SALEM — Neways International, the largest employer and property tax revenue generator in tiny Salem, may pull up stakes and move.
Neways, a health and personal care company, is talking with Springville city to move the company's headquarters and manufacturing plant to a commercial area west of I-15 and south of 400 South, said Layne Long, Springville city manager. Tuesday night the Springville City Council rezoned the site to allow the same format that Neways wanted in Salem.
"I wished them the best of luck," said Salem Mayor Randy Brailsford, who has been trying to keep the company from leaving.
Neways Chief Executive Officer Tom Mower Sr. said the 14-year-old company, which will do $600 million in sales this year, said the plan to move followed the Salem City Council's refusal to change zoning laws that affect the firm.
Most of the company's sales occur outside of Salem, which doesn't produce sales tax revenue for the city, said Salem City Recorder Paul Hair.
While most of Neways employees live outside Salem, many buy food and gas there, Mower said. Pulling out of Salem could hurt other city businesses, which would also impact the sales tax revenue the city collects.
The city as a whole received nearly $329,000 in sales tax revenue in fiscal year 2000, slightly more than the $315,000 estimate, Hair said.
Neways produces about $9,000 a year in sales taxes, about the same as any other business in Salem, he said. But the city could stand to lose much of the $18,000 a year estimated to come from two fast-food eateries near the plant. Each produces about as much as Neways in sales tax revenue, Hair said.
The two fast-food establishments were so popular their owners asked Neways to stagger lunch breaks so the businesses wouldn't be overwhelmed, he said.
Neways' dilemma with Salem arose after the company announced plans for a new five-story building — significantly taller than was allowed under existing zoning codes — but the key issue appears to be the city's refusal to allow a corporate logo that would have added another 20 feet to the building's overall height. The logo falls under sign ordinance regulations.
The City Council changed its height ordinance to accommodate the tower — but refused to change the sign ordinance.
"I was really quite shocked that Salem wouldn't let us build it for the sake of a logo," Mower said. "I wanted to stay in Salem . . . I wanted to help Salem."
The company employs about 700 people — but Mower also plans spinoff businesses that could boost his employee ranks to about 2,000 in a few years.
The company has about 400,000 square feet of space in Salem that will be sold or converted into warehouse use, Mower said.
Planned spinoff businesses include a bottle factory and printing facility, in addition to expanding the company's manufacturing capability.
City officials also were reluctant to allow Mower Properties, the company headed by Tom Mower Jr., to build an 877-unit development of small homes and condominiums near the planned tower. Salem has never allowed condos.
"Our water and sewer couldn't handle it," Brailsford said. "The council rejected the clustering of homes."
The city wanted Neways to pay for the sewer expansion up front and the company was unwilling to do that, Brailsford said.
C&A Construction, the firm that Neways hired to build the homes and five-story tower, told city officials that the residential development would be a 10- to 15-year project.
But Brailsford rejected that notion. "They would build them as quickly as they could sell them," he said.
The city wouldn't let the company build the structure it wanted for its corporate image, said Griff Johnson, C&A land development specialist. Other cities are begging for the kind of clean industry Neways represents, he said.
Construction was initially planned for early summer following last spring's groundbreaking ceremonies. The steel for the structure will be delivered this week.
The project also raised the ire of Salem residents who opposed the tower and large residential development in the rural community.
"There's no hard feelings," Mower said. "We're just moving on."
E-mail: rodger@desnews.com