An Australian animal health company that received startup funding from the city and county appears to have closed its Lawrence headquarters, raising the question of whether some of the money should be paid back.

The company, Integrated Animal Health, announced it would move its global headquarters to Lawrence in 2015. The City of Lawrence and Douglas County subsequently approved incentives for the company, including a $100,000 forgivable loan, subject to a three-year performance agreement. The city and county also agreed to subsidize the company’s rent in the Bioscience and Technology Business Center on the University Kansas campus for three years.

Assistant City Manager Diane Stoddard said that the company indicated it met performance requirements for the first two years, but the city believes the company stopped operating in late 2017. Stoddard said that would mean the company did not meet requirements for the loan in its third year, potentially allowing the city and county to claw back a third of the funding, or about $33,333.

Stoddard said that the company’s performance agreement is measured on a midyear basis, so it has until the end of May to show it met requirements, but that is not expected. Stoddard said that the city has a close working relationship with the BTBC and was notified late last year that there had not been a lot of activity at the company’s location and that one of the principals had left the company.

“We’ve been trying to get a formal response from the company, which we have not received at this point, about the status of things,” Stoddard said. “Our understanding is that they are no longer operating.”

Stoddard said the city would definitely look at all options as far as repayment to the city and county, which equally funded the $100,000 forgivable loan. Stoddard said the city stopped paying its share of the rent subsidy in October 2017, but had paid a total of about $33,000 toward the company’s rent up to that point.

The Kansas secretary of state’s website lists the company’s status as “delinquent,” and the company’s annual report was not filed for 2017 or the current year. The company appears to still be operating in Australia.

Blake Hawley, the former CEO of the company’s North and South American operations, told the Journal-World that he and members of the company’s local board resigned last year amid financial questions related to the company’s founder. Hawley said it is his understanding that the company will be formally shut down effective in June due to a failure to pay state and federal taxes.

The company, which worked with pharmaceuticals for animals, announced it would move its global headquarters to Lawrence in April 2015. At the time, plans were for the company to employ two to five people in the near term and to grow in future years to about 50 employees and a $4 million annual payroll.

City staff reported to the Lawrence City Commission this week that they understood that company was no longer operating, and noted that the city and county are currently reviewing options for the potential claw back of funding related to the third year of performance. The report states more information will be provided as options are determined.

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