Focus Area: Economy
Staff Contact: Jaime Robichaud/John Page
Subject: Public Hearing and consideration to amend Resolution No. 21-1055 to increase the aggregate amount of the industrial revenue bonds issued by the City in an amount not to exceed $73,100,000 to 175 Commerce Center One, LLC for construction of a 1,123,470 square foot industrial building located at the northwest corner of 175th Street and Hedge Lane.
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TITLE:
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Public Hearing and consideration to amend Resolution No. 21-1055 to increase the aggregate amount of the industrial revenue bonds issued by the City in an amount not to exceed $73,100,000 to 175 Commerce Center One, LLC for construction of a 1,123,470 square foot industrial building located at the northwest corner of 175th Street and Hedge Lane.
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Summary:
The City has received a request to increase the industrial revenue bond amount for a previously approved Tax Phase-In project under a master resolution of intent from BT 175 Phase I and BT Future Phase, LLC. The original application requested an approximate 10 year / 50% property tax abatement for $65,000,000. Due to costs increase the applicant is requesting the amount be increased to $73,100,000.
A new cost benefit analysis has been run with the increase amount request with the following job, wages and cost benefit to the community highlighted below. This project will be generating new jobs and wages for the community and the cost benefit report illustrates that this project exceeds the targeted cost benefit ratio.
• The project request of $73,100,000 in industrial revenue bonds will cover;
o $6,000,000 to acquire land
o $57,100,000 to construct the building and other costs
o $10,000,000 to cover furniture, fixtures, and equipment
• The project creates 534 new jobs over the next 10 years.
• Average salaries of new jobs in the first year: $44,278
o $30,850,000 approximately in new annual wages in year 10
o $237,590,000 approximately in total new wages over the next 10 years
• Property taxes over the 10-year period with 50% property tax phase-in is estimated to be:
o All jurisdictions = $669,378 annually / $6,693,775 10-year total
o Olathe = $134,420 annually / $1,344,200 10-year total
o Olathe’s current annual property tax revenue from the property is $365
o Upon retirement of the tax phase in, the City will receive approximately a total of $268,840 in annual property tax revenue
• Overall the project has a positive fiscal/economic impact on the community with a cost benefit ratio of 1.93 with an expected payback of 3 years.
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Financial Impact:
See attached materials for more detailed fiscal impact information.
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Action Needed:
Two votes are needed:
1) Make a motion and vote to close the public hearing
2) Make a motion and vote to consider approval of Resolution No. 23-1064
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Attachment(s):
A: Executive Summary
B: Application and Firm Data Sheet
C: Letter Requesting Increase
D: Project Cost Benefit Analysis
E: Site Aerial
F: IRB Historical Cost Benefit Ratios
G: Resolution No. 23-1064