On Tuesday, October 6, the City Commission voted to approve an Economic Development Agreement with Bev-Hub. The company currently produces and packages beverages (water, cold brew, juices, and teas) for national and international clients. Recently, Bev-Hub purchased the former Tallgrass Brewing Company building in the City’s Business Park near the Airport and they’ve begun renovations to the existing floor to handle their anticipated equipment and expansion.
The economic development package for Bev-Hub includes a job incentives grant for $240,500 for the anticipated 37 full-time jobs they’ll bring to Manhattan. Payment will be disbursed upon successful hiring and employment for one year. Additionally, Bev-Hub will be eligible to apply for a 10-year tax abatement and sales tax exemption with the issuance of Industrial Revenue Bonds (IRBs) on their proposed roughly $900,000 expansion. It is estimated the tax abatement annually will be around $35,000 - $40,000.
IRBs are a financing tool that allows local governments to issue bonds on behalf of a private business for a specific project and the private business then receives the proceeds. When granting IRBs, the Commission must determine the project will promote, stimulate, and develop the general economic welfare and prosperity of the city, and thereby further promote, stimulate, and develop the general economic welfare and prosperity of the State of Kansas. Included in their IRBs, property taxes are exempt only on the expansion for a 10-year period as allowed for by State Statute. Bev-Hub will continue to pay taxes on the existing $2.4 million building and plans to invest over $20 million in the facility with equipment, reconditioning and expanding the facility.
The regional Cost/Benefit Analysis for this project is favorable. Based on the City’s economic development return on investment model, the total benefits of the project to the City are estimated at $597,748.88, or net benefits of $250,843.00. The net benefits to the other taxing jurisdictions are also positive: Riley County ($257,991.89), USD 383 ($312,925.91), and State of Kansas ($2,889,508.50).
Renovations are currently in progress and Bev-Hub expects to begin production by spring 2021