City OKs bonds for Coleman, Cessna

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Dec. 9--Wichita City Council members voted Tuesday to give the Coleman Co. $5.3 million in industrial revenue bonds even though the company has not added the new jobs it projected years ago when the city agreed to millions in tax breaks.

The bonds, which would be finalized in a vote next week, would help finance a phased expansion of plants in Wichita and Maize to produce more jumbo-size coolers. Coleman would pay the money back, and the property would be tax exempt for up to 10 years.

The council also approved a $45 million industrial revenue bond for Cessna to finance routine plant upgrades. That company has cut its work force.

The moves come as council members face questions about whether to continue public assistance for private projects that aren't generating new jobs.

Tax incentives typically hinge on a company's promise to add more jobs to the local economy or to entice a company to move to the city or stay in it.

Coleman hasn't added projected jobs. Instead, in October it announced it would lay off an unspecified number of people in its Wichita plant while it shifts some work to a warehouse in the Kansas City area.

In 2006, the City Council changed its policies to allow big companies to receive industrial revenue bonds even if the companies didn't add jobs.

But the economic downturn has led many such companies to not only not add workers -- but lay some off.

Council members have generally indicated they want to help companies make it through the downturn by helping finance expansions, even if they don't immediately add jobs.

That's the case with Cessna. Once the city's biggest employer, with about 12,000 employees, it now employs about half that, according to Allen Bell, the city's director of urban development.

Vice Mayor Jim Skelton pointed out that the city's analysis of the Cessna request incorrectly noted "Cessna has recently announced the addition of a large-body business jet, the Citation Columbus, to be produced in Wichita."

Bell acknowledged that Cessna has canceled that project because of the nation's economic problems.

But he said he thinks Cessna will bounce back.

"We believe and Cessna also believes that it will come back," he said. "We need to hang in with them."

Reach Brent D. Wistrom at 316-268-6228 or bwistrom@wichitaeagle.com.

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