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City changes TIF agreement after P&G exits Duke space
by Rick DeClue · News · May 18, 2017
Procter and Gamble’s Hair Care, LLC ceased operations in what is known as the Duke building due to lack of need for the space at this time.
Building 3, or “R3W,” completed in 2007 for $15.3 million, offers 515,000 square feet of space and is now available for lease.
Built by Duke Realty Corp., the facility at 160 Fawcett Drive includes 50,000 square feet of refrigerated space and is the building of the P&G campus closest to Baker Avenue.
The assessed value of the property is about $18.86 million, with $1.8 million of that coming from the 105 acres of land, according to information from the city.
P&G had a 10-year lease on the building with an option to buy.
As a result of emptying the building, City Attorney Kevin Olson told the West Branch City Council at its May 1 meeting that both sides have reached an agreement to modify terms of the Tax Increment Financing Agreement signed April 17, 2007. The economic development deal was originally signed by then-Mayor Sandy Hatfild.
Last Monday, the council approved the changes unanimously.
Under the terms of the original agreement, P&G was required to create a minimum of 50 jobs to operate the facility within five years of the opening the plant. City officials could not cite peak job figures or how many jobs were eliminated with the shutdown of the operations. Nor could they estimate how many jobs may have been transferred to other P&G activities at the plant.
The company is the largest private employer in the city.
City Finance Director Gordon Edgar said the operations have been shut down at least since he joined the city staff in late 2015.
Olson told the council the city will ultimately pay less in the future as a result of the amended 10-year agreement. As in the current process, payments are determined based on the building’s assessed value. The city will continue to abate P&G’s taxes based on its annual review. The abatement will continue until 10 years of abatement are completed, as soon as next year. The 10th year of the agreement calls for an abatement of 25 percent of the annual property taxes, down from an original 95 percent in the first year.
The last year the abatement was paid out amounted to $212,000 for the company.
The city’s recently settled TIF agreement with Acciona Windpower was also affected by that company’s request for a re-reassessment, though it ultimately did not affect that situation’s cost to the city.
Olson said the key to this discussion was the open communication between the two parties. This has been a hallmark of P&G’s relationship with the city since first considering locating in West Branch, he said.
P&G now contains its activities to about 800,000 square feet in existing facilities in the West Branch industrial park.
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