Focus Area: Economy
Staff Contact: Jamie Robichaud / Kate Messer
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title:
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Report on a request by 175 Commerce Center Land, LLC and assigns for an issuance request for industrial revenue bonds and tax phase-in for a single series application under a master resolution. The project will entail the construction of 1,102,793 square foot industrial facility on an approximately 61.113 acre lot located at the northeast corner of 175th Street and Hedge Lane.
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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 16th meeting.
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Summary:
The City has received an application for $77,309,000 in industrial revenue bonds for the construction of a 1,102,793 square foot industrial use space. The project is located on 61-acres at the northeast corner of 175th Street & Hedge Lane. This will be a single-series of bonds to be issued to cover land, the building, furniture, fixtures and equipment and other development costs.
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 and qualifies under the City’s tax abatement policy (Policy F-5, Resolution 25-1099) under a master resolution with requirements of an investment of at least $5 million. Additionally, this project lies in the newly established zone allowing for increased abatement percentages.
This project has requested bonds not to exceed $77,309,000 for 1,102,793 square feet on 61-acre parcel. The single series request of industrial revenue bonds consist of:
o $6,122,000 to acquire land
o $61,187,000 to construct the building and other development costs
o $10,000,000 for furniture, fixtures and equipment
• The project will create 825 new jobs over the next 10 years
o Average salaries of the new jobs:
§ $48,000 in the first year, growing to $74,464 in year 10
o A total of approximately $61 million in new wages during the final year of the abatement
• Property taxes over the 10-year period with estimated 80% property tax phase-in on the project:
o All jurisdictions = $238,658 annually / $2,386,580 10-year total (excluding the 8 mills for schools that are exempt)
o Olathe = $52,500 annually / $525,000 10-year total
o Olathe’s current annual property tax revenue from the property is $227
o Upon retirement of the tax phase-in, the City will receive approximately a total of $262,500 in annual property tax revenue once the property tax phase-in expires.
The cost-benefit ratio of this project for the City is 1.06 with payback expected to take approximately 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