At its Tuesday meeting, the Newton City Commission approved a 90-day lease agreement with Human Plant Solutions to occupy the building.
“Having an occupant in the building is beneficial, as well,” Commissioner Rich Stinnett said in favor of the lease. “Empty buildings die a fast death.”
The new company builds prosthetic limbs made out of natural fibers.
“We developed a new material for prosthetics for amputees,” company CEO and co-founder Sam Spallitta said. “Instead of using carbon, we’re using fiber from plants.”
The agreement with the city gives the company a pass on paying rent, but they will pay utilities at the building, something that costs the city about $2,300 a month. The company has the chance to renew its lease for another 90 days. The initial agreement would result in the city saving between $6,900 and $13,800 in utility bills.
At the commission meeting, City Manager Kelly McElroy said that the city would work to then find the company a more permanent location.
McElroy said there was another company also interested in using the entire building and if that would come to fruition, the company would need the full building in 6-8 months.
If that doesn’t work out however, Spallitta talked in a previous interview the company could have longer-term plans for the building if the city would allow it.
“If we can grow in the way I would love to see us grow, I would definitely see us purchasing the building from the city.”
A quick history crash course, the ABI building has served as an albatross around the city government’s neck after past commissions and administration spent $6.8 million building the facility to spec for a newly formed, but today, defunct chemical coating company. The company folding left the city holding the bag and covering around $50,000 a month in debt service payments, plus utility fees. The specialized building has made it difficult to market or find a tenant since the company’s failure.
That’s not a problem for Human Plant Solutions, said Spallitta.
“For what that building has and where we are as a company, there wouldn’t be a better building for us unless we built our own,” he said.
And, what specifically does the company do?
“For us, we deal a lot with logistics and shipping,” he said. “We get casts of amputees. We make the device. If you look at Newton, there’s five major cities within 500 miles.”
Spallitta said the hemp material is cheaper, safer and a natural alternative to the more commonly used carbon fiber prosthetics.
Spallitta has a seven-year background in selling medical equipment and he presented a bullish view of the future of his prosthetic company and hemp, in general. He expects demand for prosthetic limbs to double in the next 30 years.
He said that currently, his company has to purchase hemp from overseas to find the quality of fiber needed to make the prosthetic limbs.
However, he expects that to soon change.
“I can be 30 percent cheaper than carbon,” he said. “As domestic sources come up, it’s going to increase more. We’re sitting, waiting and learning.”
He said that with the amount of arable land in Kansas he expects the state to eventually become one of the country’s top producers.
He also said with Wichita State considering starting up a program to teach students how to make prosthetics, his company could soon have a local employment pipeline.
Spallitta said that COVID-19 slowed the work, but he was excited to have a location in Newton.
The company is locating in Newton in part because of the work by the Kansas Department of Commerce, as well as Harvey County Economic Development and the city of Newton. Spallitta said the Department of Commerce gave the company incentives to come to Kansas.
Eco Devo Director Beth Shelton credited the Kansas State Department of Commerce for being far more helpful in recent years than in years past when it wasn’t fully staffed.
“With our new secretary of commerce and Lt. Governor, they’ve really made an effort to make us (the state) competitive again,” she said to the city commission. “If you look at the previous three years, the leads came from Wichita or myself or direct contacts. If you look now, you can see many of them are from the Department of Commerce, which is great.
Kansas ranked 10th in the nation in economic development projects per capita in 2020, according to Site Selection magazine. That was a 10 state jump since 2019.
On the Newton end, the city approved the company’s lease on a vote of 4-0 with Commissioner Rod Kreie abstaining.
Kreie recused himself from the vote, saying that he had been working closely with the company on the economic development side and wanted to be transparent.
Also, as the final bit of clarification at the end of the story, the city hopes to call the ABI building “Building V” at the airport going forward.
“V for victory,” McElroy said.
While the city owns the Building V – formerly known as the ABI building — it does need the county to sign off on the lease, as the county does co-own the property where the building is located.