Focus Area: Economy
Staff Contact: Chet Belcher, Kate Messer
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title:
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Report on a request by Scannell Properties, LLC and assigns for a request for the issuance of industrial revenue bonds and tax phase-in for a one-or-more series issuance for an industrial facility for $80,465,680. The project will entail the construction of a 1,006,880 sq ft industrial facility on a 70.49-acre site approximately located at the northwest corner of Highway 169 & 175th Street.
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recommended motion:
Accept report. A public hearing and resolution regarding the project will go before the City Council at its November 17 meeting.
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Summary:
The City has received an application for $80,465,680 in industrial revenue bonds for the construction of a 1,006,880 square foot industrial facility on a 70.49-acre site. The project is approximately located at the northwest corner of Highway 169 and 175th Street. This will be a one-or-more series of bonds to be issued to cover land, the building, furniture, fixtures and equipment and other development costs.
The Applicant seeks a single-series resolution for this project and requests to receive an approximate 10-year, 80% property tax phase-in in conjunction with the issuance of the City’s industrial revenue bonds. This project is applying for and falls under the City’s tax abatement policy for an existing businesses, Resolution 25-1099 and Policy F-5 with an investment of over $5 million. Additionally, this project lies in the newly established zone allowing for increased abatement percentages.
The series request of industrial revenue bonds consist of:
• $5,065,680 to acquire the land
• $75,400,000 to construct the building
The project will create 711 new jobs over the next 10 years. Average salaries of the new jobs:
• $48,000 in the first year, growing to $74,464 in year 10
The jobs would create a total of approximately $419 million in new wages to the Olathe economy over the life of the abatement.
Property taxes over the 10-year period with estimated 80% property tax phase-in on the project:
• All jurisdictions = $347,000 annually / $3,470,000 10-year total (excluding the 8 mills for schools that is exempt)
• Olathe = $70,000 annually / $700,000 10-year total
• Olathe’s current annual property tax revenue from the property is $0
• Upon retirement of the tax phase-in, the City will receive approximately a total of $350,000 in annual property tax revenue once the property tax phase-in expires.
The cost-benefit ratio of this project for the city is 0.90 with payback expected to take just over 10 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: Application
C: Firm Data Sheet
D: Project Cost Benefit Analysis
E: Site Aerial
F: Resolution No. 26-XXXX