How to Pay for the GM Fairfax Plant Expansion

KANSAS CITY, Kan. — A proposed $120 million expansion at the General Motors’ Fairfax plant would be the largest new construction at the plant since it was built, and Thursday evening, government leaders are discussing the contribution they will make to the project.

The expansion would build a new 400,000 square foot paint shop at Fairfax. GM is asking the Unified Government to issue $120 million in bonds to pay for the expansion. Wyandotte County would own the new plant, with the automaker paying off the bonds with rent payments.

Kansas City, Kansas Mayor Joe Reardon endorses the project because he says it will boost the economy in the entire metro area.

“At the end of the day it’s because the Midwest in Kansas City, Kansas and this Kansas City region… we have great workers and we build high quality cars and GM understands that and is willing to make continued investments to continue to have that,” said Reardon. “And that’s good for everyone that works inside the plant.”

General Motors is the largest private employer in Wyandotte County and the Unified Government’s biggest taxpayer. If the bond issue is approved, GM plans to have the plant operating in 2014.

Reardon says the Unified Government is not obligated to repay the bonds if GM stops leasing the building. General Motors is also likely to receive at least a ten-year tax abatement on the new facility.

The Ford Claycomo plant is also finishing up a major renovation. It is almost finished with a one billion dollar body shop and stamping plant. The new facilities are expect to be used to produce Ford’s transit commercial van and the next generation of F-150 pick-up truck.

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