Janesville City Council approves agreement with plastics manufacturer
JANESVILLE — A Janesville manufacturer that plans to build a new plant on the city's north side hopes to add positions, but job creation will not be part of its deal with the city.
The city council on Monday approved a package for GOEX that includes public contributions of more than $1.5 million. After a state transportation grant is applied, the city's cost drops to $891,000.
As part of the agreement, GOEX will be required to retain 130 full-time jobs for the seven years remaining in the life of Tax Increment Financing District 21.
GOEX is an industry leader in extruding a variety of resins into custom rigid plastic sheet and roll stock. It has posted double-digit growth in each of the last 10 years but is landlocked at its facility on Foster Drive.
It plans to build a 161,000-square-foot plant on the south side of Highway 14 at Newville Road with a taxable assessed value of $5.5 million. Equipment costs are expected to push the investment considerably higher.
The council last month approved an application for a $650,000 state grant to help offset transportation infrastructure costs at the site.
At the time, the council based its decision on information provided by Vic Grassman, the city's economic development director who resigned less than a week later for what City Manager Eric Levitt said were personal reasons.
Grassman's memo to the council indicated that GOEX planned to retain 128 jobs and create 63 new ones.
So what happened between the council's meetings March 11 and Monday to change the language on job creation?
Nothing really, said Assistant City Manager Jay Winzenz.
According to the rules of the state grant program, cities can seek a maximum of $5,000 per job retained or created. The company's employment of 130 translates into the $650,000 grant application, he said.
“There was never a guarantee that GOEX was going to create a specific number of jobs,” Winzenz said. “I do believe, however, that GOEX will create additional jobs in the future.”
Winzenz said GOEX has indicated it will add jobs in the future, and while a specific number was included in Grassman's March memo, it was the result of conversation between company officials and the city and not a component of a TIF agreement.
GOEX President Josh Gray said Monday the company plans to grow and add jobs.
“On average, we add about 10 percent to our head count every year,” he said.
The move to a new plant would more than double the company's space. It also would make the GOEX facility on Foster Drive available to Prent Corp. next door.
Prent is the parent company of GOEX and a growing global leader in custom thermoform packaging with facilities around the world.
Construction is expected to start this summer. The building will be situated on the lot to maximize space for future expansion, if needed.
The new site will give GOEX the advantage of rail service, an important consideration because GOEX buys in commodity markets that often are driven by pennies.
As part of the TIF agreement approved Monday, the city will:
-- Extend sanitary sewer service to the property at an estimated cost of $78,880.
-- Design and install traffic signals at the intersection of Newville Road and Highway 14 at an estimated cost of $230,000.
-- Construct a frontage road at an estimated cost of $249,000.
-- Design and construct a rail spur at an estimated cost of $710,000.
-- Pay the land division costs for a five-acre property acquired from the county. GOEX has an option to buy the land from the county at $46,000 per acre. The city's estimated cost for land division is $44,013.
-- Apply for the state Transportation Economic Assistance grant.
-- Incur about $118,000 in interfund borrowing and debt service costs.
-- Buy the five acres from the county and combine it with the 24 acres it already owns.
-- Build and occupy the new facility by the end of 2014.
-- Guarantee annual property tax payments of one-sixth the TIF break-even amount or $143,776, whichever is less.
-- Create and retain a minimum of 130 full-time positions within a year of occupancy and maintain it for seven years.