City OKs $500k in incentives for international firm

By Burk Krohe

City commissioners unanimously approved an economic development package for an international biosciences firm at Tuesday’s meeting.

The incentives package is worth $500,000 to Prathista International. The firm’s parent company, based in India, develops eco-friendly fertilizers and feed supplements and is attempting to penetrate the American market. The funds would go toward improvements at the airport’s armory building to create a pilot plant facility.

Commissioners approved the package despite some initial reservations, which were expressed at a Nov. 15 meeting and reiterated Tuesday night. They wished to know exactly what kind of investment and commitment the firm would be making, and they also questioned the effectiveness and viability of the firm’s products. Ultimately, commissioners decided the benefits of an upfront investment from the firm and improvements to the armory building outweighed any reservations that remained by the end of the discussion Tuesday.

“The company has really gone out of its way to respond to every concern brought forward,” Lauren Palmer, assistant city manager, said.

As far as the question of the firm’s investment, city and Prathista officials clarified that the firm would make improvements to the airport armory building and install its lab equipment before the city would be required to reimburse it. Palmer noted the firm would be reimbursed for up to $500,000, depending on the extent of the improvements, but Prathista’s overall investment will be around $6 million.

Responding to previous concerns from Mayor Jim Sherow and the Manhattan Living Wage Coalition, Prathista also raised its wages for its lowest level workers to $12.20 an hour.

However there were still concerns about the products.

“It’s really still a venture capitalist investment,” Commissioner Wynn Butler said. “That’s the big risk here.”

Butler was referring to the fact that the facility would be a pilot plant dedicated to research and development to adapt the firm’s products to the United States. The firm believes it will be successful and is planning a second phase. After three to five years, the firm envisions constructing a 52,000 square foot permanent manufacturing facility that would create about 50 new jobs.

“One of the things that’s very clear to me is the R and D has to work,” Sherow said.

Commissioner Rich Jankovich agreed. Jankovich said a 15-year-old parent company and success in other parts of the globe are positives but he still characterized the firm’s entry into the American market as speculative. However, he said the improvements to a city asset, which could potentially be used for other purposes in the future, mitigate some of the risk.

Butler and Commissioner John Matta noted they received several emails from professionals and former professionals in Prathista’s field, saying Prathista’s claims of success are dubious. Steven Bram, assistant to the dean of agriculture, who has worked Prathista officials to bring the firm to the United States, noted the products improved quality and quantity (5 to 10 percent more yield) on grains in India.

Bram also said soil and climate conditions in India are different from those in the United States. He said it’s hard to tell right now what the results of Prathista’s research and development will be, but added Prathista is working hard on its research to make the most viable products. 

“They do understand that it’s a very different market here,” Bram said.

In the end, commissioners were satisfied with Prathista’s investment in the community.

“I just hope I’ll see you in another three years and instead of us giving you money, you’ll be giving us money,” Commissioner Loren Pepperd said.

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