Kraft Heinz tax break could still bring new tax revenue to Boone County
COLUMBIA, Mo. (KMIZ)
Food company Kraft Heinz is seeking a 75% property tax break on new equipment for its Columbia plant on Waco Road.
It is planning a $92 million expansion that would replace up to three manufacturing lines and "decarbonize" the facility.
Boone County Presiding Commissioner Kip Kendrick -- who signed a letter in support of this plan in January -- said Kraft Heinz would be responsible for purchasing the new equipment, but then it would pay 25% personal property tax instead of 100%.
"It is new tax revenue generated as a result of it, it's just a lesser amount that they'll be paying," Kendrick said.
A presentation by the Columbia Regional Economic Development Inc. shows despite the tax break, this would still bring in around $1.25 million in new tax revenue, including $1.06 million for Columbia Public Schools.
Other local taxing jurisdictions this would impact include the City of Columbia, Columbia Boone County Library, Boone County General Revenue, Boone County Family Resources, Boone County Common Road and the State of Missouri.
Kraft Heinz and REDI are now meeting with those jurisdictions to present the plan.
With this project, Kraft Heinz would be upgrading the facility to work toward its goals of making its packaging more sustainable and reducing greenhouse gas emissions, according to a presentation from the company.
A Kraft Heinz Spokesperson told ABC 17 News, “At Kraft Heinz, we aim to make all our packaging globally recyclable, reusable, or compostable by 2025. While most of our packaging is paper-based, glass, or metal materials that are recyclable, a portion is made up of rigid plastic containers or flexible plastic films. To meet our goal, we need to convert this remaining portion of our portfolio to more sustainable options, including evaluating new materials for Oscar Mayer Hot Dogs packaging. As part of our routine financial planning process, we’re exploring potential incentives to help offset the cost of the large investment needed to upgrade our Columbia, MO plant to more sustainable packaging materials for Oscar Mayer. As is standard in this process, we’re meeting with local taxing jurisdictions for further discussions and consideration.”
The plan would take five years to complete, starting construction at the end of this year and being fully operational by 2029.
Matt Williams, REDI Incentive subcommittee member, said Kraft Heinz is evaluating other options for its sustainability project, which include working with a co-packer at a different location.
"Really, for us, our involvement is about making sure that this investment stays in our community and these jobs stay in our community," Williams said.
Kraft Heinz previously got a 75% property tax abatement in 2015 for a similar plant expansion.
Kraft Heinz currently has 447 full-time employees at its Columbia location. In a presentation from the company, it said "further investment would strengthen long-term retention" at the facility. If not, there could be a potential loss of almost 450 jobs.
Kendrick said these jobs and the increase in tax revenue are both reasons the Commission supports the tax break.
"It appears to be a long-term investment and hopefully that would mean the long-term investment of Kraft Heinz remaining here in Boone County and Columbia, and those jobs remaining with it," Kendrick said.
Kendrick said he expects the tax break to come up for a vote by the Commission at the end of May or early June.
Local taxing jurisdictions told ABC 17 News on Wednesday they cannot comment on the tax-break plan until after they are presented with all of the information.
Kraft Heinz is also receiving state and federal funds for its project. The presentation shows Kraft Heinz received an offer form the state in January with almost $1.3 million of tax credits and $520,000 in reimbursement costs.
The U.S. Department of Energy is offering up to $170.9 million in grant funds, with around $9 million going to the Columbia plant.
