Focus Area: Economy
Staff Contact: Jamie Robichaud / Kaili Stowers
Subject: Public Hearing and consideration of Resolution No. 24-1069 on a request by 3rd Street Real Estate LLC (Third St Social) and assigns for an issuance request for industrial revenue bonds and tax phase-in resolution for a single series project. The project will entail the redevelopment of an existing 11,500 sf commercial building at 139 S. Kanas Avenue.
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Public Hearing and consideration of Resolution No. 24-1069 on a request by 3rd Street Real Estate LLC (Third St Social) and assigns for an issuance request for industrial revenue bonds and tax phase-in resolution for a single series project. The project will entail the redevelopment of an existing 11,500 sf commercial building at 139 S. Kanas Avenue.
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Summary:
The City has received an application for $ 6,500,000 in industrial revenue bonds for the purchase and construction of 11,500 square feet of space at 139 S. Kansas Avenue. This project will bring redevelopment and a coveted restaurant to Downtown Olathe.
This will be a single-series of bonds which will be issued to cover the building, furniture, fixtures and equipment and associated development costs for the project.
The Applicant requests a 10-year / 100% 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 single-series of bonds under the resolution should not exceed $6,500,000 in industrial revenue bonds for the redevelopment and construction of 11,500 total square feet in a facility located on .36-acres of land. The resolution request of industrial revenue bonds for the project consists of:
• $5,500,000 for redevelopment of the building and furniture, fixtures and equipment
• $1,000,000 in other development costs
• The project will create 89 new jobs over the next 10 years.
• Average hourly pay:
§ $47,040 in year one growing to $56,217 in year 10
• The City of Olathe will be forgoing property taxes over the 10-year period however the increase in sales tax revenue will help to offset the expected property tax loss over the life of the abatement.
• The cost-benefit ratio of this project is below.
• City of Olathe
§ 1.75
§ Payback expected to take 5 years.
• Johnson County
§ 2.55
§ Payback expected to take 4 years.
• Olathe School District
§ 0.00
§ Payback expected to take more than 10 years.
• Johnson County Community College
§ 0.70
§ Payback expected to take more than 10 years.
• State of Kansas
§ 275.88
§ 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:
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. 24-1069
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Attachment(s):
A. Executive Summary
B. Application
C. Firm Data Sheet
D. Project Cost Benefit Analysis
E. Site Aerial
F. IRB Historical Cost Benefit Ratios
G. Resolution No. 24-1069