BG Products, Inc.Industrial Revenue

Bond Letter of Intent Request

Office of Economic Development

September 12, 2017

BG Products

• BG Products formed 1971

• Manufacturer of lubrication and cleaning products for the

automotive industry

• Purchased former Sunflower Oil and Grease facility located at

701 & 740 S. Wichita in 1980s

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701 & 740 S. Wichita

BG Products

• Invested heavily in research and development of new product

lines; refined existing lines as engines have become more

sophisticated

• Automotive products and services for fuel systems, engines,

transmissions, brakes, power steering, climate control systems

• Provides training to service advisors and technicians

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BG Products

• Current auto lab and R&D lab are old and inefficient

• During training session, auto lab shut down; R&D lab too small

to grow

• Classroom for training limits class size

• Intend to demolish two structures and replace with new 34,000

sf addition

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BG Products

• New, larger classroom

• Larger auto lab; dedicated demonstration room

• Offices for engineers; increased R&D lab space

• Larger breakroom space for training sessions

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Jobs Base New5 Year

Projected

Avg

SalaryCapital

2017 174 11 185 $70,200 $11,500,000

• 83% property tax abatement

• 5-plus 5 year basis

BG Products

• Value of one year 83% tax abatement ($10,500,000 at 80%)

• City $56,865 State $ 2,614

• County $51,232 USD 259 $93,569

TOTAL = $204,280

*In 2016, BG Products paid in excess of $72,000 property tax

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CEDBR Benefit/Cost Analysis: $12,000,000

Projected

City of Wichita 1.67 to 1

City of Wichita – Gen Fund 1.30 to 1

City of Wichita – Debt Srv Fund 1.53 to 1

Sedgwick County 1.31 to 1

USD 259 1.81 to 1

State of Kansas 3.70 to 1

BG Products

Recommendation:

It is recommended that the City Council close the public hearing, adopt the Resolution of Intent and authorize the necessary signatures.

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Office of Economic Development

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BG Products, Inc.Industrial Revenue Bond Letter of Intent Request