Economic Incentives

We understand that risk and uncertainty are the biggest obstacles to any business venture. Time is money in a very real way in the development world. The primary objective of the City of South Hutchinson is to move as quickly and efficiently as possible to handle business needs. Businesses can pick up the phone and get an answer right away or at the latest receive a response within a day. Personal service and one point of contact can resolve issues on the spot, eliminating critical down time that costs businesses time and money.

Our Economic Development Focus

The City of South Hutchinson’s economic development efforts focus on three key areas.

Retain Existing Business

  • Many major employers call South Hutchinson home, including Morton Salt International, Collins Bus Corporation, Tyson Foods, Stutzman’s Refuse, American Packaging, and Mennonite Manor.
  • Maintaining and expanding existing businesses through cooperation and a positive business climate are a priority for South Hutchinson.

Recruit New Businesses

  • Attracting new and varied types of business ensures the continued growth of South Hutchinson and the region. Offering development incentives and prime development zones, South Hutchinson is an ideal location for a business.
  • In South Hutchinson, new businesses find friendly staff and regulations that make starting or moving a business as painless as possible.
  • South Hutchinson has made retail expansion a priority by teaming with Buxton, a national leader in community analytics and retail site selection.

Promote an Entrepreneurial Spirit

  • South Hutchinson was founded by entrepreneur Ben Blanchard in 1886 while drilling for oil. Instead of oil, Blanchard stumbled onto one of the biggest salt deposits in North America, touching off a period of intense growth and development. That spirit is alive and well today, as South Hutchinson is home to many successful small businesses that started as entrepreneurial endeavors.
  • Companies like Seed Research and Equipment Solutions, Machine Design Services, Clydesdale Frame Company, and many more have taken root and thrived in South Hutchinson. Maintaining and growing that entrepreneurial environment helps build a strong, diverse economy.

Our Economic Incentives

The City of South Hutchinson offers many incentive programs for businesses. Programs are often limited by state statutes that set eligibility requirements and caps on the incentives. The City of South Hutchinson will seek to maximize the benefit of each incentive program for the businesses within its legal ability.

Local incentives are governed by policy of the City Council and Reno County. Possible incentives include the following:

  • Industrial revenue bonds
  • Cash incentives for job creation and capital investment
  • Neighborhood revitalization program rebates
  • Special financing districts, including tax increment financing districts, transportation development districts, and community improvement districts
  • Tax abatements on industrial construction
  • Utility credit for new or existing businesses
  • Retail sales tax rebate program
  • Infrastructure assistance

Industrial Revenue Bonds

New or expanding businesses my be eligible for industrial revenue bonds (IRB). Industrial Revenue Bonds are used in Kansas to finance acquisition and construction of a broad variety of industrial, commercial and industrial properties under K.S.A. 12-1740 et seq on behalf of private businesses or non-profit agencies. IRBs are explained below in the document titled "Industrial Revenue Bonds Explained."

IRBs offer many economic benefits including the potential for a ten (10) year tax abatement and a sales tax exemption for the purchase of property and goods financed with IRBs. Exemption from tax on interest for the bonds also lowers the cost to borrowers.

Tax Abatements

The State of Kansas allows taxing entities to abate or exempt land and buildings from property taxes for up to ten (10) years. The City of South Hutchinson, in accordance with state guidelines, updated its tax abatement policy in August 2011. According to the Kansas Constitution, to qualify a business must manufacture articles of commerce, conduct research and development relative to the manufacture of products and/or store goods traded in interstate commerce. The City's policy business must seeking rebates must show economic gains for the community. Exemptions will follow this design:

  1. Base Exemption. A base exemption may be granted for up to twenty-five (25) percent of the affected property taxes with the expenditure of at least $100,000 of new capital investment and the creation of at least three (3) new jobs of full-time equivalency.
  2. Incentive Exemption. The city may consider increasing the amount of tax exemption up to one hundred (100) percent by giving special consideration to the amount of capital investment and the number of new employees, based upon the following:
    1. An additional tax exemption of up to five (5) percent may be given for each additional new full-time job above the minimum.
    2. An additional tax exemption of up to one and one half (1.5) percent may be given for each additional $15,000 of investment in taxable property above the minimum.

Retail Sales Tax Rebate

South Hutchinson offers a retail sales tax rebate program for businesses locating in South Hutchinson. The .25% local option sales tax levied for economic development and road improvement will be rebated back to business annually. Rebates are not capped and performance based. Rebates can be for a period of up to five (5) years based on the businesses annual payroll. Rebates are issues by the City after the completion of one full calendar year of business. To be eligible a business must meet the following criteria:
  • Business must be new to South Hutchinson and located in the city limits at the time of application
  • Application for incentive must be made before the business begins operation
  • An annual report must be filed with the City Clerk and must include satisfactory verification of the amount of sales tax generated in the last calendar year
  • Businesses that cease operations for thirty (30) days or more forfeit any earned rebate and all future eligibility
The City's policy on retail incentives can be read below.

Commercial Utility Credit

South Hutchinson offers a utility credit program for businesses locating or expanding in South Hutchinson. Recipients receive the minimum charge for water and sewer service credited to their monthly bill. Businesses are responsible for payment of usage charges beyond the credit amount. Amount of credits depends on businesses connection size. Credits can be for a period of up to five (5) years based on the businesses annual payroll. To be eligible a business must meet the following criteria:
  • Business must be new to South Hutchinson and located in the city limits at the time of application
  • Expanding existing businesses are also eligible provided they increase their annual payroll by $15,000; eligibility will be based on added payroll and not existing
  • An annual report must be filed with the City Clerk
  • Businesses must pay their utility bills on time, late payment for three (3) consecutive months result in forfeiture of any remaining credits
  • Businesses that cease operations for thirty (30) days or more forfeit any remaining credit and all future eligibility
The City's policy on commercial utility credits can be read below. Retail sales tax rebates and commercial utility credits length are determined by annual payroll amounts. Eligibility is determined at the time of issuance and re-evaluated annually.
 

Cash & Infrastructure Assistance

For industrial businesses locating in South Hutchinson, the City and Reno County can provide additional types of assistance. Direct cash incentives on a per job basis have been offered for companies that employ a minimum number of employees at a set wage level. Cash incentives are negotiated on a case-by-case basis. All city incentives must be approved by the City Council in an open meeting. Reno County involvement is governed by their incentive policy.

Industrial businesses are also eligible for infrastructure assistance. The City has adopted an "Infrastructure Assistance Policy" that outlines (see below) its position on the providing this incentive. Due to the varying size and needs of industrial projects, infrastructure assistance is negotiated on a case-by-case basis. All city incentives must be approved by the City Council in an open meeting.

Relevant Documents