Gerber set to expand Fort Smith plant, add 25 jobs

An item on the agenda for Tuesday’s (July 7) Fort Smith Board of Directors will ask directors to consider a resolution to help finance an expansion at the Gerber Products Company’s Fort Smith facility through the issuance of about $30 million in industrial development revenue bonds.

Gerber is expanding the product line at its facility at 4301 Harriet Drive in a project known as Project Best-In-Class, Fort Smith Deputy City Administrator Jeff Dingman said in a memo regarding the proposed resolution.

In a letter to Price Waterhouse Coopers, City Administrator Carl Geffken said the city offered the proposal in order that Fort Smith could compete for the major retention and expansion project. The principal benefit of the bond program is “the elimination of property taxes when financing the construction of new buildings and purchasing new equipment,” Geffken said in the letter.

The Gerber expansion will house food processing and manufacturing equipment and will include associated machinery and infrastructure improvements at the site. In addition to the product line expansion and the retention of 480 employees, the company will add 25 new jobs with an approximate average wage of $21 per hour, Dingman said in his memo.

After the expansion is completed, Gerber and the city will enter into a payment in lieu of taxes (PILOT) agreement. Through this program, Gerber will pay an amount equal to 35% of the normal property taxes for 15 years. The estimated value of this incentive is approximately $1.9 million based on the 15-year PILOT period, Dingman said in the memo.

Issuance of the bonds will require approval of an ordinance by the board at the time the bond issuance is ready to proceed. Gerber Products Company will be solely responsible for debt service payments on the bonds. The city has no obligation to make the bond payments.

Gerber has indicated it intends to apply for the Tax Back Program, a state program where companies can apply for rebates on state and local sales taxes paid for building materials or equipment necessary to build or expand a business in Arkansas, Dingman said, noting that will be a separate matter for future consideration by the BOD.

“The Fort Smith Regional Chamber of Commerce, as the city’s economic development representative, was instrumental in securing this additional investment by one of Fort Smith’s significant employers,” Dingman said in the memo. “This action and the resulting investment by Gerber Products Company will support one of the board’s top goals: economic development and job retention/creation.”

In a letter to the city, Bill Partyka, president and CEO of Gerber, thanked the City of Fort Smith for its continued support of the company.

“We appreciate the City of Fort Smith’s partnership and participation in supporting our project. Gerber has had a long-standing relationship with the state of Arkansas and the Fort Smith community, and we look forward to continuing that relationship for many years to come,” he wrote.