Blair Packaging Inc. requesting tax abatement for Thorngate property

A packaging company is asking the city for a $369,398 property tax abatement over the next 10 years.

Blair Packaging Inc. of Scott City announced earlier this month it will open a paper box manufacturing facility this spring in the former Thorngate Ltd. building. The project is a $2.5 million investment promising 30 new jobs this year and more in the future.

At today's city council meeting a date will be set to hold a public hearing to consider a redevelopment plan for the property as part of Blair's request for a Chapter 353 tax abatement.

"The benefits of putting the building back into a productive use with the addition of the investment in the equipment will offset the loss of the revenues to the various taxing districts," said Mitch Robinson, executive director of the Cape Girardeau Area Magnet.

Because the project isn't receiving any state economic development incentives, it's even more important for the city to offer tax benefits, he said.

"We've got to have skin in the game," Robinson said. "This is a way for the city to step up and work with the company to get those 30 jobs this first year, and we think there will be more as they get going and move forward with their new facility."

Under Chapter 353 of the state constitution, cities may opt not to collect property taxes from a business locating in a blighted area for up to 25 years to encourage economic development, said Ken Eftink, assistant city manager and director of development services.

In its redevelopment plan for the Thorngate Property, Blair is asking for 100 percent abatement of real property taxes for 10 years on the site's existing buildings and any new facilities it may construct. It will, however, pay taxes on the land as well as equipment and other personal property, Robinson said.

"It's very important because it allows us to take the building and spend the money to bring it back up to a good operational building again. It was coming into general disrepair," said Ronn Unterreiner, president of Blair Packaging.

The tax abatement will free up resources Blair needs to make improvements to the buildings electrical, plumbing, and heating and air conditioning systems, he said.

"This allows us to get the operation started without having to bear the cost. It's a very valuable instrument for the state of Missouri to bring business in," Unterreiner said. "Without some incentive for people to buy older buildings, they'll go unused and people will just issue revenue bonds to build new ones."

The 10-acre site at 1507 Independence St. had an appraised value of $2.35 million in 2010, according to county records.

In 2010, $45,421.23 was paid in property taxes on the site, with the largest percentage, $31,232.64, distributed to Cape Girardeau Public Schools, tax records show.

Other recent projects the city approved Chapter 353 tax abatements for include the Marquette Plaza in 2002 and the NARS property in 2007.

Marquette Plaza was issued a 100 percent property tax abatement for 10 years and a 50 percent abatement for 15 years after that. The NARS property was granted a 50 percent abatement on the former Sears building for 25 years, a 100 percent abatement on improvements to the property for 10 years and 50 percent abatement on those improvements for 15 years after that.

mmiller@semissourian.com

388-3646

Pertinent address:

1507 Independence, Cape Girardeau, MO