The Jefferson City Council will vote Monday night on a tax break and expansion plan for a local book manufacturer.
A set of Chapter 100 property tax abatements would abate 50 percent of the property tax on equipment installed in a two-phase, $34.25 million project at Command Web Offset Printing at 7100 One Color Way over the next seven years.
Chris Huckleberry, Command Web general manager, and Shaun Sappenfield, Jefferson City Area Chamber of Commerce existing business manager, said the deal will help keep the company in the area for the long run and create more than two dozen high-paying jobs.
Command Web began its expansion in January when it installed two new binders in its bindery. The company employs about 200 people and makes 200 million paperback books per year. The company is in the midst of replacing a 24-year-old press original to the factory with two new presses that will print one-color paperback books, Huckleberry said.
"We put in two of the most advanced binders for paperback books, and now we're putting in two of the most advanced presses for the types of books that we produce to support that," Huckleberry said.
Under the proposed agreement with the city, Command Web will create a minimum of 25 new full-time jobs with an average wage of $35,000 by Oct. 31, 2019.
The project will happen in two phases. In phase one, Command Web will install $26.4 million worth of equipment, according to the proposed agreement with the city. The two presses will be installed during this phase, Huckleberry said.
The presses are being built now in New Hampshire. By July 1, both presses should be installed and operational, he said.
Phase two could add the capability for hardcover books to be made by existing production lines at the company's factory, Huckleberry said. If phase two happens, the company will spend an additional $7.7 million, according to the proposed agreement with the city.
"Multiple customers have to make a commitment that they will use what we want to build," he said of the state of phase two.
Sappenfield began helping Command Web through the process of getting the abatement about two years ago. Chapter 100 Industrial Revenue Bonds allow cities to abate real estate and personal property on industrial development projects, Sappenfield said.
During the seven-year abatement, the city will technically own the presses, he said. Municipal entities do not pay taxes, so the city will lease the presses back to the company.
Instead of paying property taxes, Command Web will pay the city 50 percent of the value of the property taxes it would have paid without the abatement.
Often the chamber and city use Chapter 100 abatements to attract new businesses. In 2017, Axium Plastics received a 75 percent personal property tax abatement and 75 percent real property tax abatement on real estate for 15 years.
Usually when the city and chamber attract businesses to the area, they put Chapter 100 abatements on the table, Sappenfield said.
Plastics manufacturers ALPLA and Continental Commercial Products, commercial printer Modern Litho and bath products bottler Unilever all have active Chapter 100 abatements, according to Jefferson City Public Schools financial records.
Command Web also received a 100 percent Chapter 100 abatement for a previous expansion around 2008, Huckleberry and Sappenfield said.
Command Web's two new presses will last at least two decades, Huckleberry said. Over that time, Sappenfield said, they will generate far more tax revenue than the city will forgo in their first seven years in operation.
"We've done our best to see what that break-even point is," Sappenfield said. "Yes, you're giving up personal property tax, but over time, it will more than offset (property tax that is given up)."