Niagara Bottling: Gahanna is 'best fit' for its plant
Gahanna City Council is considering legislation that would bring California-based Niagara Bottling to the city, along with 73 jobs and more than $2.9 million in annual payroll.
Gahanna development director Anthony Jones said the city administration has been working with Niagara since May to bring the company's midwest manufacturing and distribution operation to Gahanna.
Niagara is headquartered in Ontario, California, and has 11 locations throughout the United States.
Jones said the largest family-owned and -operated bottled-water company in the United States likely would be in operation in Gahanna by Feb. 1, 2013.
Brian Hess, Niagara executive vice president, described Niagara as a wholesaler of private-label products, including Costco. The company's bottles have waves in the plastic.
Niagara is proposing to purchase a 308,000-square-foot building at 1600 Eastgate Parkway to establish a two-line production facility to bottle and distribute water.
The building is within Gahanna''s Eastgate Industrial Park and has been vacant for nearly five years.
Niagara would invest $44.7 million to $49.2 million in the property purchase, facility improvements, machinery and equipment, specialty tooling, and telecommunications equipment.
In an effort to secure Niagara's commitment to Gahanna, Jones said, the city administration has offered a five-year, 50-percent office and industrial incentive. Based on an annual payroll of $2.9 million, it would provide an estimated payment to Niagara of $22,409 per year for five years, totaling $112,043 over the incentive term.
Jones said the Eastgate Parkway property currently generates about $92,000 in payment in lieu of taxes annually for the Eastgate tax-increment-financing fund (TIF).
He said the proposed renovations of the building would have a positive financial impact on the Eastgate TIF fund, but the exact amount of this increase remains unknown.
Gahanna would receive at least $92,000 annually, which totals at least $920,000 over the first 10-year period.
City service director Dottie Franey said Niagara's use of approximately 90 million gallons of water per quarter would make the company the largest water user in the city.
The city is asking council to establish a step rate for municipal water that waives the operational and capital surcharge on every gallon purchased above 9 million per user per quarter.
"A user of that size can receive a reduced rate after purchasing that volume of water and still be a great benefit to the water fund," Franey said. "The healthier the water funds (both Columbus' and Gahanna's), the more stable the water rates can be for all Gahanna customers."
While investigating a potential Gahanna site, Niagara Bottling requested an estimate of its anticipated capacity fees.
Based upon the configuration that the city believes the company would use, Niagara would owe at least $95,550 for water and $255,717 for sewer for a total of $351,267 (Gahanna would owe $101,475 of these fees as a pass-through to Columbus), Franey said.
Because of Niagara's anticipated high-volume usage, she is asking that half of the actual water/sewer capacity fees, or $175,633.50, be waived.
"While it has not historically been our practice to waive these fees, we feel that it would be an appropriate incentive for this potential business simply based upon their volume of water use," Franey said. "The annual volume of water that Niagara anticipates purchasing equates to revenues of approximately 4.5 percent of total water revenues collected in 2011."
She said that revenue on a regular basis would be helpful to stabilize the water fund for all Gahanna customers while amply supporting infrastructure installation and maintenance.
Jones said the prospect of Niagara coming to Gahanna is one of the most exciting projects in some time, and it boasts a $50 million investment.
"For them to consider us, it's a good day," he said.
Hess said Gahanna was by far the best fit of about 30 sites across three states.
After an initial meeting with Jones, Mayor Becky Stinchcomb, city directors and two city council members, Hess said, he and other Niagara officials walked out saying, "That's how economic development should be done."
"You hit a grand slam, in terms of the effort," he said. "We feel the fit is Gahanna and we can't be more thrilled to be here. Thanks for the welcome you've shown."
Niagara was established in 1963. Its products are packaged under the company's brand or private labels. The company provides four types of bottled water products: purified drinking water, purified drinking water with minerals, spring water and distilled water.