Focus Area: Economy
Staff Contact: Jamie Robichaud / Kate Messer
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title:
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Report on a request by Mitchell Properties II, LLC and assigns for a request for the issuance of industrial revenue bonds and tax phase-in for a single series issuance for an industrial warehouse/office facility. The project will entail the construction of a 33,000 sq ft of industrial space on a 2.25-acre parcel at 15680 S Keeler Terrace.
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recommended motion:
Accept report. A public hearing and resolution regarding the project will go before the City Council at its May 5 meeting.
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Summary:
The City has received an application for $9,040,000 in industrial revenue bonds for the construction of a 33,000 square foot industrial office/warehouse facility. The project is located on 2.25-acres at 15680 S. Keeler Terrace and located near an existing facility for the applicant. The applicant currently employes 140 full-time employees in Olathe at its other facilities. This will be a single-series of bonds to be issued to cover land, the building and furniture, fixtures and equipment.
The Applicant requests a 10-year / 50% 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) based on existing business requirements of an investment of at least $5 million.
This project has requested bonds not to exceed $9,040,000 for a 33,00 square foot facility on a 2.25-acre parcel. The single series request of industrial revenue bonds consist of:
o $1,940,000 to acquire land
o $7,000,000 to construct the building
o $100,000 for furniture, fixtures and equipment
• The project will create 10 new jobs over the next 10 years
o Average salaries of the new jobs:
§ $50,000
o A total of approximately $2.75 million in new wages in year 10 of the abatement
• Property taxes over the 10-year period with estimated 50% property tax phase-in on the project:
o All jurisdictions = $46,799 annually / $467,990 10-year total (excluding the 8 mills for schools that are exempt)
o Olathe = $10,200 annually / $102,000 10-year total
o Olathe’s current annual property tax revenue from the property is $2,982.
o Upon retirement of the tax phase-in, the City will receive approximately a total of $20,417 in annual property tax revenue once the property tax phase-in expires.
The cost-benefit ratio of this project for the City is 1.47 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