8 minute read
Contracts for Expansion
Topeka has a wide range of positives that make it an appealing location for growing businesses. It’s centrally located, land is affordable and employers can hire from a pool of talent with the famed Midwest work ethic. Yet when new and existing companies eye Shawnee County as a potential site for expansion, sometimes an added incentive helps them say, “Go.”
International brands like Mars Wrigley and Walmart have chosen Topeka as a base for new facilities in recent years, in addition to longtime area businesses primed for expansion, like Polo Custom Products. These are just a few on a long list of companies that have received funding from the Joint Economic Development Organization (JEDO), which contracts with GO Topeka to promote economic development through a countywide half-cent sales tax.
Financial incentives have helped attract businesses, which in turn, provide opportunities for jobs and continued growth for the city and state. Plots of land that once sat empty on the outskirts of town are now home to facilities for some of the world’s biggest names. }
Walmart's 1.3 million-square-foot distribution center near 77th Street and US Highway 75, recently celebrated its one-year anniversary.
BIG BUSINESS WALMART
A company the size of Walmart carries a lot of clout when it comes to business deals. In 2022, the Arkansas-based retail giant ranked No. 1 on the Fortune 500 list for the 10th year in a row. Already with three other facilities based in Kansas, none were larger—or more valuable— than the distribution center announced in Topeka in 2019.
The 1.3 million-squarefoot structure, which celebrated its one-year anniversary in July, can receive up to $1.87 million in cash incentives from JEDO and opened with the goal of creating 300 full-time jobs within a five-year period. Ryan McMichael, senior director of ecommerce fulfillment for Walmart, said that benchmark has already been surpassed.
“We’re very pleased to have met and exceeded our goals,” he said. “I’m excited about the future, not just for this building, but for the supply chain business as a whole. The upcoming season should also present some opportunities to continue to increase the head count at this facility by potentially a
couple hundred.” }
The impact of those jobs extends beyond
Photo by JOHN BURNS
the building’s vast walls. Most of the company’s hires are Kansans, which means much of the money and goodwill generated by Walmart’s newly created careers goes back into local communities. Others, like McMichael, came from out of state but are enjoying the experience after crossing the border.
“It’s been a great opportunity for the past year and a half to get involved in the Topeka area,” said McMichael, a Missouri native who now lives in Kansas. “It’s Walmart’s goal to have a positive impact in the region and spaces we operate in. As for myself, I’m involved in different organizations that support people who are less fortunate or may like the opportunity to get involved in an organization like Walmart to pursue employment and development in a building like this.”
For Topeka, landing a company like Walmart is a big win, but Molly Howey, in her fifth year as GO Topeka president, said the collaboration doesn’t stop once a company signs on the dotted line.
“I think it makes a ton of sense for them to be here,” Howey said of Walmart. “They're brand new as far as a corporate citizen goes. So, we're building a relationship and figuring out how to best serve their wishes for community involvement.”
Maintaining an ongoing partnership helps cement the county’s reputation as a viable destination for others as well.
“When we talk to companies and site location consultants, and begin to name off the companies and the brands that we have here, it doesn't take long,” Howey said. “We're a third of the way down the list of our major companies and they're like, ‘Okay, we get it. This is a great place to do business.’” }
Since the opening of the Mars plant in 2014, it has invested over $750 million into the community and anticipates expansion of production lines and 600 associates by the end of 2023.
A SWEET DEAL MARS
For Walmart, the largest company by revenue on Earth, to confirm a multimillion-dollar venture in Kansas, it only needed to look one "planet" over. Mars built a plant in Topeka in 2014, its first U.S. facility in 35 years, and has exceeded expectations ever since. Originally expected to create 200 jobs when it first opened, Mars announced in April 2022 an additional investment of $175 million into its chocolate manufacturing facility. The expansion included new equipment, additional production of candy lines and created another 100 jobs. “We currently have well over 500 jobs here at the Topeka factory,” said site director Brian Pardo, who’s worked for Mars for 14 years, } 52 November/December 2022 TK Business Magazine
Photo by JOHN BURNS
—Brian Pardo Factory Director Mars Wrigley
including the past two in Topeka. “We are in the process of hiring more associates to meet our current expansion plans. We anticipate that we’ll have 600 jobs by the end of 2023.”
In total since 2014, Mars has invested over $750 million into the community. Snickers production has expanded, Milky Way and 3 Musketeers were added in 2022, and Pardo said more varieties of M&M’s will be added by the end of 2023.
“Mars has grown at a much faster rate than they or we thought,” Howey said, “and I think that's proof that their decision was a good one. It was a great fit for them to be in Topeka. Expanding their lines that they are producing here in Topeka helps position them for more growth in the future.”
Mars and Walmart both built in the Kanza Fire Business Park, fittingly located at the corner of Topeka Boulevard and SW Innovation Parkway. While the smell of chocolate wafting through the air is a nice plus, it’s not the reason that Walmart chose its space. GO Topeka has the ability to grant companies free land on plots the organization owns, including Kanza Fire Business Park and Central Crossing Commerce Park, which is farther north on Topeka Boulevard, and home to Frito-Lay, and Target and Home Depot distribution centers.
“Some companies find locations that are more suited for their unique needs elsewhere in the county,” Howey said. “We make it very clear that whether they choose a site that we own or not, we would offset the cost of their land purchases at the same value as ours in order to not compete with other developers and landowners.” }
Kent Lammers joined Polo Custom Products as a Washburn University student 38 years ago and advanced his career to President/CEO.
DRIVEN TOWARD 75 POLO CUSTOM PRODUCTS
While Topeka’s accommodations may have initially been a surprise for companies like Mars and Walmart, others have known what was here all along. Polo Custom Products, which is celebrating its 75th year in 2022, already had its corporate offices in Topeka before opening a new fulfillment warehouse in August 2021. The expansion is expected to result in an economic impact of $61 million over a 10-year period.
Kent Lammers, Polo’s president and CEO, has lived in Topeka since he was less than a year old, and did not need to be sold on expansion in the city he grew up and works in. However, GO Topeka’s incentives could not have come at a better time.
Polo, a contract manufacturer that designs and engineers custom products for the medical, fire and safety, industrial, and government and defense markets, had factories in Iowa and Minnesota before adding a third in Topeka. Lammers anticipated the company’s year-over-year growth to continue until COVID-19 hit their finances hard.
Polo Custom Products' corporate headquarters, based in Topeka, fueled its growth with the expansion of a local fulfillment facility in 2021.
—Kent Lammers President/CEO Polo Custom Products
The company was deemed essential and avoided layoffs, wage decreases and reduced hours, which Lammers says was the top priority, but sales in 2020 were less than half of what he projected.
Thanks to the expansion in Topeka, Polo rebounded quickly, with a 32 percent growth in sales from its pandemic low point. Lammers says the recovery “would not have been possible” without the facility and its new employees, whose training was funded in large part by JEDO.
“One of the most challenging things in any startup factory, like the one we have in Topeka, is scaling it,” Lammers said. “We have 88 people here. So, training that many people was time-consuming and costly, and the JEDO funding really helped us get that off the ground.”
Lammers, who first joined Polo as a Washburn University student 38 years ago, worked his way up from account manager to president, with several stops in between. It’s a prime example of how the growth of one employee, when given the opportunity, can contribute to the growth of a company, and on an even larger scale, the entire community.
“We sense the positive movement of Topeka as a destination community to live and work and play,” he said, “and we want to embrace that and grow, not only the corporate facility, but possibly our footprint in manufacturing to be inclusive of the positive changes in Topeka.” TK
