Frito-Lay of Texas has asked the city of Jonesboro to issue industrial development revenue bonds not to exceed $150 million and enter into a payment in lieu of taxes agreement for another planned expansion of its facility at 2810 Quality Way.
The company did not immediately respond to an email from Arkansas Business requesting details of the project, including how many jobs could result from the expansion. But the Jonesboro Sun reported Friday that the move would lead to 30 new jobs.
Both documents granting the company's requests are listed on the city council's Sept. 20 meeting agenda, but a public hearing on the bond issuance is set for 5:25 p.m. Oct. 4 at the Municipal Center, 300 S. Church St.
The city's Finance & Administration Council Committee voted on Wednesday to forward the agreements to the full city council for approval.
The documents state that the project consists of the acquisition and construction of a warehouse and manufacturing facilities, infrastructure and improvements; and the acquisition and installation of equipment for the preparation, processing, packaging, handling and storage of food products.
These requests follow Frito-Lay's announcement last year of a $45.7 million, 80,000-SF plant expansion.
"We're just glad you're doing it. I promise you that," Mayor Harold Perrin told Frito-Lay's legal counsel at the finance committee meeting on Wednesday. "You all have been a great corporate citizen, and this, whatever, the addition — I'll put it that way because I know it's confidential — to float an issue that big is substantial for the city and we appreciate you."
The agreements state that Frito-Lay would lease the facility from the city for 20 years as it pays rent sufficient to cover the debt service on the bonds. The documents do not list what those payments would be.
The proposed payment in lieu of taxes agreement includes a provision that the company pay the city 35 percent of a certain property/transaction tax it would have been charged. The property is exempt from that tax because the city owns it.
Payments would be due on Oct. 10 each year following the completion of construction, and Frito-Lay would be charged 5 percent interest on late payments.
Also, according to the agreement, the company would be responsible for paying all other taxes and assessments levied and assessed on the project.
Frito-Lay opened the Jonesboro plant in 1998.
Arkansas Business will update this story.