Focus Area: Economy
Staff Contact: Jamie Robichaud / Kathryn Messer
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Report on a request by DRG Holdings LLC and assigns for an issuance request for a master resolution for industrial revenue bonds and tax phase-in for the construction of approximately 558,960 square feet of warehouse and industrial facilities on a total of 37.63-acres located on the SWC of 167th & Lone Elm Road.
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recommended motion:
Accept Report. A resolution regarding the project will go before the City Council at its May 19th meeting.
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Summary:
The City has received a master resolution and a first series application for industrial revenue bonds for the construction of industrial and warehouse facilities in a business park setting. The master resolution $39,918,000 in industrial revenue bonds for the construction of a approximately two warehouse buildings comprising approximately 558,960 square feet on 37.63 acres This will be a multi-series of bonds to be issued to cover land, the building and furniture, fixtures and equipment costs for each series project. This development is located on the SWC of 167th Street and Lone Elm Road.
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 first series of bonder under this master resolution has requested bonds not to exceed $18,095,932 for a 251,160 square foot facility on a 17.55-acre parcel. The single series request of industrial revenue bonds consist of:
o $2,369,225 to acquire land
o $15,726,707 to construct the building
• The project will create 186 new jobs over the next 10 years
o Average salaries of the new jobs:
§ $48,000 in year one, growing to $74,464 in year ten
o A total of approximately $107 million in new wages in year 10 of the abatement
• Property taxes over the 10-year period with estimated 80% property tax phase-in on the project:
o All jurisdictions = $63,660 annually / $636,600 10-year total (excluding the 8 mills for schools that are exempt)
o Olathe = $12,843 annually / $128,430 10-year total
o Olathe’s current annual property tax revenue from the property is $0.
o Upon retirement of the tax phase-in, the City will receive approximately a total of $64,215 in annual property tax revenue once the property tax phase-in expires.
The cost-benefit ratio of this project for the City is 1.22 with payback expected to take approximately 8 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. Resolution No. 26-XXXX