Focus Area: Economy
Staff Contact: Jamie Robichaud / John Page
Subject: Report on a request by Blue Springs Safety Storage South, LLC and assigns for an issuance request for industrial revenue bonds and tax phase-in for a master resolution over a business park. The project will entail the construction of 1,549,955 square feet of warehouse and industrial facilities on a total of 139-acres located on the east side of 169 Highway between 159th and 167th Streets.
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Report on a request by Blue Springs Safety Storage South, LLC and assigns for an issuance request for industrial revenue bonds and tax phase-in for a master resolution over a business park. The project will entail the construction of 1,549,955 square feet of warehouse and industrial facilities on a total of 139-acres located on the east side of 169 Highway between 159th and 167th Streets.
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Summary:
The City has received a master resolution application for $252,865,701 in industrial revenue bonds for the construction of 1,549,955 square feet total of industrial and warehouse facilities in a business park setting. The project is located on 139-acres on the east side of 169 Highway between 159th & 167th Streets. 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.
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 under the City’s tax abatement policy (Policy F-5, Resolution 23-1080).
The total request for the multi-series of bonds under the master resolution should not exceed $252,865,701 in industrial revenue bonds for the construction of 1,549,955 square feet of commercial space on 139-acres of land. The master resolution request of industrial revenue bonds for all of the projects consists of:
o $4,616,488 to acquire land
o $186,941,723 to construct the buildings
o $21,788,624 for furniture, fixtures & equipment
o $39,518,866 to cover other development costs including site work and soft costs
• The total project will create 1,033 new jobs over the next 10 years.
o Average salaries of the new jobs:
§ $44,000 in year one, growing to $57,410 in year ten (as these buildings are speculative, these average salaries are estimates)
o A total of approximately $59 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 this project if built all at once:
o All jurisdictions = $1,768,400 annually / $17,684,000 10-year total
o Olathe = $352,968 annually / $3,529,680 10-year total
o Olathe’s current annual property tax revenue from the property is $708.
o Upon retirement of the tax phase-in, the City will receive approximately a total of $705,935 in annual property tax revenue once the property tax phase-in expires.
The cost-benefit ratio of this project is below.
• City of Olathe
o 1.47
o Payback expected to take 6 years.
• Johnson County
o 2.20
o Payback expected to take 5 years.
• Olathe School District
o 1.01
o Payback expected to take 10 years.
• Spring Hill School District
o 1.01
o Payback expected to take 10 years.
• Johnson County Community College
o 1.30
o Payback expected to take 8 years.
• State of Kansas
o 91.77
o Payback expected to occur during construction.
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Financial Impact:
See attached materials for more detailed fiscal impact information.
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Action Needed:
Accept report. A public hearing and resolution regarding the project will go before the City Council at its September 3rd meeting.
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Attachment(s):
A. Executive Summary
B. Application
C. Firm Data Sheet
D. Project Cost Benefit Analysis
E. Site Plan
F. Site Aerial
G. IRB Historical Cost Benefit Ratios