Shawnee & Lenexa

Shawnee lures restaurant supply company with job-creation loan

A Denver-based company supplying hamburger buns, among other things, to area restaurants will soon be opening a Shawnee office, thanks in part to an unusual incentive program that pays companies to locate in Shawnee based on the number and quality of jobs they create.

Mile Hi Specialty Foods became the fourth company to receive funds under the Shawnee Entrepreneurial and Economic Development Program. The city council gave its approval for a loan that will be partially forgiven as job creation targets are met.

Unlike more typical plans that cities use to lure businesses to town — special taxing districts or abatement plans, for example — the program is a one-time loan, a part of which is forgivable if the business meets certain criteria. Part of the loan forgiven is based on the payroll, and additional money may be forgiven if the business does other things such as hire a quarter of its new employees from Shawnee, use Shawnee-based contractors or vendors or make a substantial contribution to a Shawnee-based charity.

The loans are typically small, as financial incentives go. Mile Hi will get $30,500 for creating 29 jobs over three years. The company pledges to invest $6 million by locating at the WestLink Business Center, 23100 W. 43rd St. It will become the first occupant of the new 1.1 million-square-foot business center located near 43rd Street and Kansas 7.

The program is relatively new. It was created in 2012 and none of the other loans has reached the one-year anniversary review, said Andrew Nave, executive director of the city’s Economic Development Council. Funds come from the impact fee charged to Deffenbaugh Industries for the landfill.

The city has awarded around $188,000 since starting the program, Nave said, with an expected 200 jobs created.

Although small, the program does help keep the city in play when companies are looking to relocate, he said. “I would never say it is the sole reason for the decision (to relocate),” Nave said. “But yes, I do think it’s something that helps. It helps us keep our buildings in the mix.”

Many communities in the Kansas City area have incentive programs, but Shawnee’s is unique in that it uses payroll as a criteria for the loan, he said. Rather than reward the creation of lots of low-paying jobs, the loan encourages better pay. To qualify for the incentive, a company must project that at least 10 new full-time jobs will be created with a combined average salary that exceeds the minimum average salary in Johnson County.

“The wealth they bring into the community is the important thing,” Nave said.

Mile Hi services over 1,000 restaurants in 17 states, including Starbucks, Chipotle and Quiznos. The Shawnee office will be the first in the metro area. The 29 jobs the company expects to create will have an average salary of $52,593. In addition, the company intends to donate at least $2,500 a year to Sunflower House and $2,500 a year plus food and other goods to Shawnee Community Services. And the company will use a local uniform vendor for their employees, city officials said.

The city council approved the loan without much debate. Councilman Mike Kemmling said he is skeptical of the program in general because “the way they word the contracts they really have no teeth in them.”

In other action, the council approved final plans for development of Erfurt Park, a 20-acre area on the south side of 71st Street west of Gleason Road.

The city bought land for the park in 1999 and 2007, but only recently went ahead with plans for developing it.

The park is named after Shawnee’s sister city in Germany. Features to be included: trails, sports fields, a traditional playground, shelter and restroom and perennial garden.

The city will build the park in three phases, with construction to begin in April. Phase one will cost about $1.9 million, with funds coming from the “Parks and Pipes” special sales tax.