A tax consultant working on behalf of Kraft Heinz Co. (Nasdaq: KHC) last night told Springfield City Council the company’s Springfield plant is in the running for eight new manufacturing lines tied to the production of Kraft Macaroni & Cheese and Kraft Singles.
The new lines would add 100-110 jobs paying an estimated $48,000 per year at the 2035 E. Bennett St. property, said James Gomochak of Incentis Group, a national tax-credit consultancy
“The company is looking at a potential new investment of $40 million to the Springfield facility,” he said.
At last night’s council meeting, Gomochak addressed a pair of bills that would pay the city $47,500 for legal services connected to drafting plans for the issuance of Chapter 100 bonds. The bonds are designed to help employers reduce their tax burden when purchasing new equipment for production. Specifically, Kraft Foods could receive a 50 percent personal property tax exemption for 10 years on capital expansion through the bonds. The city also might consider an increased exemption level, where the jobs created or retained pay 150 percent of the Greene County average wage.
According to
MissouriEconomy.org, the Greene County average wage in 2014 was $37,996 per year.
Sarah Kerner, the city’s interim director of economic development, said the preliminary funding agreements allow Kraft Foods to deposit money to cover the cost of preparing legal documents connected with the Chapter 100 development plan and bond issuance.
“The purpose of these agreements is to allow Kraft to give us money, which we will use in drafting some plans they would like us to consider. The city is not out any money. This is basically a pass-through for legal fees,” Kerner said. “This isn’t a vote on the Chapter 100 development bonds. We will bring those back to you for consideration in the future, and it also does not obligate Kraft to move forward with the project.”
She said $7,500 is designated to amend the industrial development plan council approved for Kraft
in 2012. Kraft paid the city $50,000 for work tied to the issuance of roughly $50 million in Chapter 100 bonds.
More recently, the company announced in 2014 it was investing $100 million in technology and equipment upgrades at its 780,000-square-foot Springfield plant with the help of City Utilities’ Community Economic Development Rider incentive program, offered to encourage local expansions. Granted to new or existing customers with a new electric load addition of 300 kilowatts per month or more, the rider provides discounts for five years: 25 percent in the first year, followed by 20 percent, 15 percent, 10 percent and 5 percent in the remaining years, according to
Springfield Business Journal archives.
Kraft Foods has operated in Springfield for over 60 years and employs roughly 900 workers.
Gomochak deferred additional questions about the possible project and other facilities in the running to Kraft Heinz public relations. Joyce Hodel, a company spokeswoman, did not return a request for information by deadline.
The bills introduced last night are scheduled to receive a second reading and vote at council’s Jan. 25 meeting.
