The Richland City Council tonight will consider whether to let ConAgra Lamb Weston swap 8.6 acres of land at Columbia Point for 80 acres at Horn Rapids.
The purveyor of frozen potato products for several years had planned a new office building at Richland's Columbia Point, but recently announced that it instead will keep and expand its offices in Kennewick.
"After carefully evaluating various sites throughout the Tri-Cities, we have decided that the Lamb Weston office will remain in Kennewick," said Gary Cuddeford, vice president of operations, in a statement. "Key advantages are lower costs, flexibility in design and easier access for our employees. ConAgra Foods is firmly committed to seeing this through to completion, and we greatly appreciate the efforts of TRIDEC and the cities of Richland and Kennewick as we work together to find a mutually beneficial solution."
The company's decision means Lamb Weston no longer needs the land it purchased from Richland at Columbia Point for $1.43 million in August 2010 after about three years of negotiations, said Bill King, deputy city manager.
The company said it would like to develop an automated warehouse at Horn Rapids, and King said the value of the land is about the same.
The purchase agreement under consideration by the council sets a value of $18,500 per acre for the Horn Rapids land, or a total of $1.48 million for the 80 acres. Lamb Weston also would get a five-year option on another 80 acres at the same price per square foot.
The agreement calls for Lamb Weston to sign the title for the Columbia Point land back over to the city in an even exchange for the Horn Rapids land.
Even though Lamb Weston gets about a $50,000 benefit in the land swap when the two purchase prices are compared, King said the city also sees benefits from the agreement -- namely that it gets to decide what happens to the Columbia Point property instead of having Lamb Weston sell it without the city having any control over the purchaser or the use.
"I think the council would rather have a little more control over the uses that go on that land," King said.
The other up side is that the Tri-Cities as a whole would see a net increase in jobs, he said.
Under the previous plan, jobs simply would have moved from Kennewick to Richland. This way, the office jobs stay in Kennewick and the warehouse jobs are added in Richland, King said.
"So I think it is a net gain to the Tri-Cities," he said.
The warehouse will generate tax revenue for the city that over time will exceed the value of the land, King said.
"The increase in property tax value from that kind of major investment is significant," he said.
The agreement calls for Lamb Weston to make a minimum of $35 million in improvements to the land, essentially guaranteeing that the company follows through with the building.
Tri-Cities Development Council CEO Carl Adrian said in a statement that the deal is a win-win-win for Richland, Kennewick and Lamb Weston.
"It's a testament to the Tri-Cities that while communities across the nation are dealing with a national economic crisis, our region is seeing this substantial investment by a top company such as ConAgra Foods," Adrian said.
Lamb Weston is one of the area's largest employers, with about 4,500 employees in the Mid-Columbia. The company has offices in Kennewick, two plants in Pasco, a plant and technical center in Richland, and several additional plants throughout the Mid-Columbia.
The company closed its potato processing plant in Prosser, which employed about 200 people, in May 2010.
If you go
The council meets at 7:30 tonight in the council chambers at Richland city hall, 505 Swift Blvd.
-- Michelle Dupler: 582-1543; firstname.lastname@example.org