TWIN FALLS — A Twin Falls packaging plant will more than double its property value in the next couple of years, but the county is using an economic development tool to provide a tax abatement.
On Friday, the Twin Falls County Commission voted unanimously to grant a property tax exemption to KapStone Container Corp. Idaho statute allows this kind of exemption for industrial businesses that are investing $500,000 or more at their plants.
“Really what it is is a valuation abatement,” Commissioner Don Hall told the Times-News.
Here’s how it works: The county takes an assessment this year of the property value at KapStone Container Corp. (formerly LongView Fibre Paper and Packaging). In 2017, the assessed value was $18 million after depreciation, County Assessor Brad Wills said.
Once that assessment is complete, KapStone hopes to invest $20 million to $30 million in its plant over the next couple of years, general manager Dave Crawford told the Times-News. The increased value of their property won’t be taxed for the first two years. After that, in 2021, 90 percent of it is exempt; in 2022, 80 percent of it is exempt; and in 2023, 70 percent of it is exempt.
What’s important to note is that the plant at South Park Avenue West is part of an urban renewal district. Since the district was created in 1998, any tax on the increased property values has been given to the city’s Urban Renewal Agency for public projects.
“The person that’s not seeing an increase in funds is actually the urban renewal district — not the general public,” Wills said.
The district expires in 2022, so in 2023 other taxing districts will be able to collect taxes from 30 percent of the increased value at KapStone.
“This is the first opportunity Twin Falls County has taken to use this as an economic development tool,” Wills said.
KapStone Paper and Packaging bought Longview Fibre in 2013, but the plant has been around since 1970. The company is being acquired by WestRock Co., which owns other plants around the country.
The goal is that with the incentive, the company will keep jobs here in Twin Falls, instead of upgrading one of its other plants.
“There’s not a lot more important than to have good, solid employers that pay well and help our citizens gain in lifestyle and quality of life,” Hall said. “The overarching thing here is it’s good for the community.”
According to its application, KapStone Container Corp. employs 130 people, with the average salaried employee earning $81,857 annually. Hourly employees earn $34,538 on average.
The company estimates it will add seven new jobs in the next four years, with an average annual salary of $50,974.
The upgrade to the Twin Falls plant will not change the facility’s footprint, but bring in a new corrugator to turn paper into cardboard. KapStone manufactures boxes for companies such as Lamb Weston, Clif Bar, Glanbia and Jerome Cheese.
Twin Falls County has been able to offer these tax incentives for a handful of years, but the minimum investment amount used to be $3 million. It was only about a year ago that the Idaho Legislature changed the minimum investment to $500,000, Wills said.
“We certainly want to encourage these companies to continue to invest in our community,” Hall said.
KapStone had asked for a full tax exemption on the increased value for five years. But commissioners offered only a partial exemption in the third through fifth years because they recognized the added tax value helps the overall tax base.