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A SITE SELECTION INVESTMENT PROFILE
GREATER TOPEKA, KANSAS
From Site Selection magazine, July 2010
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Healthy Choices

Companies in the human and animal life-sciences fields select Topeka for expansion projects.

GREATER TOPEKA, KANSAS
by RON STARNER
R

ick Wienckowski remembers a time when companies seeking support for expansion plans weren't always greeted warmly in the capital city of Kansas.

"It was more a benign neglect 15 years ago," the CFO of Hill's Pet Nutrition says of what it was like to do business in Topeka in the mid-1990s. "Today, the government leaders here work very closely in partnership with private industry to promote economic development."

The results of that partnership have been very good for Topeka-based Hill's, notes Wienckowski. Since 1995, the animal health company's global sales have grown from $500 million a year to more than $2.2 billion annually.

"The biggest change that we have seen in Topeka over the last decade and a half is that the business climate on the part of the government has become a lot more supportive of businesses," he says. "They work together with you to make your business a success. Also, the community has passed an investment sales tax that generates the funds to encourage businesses and develop business parks and offer training programs. The community was smart enough to realize there was no free lunch to do these things."

GO Topeka, a subsidiary of the Greater Topeka Chamber of Commerce, is funded by a countywide half-cent economic development sales tax, which generates around $5 million a year, as well as private funding for the purpose of supporting economic development. The dispersal of that money is overseen by the Joint Economic Development Organization, comprising elected officials from both Shawnee County and the City of Topeka.

A recent study by Impact DataSource of Austin found that, over the next 10 years, efforts funded by the half-cent tax should lead to the creation of 3,770 direct and indirect jobs and bring in 762 new residents to Shawnee County. The salaries to be paid to these workers over the coming decade will exceed $2 billion, with nearly $77 million worth of taxable sales and purchases expected in the county, according to the economic consulting, research and analysis firm.

"This is a great return on the investment for economic development and is worth celebrating," said Steve Jenkins, senior vice president of economic development for the Greater Topeka Chamber of Commerce/GO Topeka. "In addition to the benefits to other taxing entities and the wages being added to the community for the next decade, we continue to see a growth in the primary job sector that drives growth of small businesses and improvement of the community's quality of life. This is what the community envisioned when the sales tax for economic development was passed by the voters."

The Right Mix of Ingredients

Wienckowski concurs, adding that the surrounding community's vision helped pave the way for his own company's growth. "The business was founded here and grew in Topeka," he notes. "The business was formed by Hill's Packing Company, which made high-quality pet food in the early 1920s. Hill's met up with Dr. Mark Morris, who developed the science of nutrition to alleviate disease in animals. He was a vet and he needed a high-quality manufacturer to make a diet for animals with kidney disease. He and Hill's built a business to make and sell a nutrition diet with Colgate Palmolive in the late 1970s, and that is the parent company now."

The right mixture of ingredients makes Eastern Kansas a natural home for Hill's, the CFO explains. "First of all, we need a good source of grains and meats, and those two things are in very good supply here in Topeka. Plus, there is a very good infrastructure in Kansas to make and sell products to both coasts of the U.S. You combine all of that with the excellent business climate, the investment incentives from the state, and no property taxes for machinery and equipment, and this is a very good place to do business."

Since 2004, Hill's has expanded its Topeka real estate holdings significantly, investing $40 million in a manufacturing plant and expanding an R&D center. Today, the company has a 130,000-sq.-ft. (12,077-sq.-m.) office building, a 150,000-sq.-ft. (13,935-sq.-m.) manufacturing plant and a large R&D facility.

"The company had about 700 employees in Topeka before these expansions," Wienckowski says. "Today, we have about 1,100. And our total investment into facilities, equipment and machinery in Topeka over that time has come to about $80 million."

None of this would be possible without an exceptional work force, he notes. "Topeka has a very hard-working labor pool. They have a very strong work ethic and they are well educated. The community colleges and technical schools work with the businesses to design programs to meet our needs," he adds. "At Washburn University, they work with us on specific classes to teach people how to run our computers. You combine that with a very highly productive K-12 system and it adds up to a winning formula for Hill's."

Wienckowski is not alone in attributing his company's success, at least in part, to the support it receives from the community. At nearby Stormont-Vail HealthCare in Topeka, growth is a byproduct of the company's location, according to the executive most accountable for corporate performance.

A regional health system anchored by a 586-bed tertiary medical center with a medical staff of 400, Stormont-Vail recently added a new Emergency Department, Trauma Center and Pavilion Tower containing 62 beds and 120,000 sq. ft. (11,148 sq. m.). Of the 4,100 workers employed by Stormont-Vail, 3,900 work in Topeka.

"The business climate in Topeka is very favorable and open to new business initiatives of all types," says Maynard Oliverius, president and CEO of Stormont-Vail. "The Topeka Chamber and GO Topeka work in a highly cooperative way with the entire community and region to facilitate expansion of business opportunities. The transportation, railroad and airport are superb and can meet the needs of any business."

A Pace of Continuous Expansion

The region also supplies a "highly educated work force that ranks among the highest in the nation," Oliverius says. "One local university and three major universities within 60 miles provide any educational need that the business community requires. The health-care capabilities in Topeka assure that 99 percent of all health-care services needed by patients in Topeka can be delivered locally."

Oliverius says he is so keen on the area business climate that his company will continue to move forward aggressively with expansion and improvement projects. "We are in the process of renovating several floors of our existing three-tower campus," he says. "Additionally, we will continue investing about $25 million a year in facility renovation and technology upgrades. We will also continue to expand the number of doctors within our employed physician division. That rate is about 15 to 20 physicians per year. For each physician, we add ancillary and support staff of about four to five full-time employees."

The virtually continuous expansion pace has pushed Stormont-Vail to it current footprint of 1.61 million sq. ft. (149,569 sq. m.) in Topeka.

Oliverius says he sees no signs of that growth abating anytime soon. "The health-care market in Kansas is outstanding, and Topeka specifically has a health system that will rank among the highest in the nation," he notes. "Stormont-Vail is a top 100 integrated health-care delivery system. We are a verified trauma center. We have the highest-level neonatal and high-risk delivery service that exists in the country. Stormont-Vail is also accredited by the American Nurses Credentialing Center as a Magnet Facility — one of only 340 in the world."

For Topeka, accolades like this are not unusual. On May 26, Topeka was named one of the Top Ten Cities for the Next Decade by Kiplinger magazine. The ranking was based on a community's ability to be prosperous, innovative and create jobs.


This investment profile was prepared under the auspices of the Greater Topeka Chamber of Commerce/GO Topeka. For more information, contact Steve Jenkins at 785-234-2644 or by e-mail at sjenkins@TopekaChamber.org. On the Web, go to www.TopekaChamber.org.


Story in Pictures

Rick Wienckowski, CFO, Hill’s Pet Nutrition
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