Focus Area: Economy
Staff Contact: Jamie Robichaud / Kate Messer
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title:
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Report on a request by 167 Olathe 3, LLC and assigns for a request for the issuance of industrial revenue bonds and tax phase-in for a single series issuance for an office building for Faith Technologies. The project will entail the construction of a 76,800 sq ft office building on a 18.98-acre parcel at the northwest corner of 167th Street & Lone Elm Road.
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recommended motion:
Accept report. A public hearing and resolution regarding the project will go before the City Council at its June 2nd meeting.
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Summary:
The City has received an application for $38,883,742 in industrial revenue bonds for the construction of a 76,800 square foot office building for Faith Technologies on their campus at that location. The company currently occupies two industrial facilities totaling 938,000 sf. The project is located on 18.98-acres at the northwest corner of 167th & Lone Elm Road. This will be a single-series of bonds to be issued to cover land and the building.
The Applicant requests a 10-year / 80% property tax phase-in in conjunction with the issuance of the City’s industrial revenue bonds. This project is applying under the City’s tax abatement policy (Policy F-5, Resolution 25-1099). Additionally, this project lies in the newly established zone allowing for increased abatement percentages.
This project has requested bonds not to exceed $38,883,742 for the facility. The single series request of industrial revenue bonds consist of:
• $2,883,742 to acquire land
• $28,000,000 to construct the building
• $4,000,000 for furniture, fixtures and equipment
• $4,000,000 for other development costs
• The project will create 236 direct new jobs over the next 10 years
• Average starting salaries of the new jobs:
§ $56,000 in year one, growing to $60,00 in year ten
• A total of approximately $127.9 million in new wages during the 10 year abatement
• Property taxes over the 10-year period with estimated 80% property tax phase-in on the project:
• All jurisdictions = $113,000 annually / $1,130,000 10-year total (excluding the 8 mills for schools that are exempt)
• Olathe = $22,850 annually / $228,500 10-year total
• Olathe’s current annual property tax revenue from the property is $64.
• Upon retirement of the tax phase-in, the City will receive approximately a total of $114,250 in annual property tax revenue.
The cost-benefit ratio of this project for the City is 1.37 with payback expected to take approximately 7 years
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Financial Information:
See attached materials for more detailed fiscal impact information.
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Attachment(s):
A. Executive Summary
B. Applications
C. Firm Data Sheet
D. Project Cost Benefit Analysis
E. Site Aerial
F. Resolution No.26-XXXX