value rose to just under $19 million increasing the property tax to just over $400,000/year. The $4,000 continued to go to the taxing authorities, and the balance went to repay the bond. The gross property tax payment was paid by the DC.
Over the 10-year bond, the property value rose to almost $26 million, taking the annual property tax to just $547,000/year. Since the bond was repaid in 2012, all of the new tax base has gone to the taxing authorities. However, in addition to the significant growth in tax base, here are some of the additional benefits of attracting this company to North Platte.
Today, the company employs over 600 workers who travel from up to a 75 mile radius of North Platte to work a schedule that they choose. The average hourly worker makes just over $47,000 annually plus incentives and benefits. Their annual payroll exceeds $35 million per year. There are over 240 trucks arriving inbound seven days per week, and approximately 190 trucks out bound. The center serves stores in a 10-state area.
As an added benefit, the DC regularly has loads of perishable food that does not meet the DC specifications. This could be “close dated” products, or products with slight imperfections. These products are rejected for retail sale, but donated to the Heartland Food Bank and the area food pantries including the Salvation Army. The dog and cat food products are donated to the Humane Society. Any food that does not meet quality standards is discarded.
In addition to the direct employment generated by the DC, there has been significant new business generated from the DC project. The funding not only allowed for the purchase of the property where the DC is currently located, but also provide funding to purchase the adjacent land west that became the new “Twin Rivers Industrial Park”, and install some of the public infrastructure. This development has led to the new UPS facility, the new Miller/Coors warehouse facility, and the creation of several new attractive warehouse buildings that can be available for immediate use by a new company wanting to locate to this area. A second truck stop located in the SE quadrant of the Newberry and I-80, and the addition of the Inland Truck Parts repair center just north of the DC are also benefits of the DC development. These new businesses would not have happened without the DC locating in North Platte.
Another benefit of the DC, is their job structure. Hourly employees can literally create their own work schedule to accommodate their lifestyle. If you are farmer or rancher looking for a second job that fits around your schedule, you can work days or nights, one day, or 7 days. You can also work on a seasonal basis. These types of job features help bring and keep quality workers to District 42 and allow them the space to raise families or support other businesses in our communities.
The DC is another example of a business that has made their home in North Platte, but has had a significant impact throughout the region. Continuing this growth will help reverse the out-migration of our population base, grow our schools, improve our retail offerings, and strengthen our tax bases.
Constituents can reach Senator Mike Jacobson at email@example.com or 402-471-2729. Our door is always open!