New company could create jobs, wants bond agreement
COLUMBIA - A pharmaceutical company has plans to come to Columbia, but is seeking a Chapter 100 Bond from the Boone County Commission. The commission will vote Thursday to either approve or deny the agreement.
Northwest Medical Isotopes, LLC. is a radiopharmaceutical company. It produces chemicals used in medical diagnoses.
The project would cost $108 million.
NWMI sought a Chapter 100 bond from Boone County, which is a tax abatement agreement between a government entity and a company.
In Boone County, the company buys bonds from the county. The county uses that money to fund the project. The county then owns that property and the equipment, making it all tax-exempt.
However, if a major company and project is tax-exempt, community organizations that typically benefit from tax revenue will lose funding. With the Chapter 100 bonds, the company pays the city 50% of what they would have if required to pay the full tax value of its project.
This is due to depreciation. Boone County presiding commissioner Dan Atwill said he compares it to buying a new car- once you drive it off the lot, it's not worth near at much as it was. He said the county would be overtaxing if they were to require the 100% of tax value from the front end.
"So this makes it more equitable, and in my opinion, more fair, to all a lower tax rate for the first 5 years, and at the end of that time, you get 100% tax value of whatever it's worth then," Atwill said.
Dave Griggs has been involved in all three of Boone County's Chapter 100 agreements. He said he and a committee wrote the current Chapter 100 policy for the county.
"Boone County's policy is much more restrictive than the state of Missouri's," Griggs said. "Any affected tax entity must appoint a representative from their organization to what we call the Chaper 100 Review Committee."
NWMI says it can create 104 jobs at its Columbia location at an average wage of $35 per hour, which Atwill said is nearly double the average wage of employees here.
If NWMI does not meet those expectations, Atwill said, the tax abatement will not occur.
"The county never takes risks in these kinds of deals. We always have the risk shifted to the applicant in the end," Atwill said.
Atwill said the commission considers several factors before making a decision on a Chapter 100 agreement, like employer and wage quality.
"We're interested in seeing that the type of work that's being done fits into the community's standards and that it's sustainable. We don't want an overnight operation," he said.
Griggs said there will be many people needed to make the operation run smoothly.
"Somebody's got to make it, somebody's got to package it, somebody's got to deliver it, somebody's got to clean the facility. The opportunities here are amazing," he said.
He said the project could be "transformational" for the community.
"We will be the only source in the United States, in North America," Griggs said. "This could be the project that anchors Columbia as the place to do this kind of project in the country."
The project was introduced in 2014. Atwill said the delay is not because of the commission.
"They had to obtain approval from the Nuclear Regulatory Commission and that's what takes time. There are all kinds of steps they have to go through to get the licensing they need to produce these products," he said.
NWMI received its construction permit from the NRC earlier this year. It plans to start building at MU's Discovery Ridge Research Park by the end of this year. Atwill said it could be 2021 before the company is in business.
Atwill said he expects all commissioners to vote in favor of the Chapter 100 Bond agreement with NWMI on Thursday.