By Neil Johnson njohnson@gazettextra.com March 14, 2022
Janesville
A real treat could be in store for a developer who recently completed a pair of large-scale industrial buildings on the city’s south side. But it wouldn’t be a treat that people would want to eat.
It’s actually for the dogs.
On Monday, the Janesville City Council breezed through approval of a $447,200 pay-as-you-go tax-incentive package for Rockford, Illinois-based Phelps Pet Products—a pet snack producer that plans to produce jerky-style, “meaty” dog treats in Janesville.
Phelps is working with Milwaukee developer Zilber Property Group on a deal to lease a newly completed, 178,000-square-foot industrial building at 400 W. Venture Drive to manufacture and warehouse its pet treats, city of Janesville economic development officials announced.
Phelps describes itself as a certified-organic pet food manufacturer that makes jerky-style pet treats for major name brands.
Phelps could launch operations in Janesville as early as this summer, according to a city memo. The company aims initially to employ about 46 people, although it expects to ramp up hiring and add a second shift in 2023. Ultimately, the plant could employ 103 people by 2024.
Under a tax-increment financing deal the council approved 6-0 on Monday, Phelps would be required to pay a “livable wage” to 103 people over the next nine years, which is the full term of the TIF deal.
Under the metric the city of Janesville used in crafting the TIF deal—the Madison Institute of Technology’s Living Wage Index—Phelps would be required to pay wages equivalent to at least $20.82 per hour through 2031, the final year the city’s south side business park TIF district would operate.
Janesville in the past has forged similarly structured deals with other companies, including a 2016 deal with Dollar General pinned to the creation of 550 jobs at that company’s 1-million-square-foot warehouse on Janesville’s south side.
City Finance Director David Godek said the increase to the tax base that would come through Phelps’ manufacturing presence and other growth projected in the south side TIF district, likely would more than repay the city’s incentive to Phelps.
He said because the deal is structured as a pay-as-you-go incentive, Phelps would only be reimbursed based on the number of employees it hired and retained.
If Phelps does not hire and retain 103 workers, it wouldn’t collect the full payout.
Kristen Fish-Peterson, a Madison-based economic development consultant who has worked on the TIF deal on behalf of the city of Janesville, told The Gazette the deal will help the city land and keep Phelps and about 100 good-paying jobs at a time when multiple communities are competing for such projects.
“In order to receive an incentive, the company has to agree to pay a living wage which is higher than a lot of manufacturing companies are paying right now,” Fish-Peterson said.
“So they will be paying a decent wage, which will help them in recruiting employees. But that (wage cost) might put a crunch on their business pro forma for a couple of years until they can ramp up (operations).”
Phelps has been in operation since 1966, but it has expanded its operations dramatically over the last decade after being acquired by financial firm Wafra/Granite Bridge Partners in 2012.
Zilber capped off construction of the building last year. It’s one of two twin manufacturing facilities the company built last year off West Venture Drive.
So far, Phelps would be the first company to lease space there, city council President Douglas Marklein said.
The move comes after Phelps Pet Products acquired a cache of pet treat manufacturing equipment from an Arkansas manufacturer, a move announced in early February, according to a report in trade publication Meat+Poultry.
Phelps had intended to make a $20 million investment in outfitting an 180,000-square-foot facility that would allow the company expanded space to process and package its products and to store ingredients and finished products, including specially shaped jerky treats, the trade publication reported.
The planned facility would be the company’s fifth jerky production and warehousing site, Meat+Poultry reported, though at the time of that reporting, Phelps had not disclosed the new site’s location.
The Zilber property is roughly 180,000 square feet.
Planning Director Duane Cherek said based on plans the city has seen, Phelps’ planned operations would not include rendering of meat or meat byproducts. He said the ingredients tabbed for use would be frozen and ready for processing.
Those operations, Cherek said, fit under the city’s standard manufacturing zoning rules.
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