City backs Gerber expansion
Fort Smith board approves intent to issue revenue bonds
FORT SMITH — The city Board of Directors last week threw its full weight behind an industrial facility expansion that reportedly will lead to the creation of new jobs and further security of existing jobs.
The board on Tuesday unanimously approved an inducement resolution, or a statement of intent to issue industrial development revenue bonds. This would assist the Virginia-based Gerber Products Co. in the financing of an expansion of the product line at its Fort Smith facility.
“The company proposes that the expansion will house food processing and manufacturing equipment, associated machinery and infrastructure improvements at the site requiring expenditures estimated not to exceed $30 million,” Deputy City Administrator Jeff Dingman wrote in a memo. “In addition to the significant product line expansion and the retention of 480 current employees, the company will be adding 25 new jobs with an approximate average wage of $21 per hour.”
The reduction of property taxes paid by the company, Dingman said, is the principal advantage of industrial revenue bonds. When the process is completed, the company and the city will enter into a Payment in Lieu of Taxes agreement, through which the former will pay an amount equaling 35% of the normal property taxes for a 15-year period. Based on this period, the value of the incentive is estimated to be about $1,900,471.
The board will be required to approve an ordinance when the bond issuance is ready to proceed, according to Dingman. Gerber will be solely responsible for the debt service payments on the bonds, with the city having no obligation to make bond payments.
“The Fort Smith Regional Chamber of Commerce, as the city’s economic development representative, was instrumental in securing this additional investment by one of Fort Smith’s significant employers,” Dingman wrote. “This action and the resulting investment by Gerber Products Company will support one of the board’s top goals: economic development and job retention/creation.”
In addition to thanking the city administration and Tim Allen, president and chief executive officer of the Chamber of Commerce, City Director Kevin Settle thanked Gerber for investing in Fort Smith and its residents.
“Words can’t express how gratifying it is to see companies continue to invest in Fort Smith,” Settle said.
City Director Robyn Dawson said these types of investments do not happen without a considerable amount of work. She said the expansion project will ensure the jobs for Gerber that would not have been as secure in the future.
“Again, that did not happen just by a draw of a hat,” Dawson said. “The chamber president, Mr. Allen, had to work very hard to convince the headquarters that Fort Smith was the place that they needed to relocate. We were in competition, again, with other states, and so … just know that your chamber is working very hard in conjunction with the city to make sure that we are progressing and we are protecting the people that live here.”