Unilever is staying in Independence, but it’s changing the local product line and taking on more workers.
To finance the planned renovation and expansion on 35th Street west of Noland, the City Council passed a resolution of intent at Monday’s adjourned meeting to issue up to $130 million in bonds that carry no liability or risk. The council still must hear readings for and pass an ordinance to issue the bonds, but several council members voiced strong approval of the project.
Unilever is moving its Wishbone salad dressing operation elsewhere, keeping its ice tea mix operation and bringing in production of soups, sauces, gravies and side dishes from Canada. It expects to keep the current 180 jobs and add another 70.
“As a kid growing up, it was so cool to be able to smell what was being made at the plant,” Council Member Chris Whiting said. “I look forward to smelling the gravies and sauces.
“Thank you so much, Unilever,” fellow member Karen DeLuccie said.
Mayor Eileen Weir, formerly the council representative of District 4 which includes the Unilever plant, said she was putting on her “District 4 hat” for a minute to express her gratitude.
“We’re looking forward to continuing to work with you,” she said.
“This could’ve been a doom-and-gloom situation,” Council Member Marcie Gragg said, referring to Unilever’s initial decision to move the salad dressing operation and possibility of a mothballed facility. “This is something that’s been going on behind the scenes, and it’s a huge situation.”
City Manager Robert Heacock said the big credit for this project goes to the Unilever staff and its strong local workforce.
“That’s what makes economic development possible,” he said.
Rene Ponce, factory manager at Unilever, said that when company executives met to review their options, “Independence came out on top.”
At the plant, Unilever plans to renovate 21,819 square feet, demolish 28,961 square feet and add to two multistory buildings, another 58,453 square feet. The expansion is slated to cost more than $19.3 million, with an additional $78.7 million invested in new equipment and technology, according to information provided at the meeting.
“This project assures Unilever will be here for another generation to come,” said Tom Lesnak, president of the Independence Economic Development Council.
Here is how the deal is set to work:
• The city is approving the issuance of up to $130 million in “Chapter 100” bonds. Unilever’s main investment in the project comes in the form of initially buying $98 million of those bonds, some this year, some next year and the rest in 2016.
A cost-benefit analysis report prepared for the city by Rick McConnell, a consultant from Gilmore & Bell, says “the municipality merely acts as a conduit for the financing.”
“There is no obligation whatsoever on behalf of the city,” Lesnak said.
In a year or so, the company could come back and buy the rest of the bonds, $32 million, for upgrading its instant tea mix operation. “They haven’t completed their analysis of what they’re going to do with the tea portion of the plant,” Lesnak said.
• The company will deed the plant over to the city and lease it back. Its lease payments will be in the form of the bond payments. At the end of the agreement in 2036, the company is obliged to buy back the plant and equipment, though it could choose to do so sooner.
• Although the plant, in city hands, would be tax-free, the company will make “payments in lieu of taxes” on today’s existing value of the plant, meaning the city, county, school district, library district and other local jurisdictions will not lose money. The company also will make those payments – at a lower level but rising over time – on the new equipment.
• The city is abating $14.9 million in personal property taxes, generally on the equipment in the plant. The company is bringing in a good deal of new equipment for the new lines of products.
• The company could get up to $5 million through the state’s EEZ program and up to $1.2 million through the Missouri Works Training program if it meetings investment and job-creation criteria.
• Independence Power & Light next month will offer a plan to reduce Unilever’s electric rate, Lesnak said.
The plant is one of just five industrial customers for IPL and its largest customer. In a one-year span in 2010 and 2011, according to city documents, Unilever used 20.27 million kilowatt-hours, far ahead of No. 2 Centerpoint Medical Center. For that one-year period, Unilever accounted for 1.8 percent of IPL’s sales, or $1.6 million.
Also Monday, the council authorized the contract with Imperial Construction for renovating the central police building. The ordinance had been scheduled for a vote at the May 19 meeting, but was postponed in order to obtain more information.
The contract with Imperial is for $932,773. The project consists of extensive remodeling on the first floor and a portion of the men’s locker room on the ground floor.