Sitting square in the center of the Midwest Farm
Belt, Kansas is an obvious site for food manufacturers, warehousers and distribution
companies to locate facilities. Companies that settled here over half a century ago
continue to thrive and expand -- companies such as Associated Wholesale Grocers,
which has been in Kansas City, Kan., since 1926.
Associated Wholesale Grocers is the third largest privately owned company in Kansas
City metro area. When it was time to expand the facilities of its co-op owned distribution
center, which serves member stores in nine states, the company looked at several
other locations, including sites across the state line in Kansas City, Mo.
"We turned over all the rocks," said Joe Poretta, executive director
of corporate services. "We talked to people in Kansas City, Mo., and Kansas
City Power and Light (Kansas City's local electricity provider), but Kansas City,
Kan., and the Kansas Board of Public Utilities (BPU) came up with the best economic
development package."
Associated Wholesale Grocers invested $20 million in the expansion, which added
285,000 square feet to its refrigerated warehouse -- bringing the facility's total
size to just under one million square feet.
"They now have the largest free-standing refrigerated warehouse in the area,"
said BPU's George Powell.
Also in Kansas City, Kan., Armour Swift Eckridge, manufacturers of processed meat
products such as bulk deli items, breakfast strips, smoked sausage and retail franks,
last year completed a 120,000 square foot expansion.
The company built on to their existing facility, and added machinery to the cost
of about $12 million. The expansion created about 100 new jobs. Armour Swift Eckridge,
which has 19 other plants across the country, works with local distributing companies
to ship their products.
And in Olathe, at the southwestern end of the Kansas City metro area, ALDI, Inc.,
a German-based wholesale and retail food products firm, is constructing a 425,000
square foot regional distribution headquarters on 168 acres. The $25 million facility
is expected to be operational by March 1998.
The company requested industrial revenue bonds for the expansion, which involves
retention of 102 jobs in the area and growth of 10 jobs per year. The facility will
be one of nine distribution facilities worldwide, and will service ALDI stores in
Kansas, Missouri, Arkansas, Iowa and Nebraska.
Friendly phone support
In western Kansas, a new industry is taking hold, as Sykes Enterprises Inc., a
computer technology support company headquartered in Tampa, Fla., opened a new computer
customer service facility in Hays.
Computer hardware and software manufacturers contract with Sykes to provide telephone
support to people needing assistance with technical products. Hiring began in the
summer of 1996, and by the end of this year, employment is expected to reach 400;
the hourly pay base for new employees is $7.
Sykes considered a couple of sites in Florida before deciding on the Hays location.
The $7 million project was secured when the city of Hays agreed to give the company
$2 million (about half was of which was contributed by private donors) for the deal
and to provide sufficient land in the airport industrial park to accommodate another
Sykes building should the company decide to expand there next year.
Another telephone-based business that chose Kansas for new facilities is Southern
Educational Council. This New Jersey-based telemarketing firm chose Kansas for two
new operations to handle telemarketing for profit and not-for-profit organizations.
The company brought 150 jobs to Parsons, in southeastern Kansas, and 200 to Pratt,
in south-central Kansas.
"We looked to locate in areas where other telemarketing firms were not,"
said Eric Greenberg, in-house counsel for Southern Educational Council. "We
looked at areas that needed the jobs and could provide state and local assistance."
The state was very helpful, Greenberg said, in providing reimbursement for training
expenses. The total cost for both new facilities totals about $1.5 million.
Driving desires
Kansas City, Kan., may be the new home of a high-speed super raceway. If negotiations
go well, International Speedway Corp. (ISC), a race track developer, will build a
new track that planners anticipate will attract NASCAR's Winston Cup races.
"Everyone hopes that this is the kind of thing, where if you build a quality
project, they will come," said Jim Thompson, executive director of Wyandotte
Development Inc., a county agency that is involved in recruiting the project.
The estimated $180-200 million facility will initially seat 75,000 spectators
and, depending on market conditions, will grow to accommodate 154,000. Besides hosting
the NASCAR race events, Thompson is confident the track -- whose "infield"
could house multiple football stadiums -- will prove useful for a variety of other
public purposes, including fairs and concerts.
KC-area headquarters
Other major expansions in the state include Allied Signal's announcement of the
construction of its $40 million world headquarters in Olathe. More than 1,500 employees
are already located in Olathe and in temporary facilities in nearby Lenexa; they
will move into the new 520,000 square foot facilities, which will contain office,
engineering and manufacturing functions, in 1998. As an existing Olathe business,
Allied Signal qualified for Olathe's existing industry tax abatement policy.
Diamant Boart, Inc. (DBI), the world's leading diamond tool manufacturer and part
of the global Diamant Boart Group, based in Brussels, Belgium, also chose Olathe
for its new headquarters. DBI officials hope to begin construction on their $10 million
facility this November.
The company employs approximately 200 people in engineering, marketing and sales,
customer service, manufacturing and assembly jobs. It expects to grow to 240 employees
over the next five years, and has allowed room for future facility expansions at
the site. Under Olathe's tax abatement policy, the development is eligible for a
50 percent abatement for 10 years.
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