Creekstone Farms is planning a $35 million expansion at its Arkansas City plant.

The project is mentioned in an agenda item coming before the Arkansas City commissioners on Tuesday.

They are being asked to support a possible property tax exemption for the expansion. City Manager Nick Hernandez said Friday that he did not know how much the tax exemption would be until a cost-benefit analysis was done.

Hernandez also said he did not have details on the project but said Creekstone representative Tom Minton would present an overview of the plan, which calls for a $35 million cold-storage facility used for warehousing, according to city documents.

If it receives the tax abatement, Creekstone Farms has indicated that it would pay the city $30,000 per year for 10-years to help fund planned improvements to Wilson Park, according to the documents. 

Doug Mackay, Creekstone’s general counsel, said on Friday that he could not discuss the project yet but that a press release would be issued.

The beef slaughterhouse and packing plant received a property tax abatement in 2015 for expansion that was done after portions of its facility were destroyed by fire in 2013.

The expansion was about 71,000 square feet and included a new refrigerated fabrication floor area, packaging, combo cooler and refrigerated truck docks, according to a cost-benefit analysis. The company also replaced areas of the existing building damaged by the fire. 

The total investment was about $29 million, according to the analysis, which also estimated the city would forgo about $4.6 million in property taxes over 10 years but could bring in an additional $7 million in sales, property taxes and utility revenues.

Right of way

Commissioners will also consider a resolution to issue a grant of right of way and waterline relocation agreement with Kansas Gas and Electric, a subsidiary of Westar Energy, Inc.

Westar plans to make significant improvements within Ark City, which will include the installation of new electric and communication transmission and distribution lines.

In order to complete that construction, a waterline on the north boundary of the Kan-Pak property will need to be relocated. Westar proposes to pay the city $650,000 to cover that cost.

In exchange for the right of way through city owned property, Westar has also proposed a payment to the city in the amount of $537,395, which will be used to expand and improve the city’s hike-bike trail.

The city will also consider a resolution to approve a contract with Smith and Oakes, Inc. of Arkansas City, for engineering design, construction services and inspection services for the project for an amount not to exceed $120,800.

The commission will meet at 5:30 p.m. at 118 W. Central Ave.

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