Idaho

Bringing the Economy Home

Chobani Opens Twin Falls Yogurt Facility Today, But At What Cost To Taxpayers?

Emilie Ritter Saunders / StateImpact

In November 2011, the New York-based Greek yogurt maker Chobani announced plans to build a multimillion dollar manufacturing facility in Twin Falls, Idaho, with plans to hire 400 people.

Today, 13 months later, Chobani’s Twin Falls facility holds its grand opening. New numbers show the yogurt maker hired fewer people than expected, and collected more subsidies than first reported.

A press release for today’s event says Chobani is opening with “over 300″ employees. The New York Times reports the Twin Falls facility has 300 employees. That’s 100 fewer jobs than Chobani first announced, but Twin Falls City Manager Travis Rothweiler says there are more jobs to come. He anticipates Chobani will employ up to 500 people once the facility is running at full capacity.

Back in Nov. 2011, the company said it planned to use about $25 million in business grants, federal grants, and state and local tax dollars to open its state-of-the-art manufacturing facility.  That number has grown to more than $54 million, including worker training reimbursements and waived fees.

Federal, State, Local Spending for Chobani
November 2011December 2012
Business Plus Grant$150,000$150,000
URA-TIF$17,148,747$36,260,927
State$1,050,000$945,548
Worker Training (State)$0$3,300,000
City$6,750,000$14,290,899
Total $25,098,747$54,947,974

Source: Southern Idaho Economic Development Organization

*The City of Twin Falls spent $6,523,445 to upgrade its wastewater treatment facility for Chobani. It also waived approximately $8 million in sewer, building and impact fees.

Rothweiler says the federal urban renewal (URA) dollars more than doubled, from $17 million to $36 million, because the building’s size also more than doubled from its original plan over the course of the last year. Additionally, he says the city always planned to waive its sewer, building and impact fees, but the total value of those waivers wasn’t known a year ago.

The original value of Chobani’s facility was about $180 million. It’s now valued at $450 million. “As the project grew, there were more eligible costs,” says Rothweiler.

“Urban renewal districts get their money primarily by tax-increment financing, which allows the agencies to collect any increase in assessed property tax value within their boundaries after their formation and use them as incentives for developers. In this case, the site is in the city’s urban renewal district, and has [sic] turned the site area into a revenue allocation area that will generate the urban renewal dollars.  The city’s also putting $6.75 million of tax dollars into wastewater pretreatment and sewer line improvements that are needed for wet industry projects to come to Twin Falls.  The deal with the company also puts fee waivers in place for construction and wastewater system capacity.”  – Times-News

The New York Times reports Chobani will also receive a property tax exemption and various tax credits. However, Rothweiler says that’s not the case.

“I’m intimately familiar with the financing of this project,” says Rothweiler. “Whoever said there were tax credits or tax forgiveness – they’re in error.  There is tax increment financing, that is the vehicle used to pay for the bond associated with the project.”

All of the federal, state, and local tax incentives are intended to be a small investment compared to the potential boost the company will give to the entire southern Idaho region.

Chobani founder and CEO Hamdi Ulukaya told The New York Times this weekend that for “every 10 jobs it creates directly, it is expected to create roughly 66 additional jobs in ancillary business. The state expects the total economic impact of our business there to be $1.3 billion.”

For City Manager Rothweiler, any tax dollars spent for this project are worth it. He says the infrastructure improvements made to Twin Falls’ wastewater and sewer systems are a benefit to the community, not just Chobani.

“The opportunities Chobani has presented are incredible,” Rothweiler says. “We’ve seen an 80 percent increase in single-family home permits in the last year. I can’t say Chobani is all of it, but what they have brought, in terms of that sense of optimism about our community, is huge.”

*Correction: We originally reported Chobani will use $62 million in federal grants, and state and local incentives. That number should be $54 million. Twin Falls City Manager Travis Rothweiler says he sent us the wrong set of numbers, and he corrected them today.

Comments

  • FreeMarketFan

    $25 Million or $54 Million it’s still much greater than the $0 it should cost any of us for them to open a facility.

  • http://www.facebook.com/robert.durham.9 Robert Durham

    FreeMarket Fan you’ve got that right. Sewer and water are at capacity and no one else can develop. Way to go city counsil and urban renewal. The biggest sell out of taxpayer money in Twin Falls history.

About StateImpact

StateImpact seeks to inform and engage local communities with broadcast and online news focused on how state government decisions affect your lives.
Learn More »

Economy
Education