Valley Center approves tax-rebate package and backs KDOT grant application for National Plastics expansion

Valley Center council voted to approve a tax-rebate agreement with National Plastics that will reimburse increases in the city portion of general property taxes for tax years 2027 through 2031, with a city review in 2031 to consider extending the rebate for up to five additional years. The approved package is structured as a reimbursement to the company for the incremental city tax revenue generated by its planned expansion north of the existing facility.

City staff told the council National Plastics plans a roughly 36,000-square-foot plant expansion and a rail spur. The rebate structure is tiered under the city's economic development policy: capital investment and job-creation thresholds and workforce-benefit components can increase the percentage up to the policy maximum. Staff said the company's projected investment met the city's one-to-one economic-benefit threshold used in the review. The rebate will be paid only on verified increases in city property taxes and is limited to 100% under city policy.

Council also authorized staff to submit a KDOT economic-development grant application that would fund a portion of the proposed rail spur. Staff said the rail-spur application lists an estimated project cost of about $2.1 million and that the program prefers a 25% local match; National Plastics indicated it would provide the match and the city would serve as the sponsoring local government and fiduciary for grant reporting. The application, if funded, would be a reimbursement grant requiring coordination on payment and reporting procedures.

During review council members asked about rail operations and traffic impacts. Staff and National Plastics representatives described a switching operation in which short cuts of cars (typically the locomotive and up to four cars) would be moved into the site and later rejoined to the main train. The company and BNSF materials included an estimate of roughly one or two switching events per week initially (about eight or nine cars a month), though that could change with demand. Speakers said the short switching moves are not expected to cause extended road blockages.

A staff member reminded the council of recent state-level changes under HB2745 that affect how abatements and tax roles are treated; that legislative context was discussed as background but did not change council approval.

The council approved both the tax-rebate agreement and the motion to sponsor and submit the KDOT grant application by voice vote. Next steps in the process are finalizing the abatement documents, executing any required city-company agreements to set payment schedules and performance requirements, and completing the grant application details for KDOT review.