Battle Creek: 'More Good Things To Come'
The expanded facility will provide some extra breathing space for about 300 current Kellogg employees. The research and development facility will be expanded to include food and packaging review rooms, chemistry labs, test kitchens and development labs.
Since the WKKI facility opened in 1997, Kellogg Co.'s net sales have doubled from $6 billion to almost $12 billion, and net sales from innovation have also almost doubled. The institute features one of the world’s largest food pilot plants, where thousands of new ideas for food products are tested annually before full-scale production.
All of Kellogg’s global food research efforts are consolidated in the institute, which the company says enables its scientists, nutritionists, engineers and technical experts to interact more effectively, and, in turn, hastens the speed with which new products can be delivered to market.
Kellogg will invest $40 million to expand the facility and will buy $14 million worth of new equipment for it.
The Battle Creek City Commission approved the site as a 10-year Agricultural Processing Renaissance Zone, a designation that gives the property a decade of exemption starting in 2009 from all property taxes except local schools’ special millages and bond issues, according to City Manager Wayne Wiley. The level of exemption will decrease incrementally during the last three years: Kellogg will have tax exemptions of 75 percent, 50 percent and 25 percent, respectively, in years eight, nine and 10.
Jim Hettinger, president and CEO of Battle Creek Unlimited, said the Kellogg expansion is a sign of “more good things to come” for downtown Battle Creek. BCU, the city and the Kellogg Foundation would like to surround the Kellogg investment with a mixed-use redevelopment of the downtown that would involve housing — which is already under way — and some retail that would cater to the tastes of the highly paid researchers that work for Kellogg.
BCU, the city, the Kellogg Co. and the Kellogg Foundation are also interested in leveraging Kellogg’s investment to create a greater discipline in the area of food safety and food defense, Hettinger said.
“We’re looking at setting up an independent research institute to complement what Kellogg is doing. We want to create conditions for continued Kellogg research and development investment in downtown,” he said. “This has huge implications for food science and particularly for Michigan, where we rank among the top 10 states in production of fruits and vegetables. That means we go from the ground to the grocer’s shelf, and that creates a huge opportunity for someone to penetrate the food supply chain and do something dastardly.”
The vulnerability of the U.S. food supply chain is pretty extreme, but most people don’t realize it, Hettinger said. In addition to the possibility of food supply contamination by terrorists, there is a complete lack of knowledge about the origins of a lot of food ingredients coming into the United States in the form of a finished product, he pointed out. The U.S. imports food products from China without knowing what might have leached into the soil where the food was grown. Right now, there’s just no way of telling, he said.
That kind of research would likely be of interest to the Grand Rapids area because it’s home to a couple of Kellogg facilities and a number of other food processors, Hettinger noted.
Wiley said the hope is to have the new research center up and operating in the next 18 months to two years. With a research institution that’s focused solely on research and education, Battle Creek could create a market niche around food research, he said, and that could prove to be a catalyst for the downtown area.
He said the group is also trying to raise some private funding to create a more campus-like atmosphere downtown.
“We’re looking at the possibility of relocating some of our educational institutions to the downtown or re-emphasizing some that are already there, such as Western Michigan University,” Wiley noted. “We think we can tie things together in a way that will make our downtown something totally unique in West Michigan. We need to rethink where we want to be in the future as a community — and the heart of any community, of course, is its downtown.”
Hettinger said Kellogg accounts for 40 percent of the city’s tax base and one-third of the community’s United Way contributions. Karl Dehn, BCU’s marketing director, indicated that when the 10-year Agricultural Processing Renaissance Zone is up, the Kellogg expansion could result in as much as $1.2 million annually in new property taxes, as well as increased income tax revenues if new jobs are created at the research and development facility over time. CQX