Focus Area: Economy
Staff Contact: Jamie Robichaud/Kaili Stowers
Subject: Public Hearing and Consideration of Resolution No. 25-1027 on request by Cherry Santa Fe, LLC for $7,031,629 for issuance of industrial revenue bonds for the construction of a 10,859 sq ft multi-tenant restaurant/retail project at 114-126 N Cherry Street.
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title:
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Public Hearing and Consideration of Resolution No. 25-1027 on request by Cherry Santa Fe, LLC for $7,031,629 for issuance of industrial revenue bonds for the construction of a 10,859 sq ft multi-tenant restaurant/retail project at 114-126 N Cherry Street.
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Summary:
The City has received an application for $7,031,629 in industrial revenue bonds for the purchase and redevelopment of 10,859 square feet of space at 114-126 N. Cherry Street. The facility was formerly used as office and retail space. This project will bring redevelopment and a coveted sit-down dining restaurant with rooftop patio / outdoor space to Downtown Olathe. Additional restaurant and retail tenants are also planned.
This will be a single-series of bonds which will be issued to cover the building, remodeling, furniture, fixtures and equipment and other 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 24-1075).
The total request for the single-series of bonds under the resolution should not exceed $7,031,629 in industrial revenue bonds for the redevelopment of 10,859 total square feet in a facility located on .36-acres of land. The resolution request of industrial revenue bonds for the project consist of:
o $6,100 for the land/building
o $4,464,058 for redevelopment of the building
o $1,000,000 for furniture, fixtures and equipment
o $1,561,471 in other development costs
• The project will hire 174 new employees over the next 10 years.
o Average wages:
§ $50,000 in year one growing to $65,239
• 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. This facility was previously owned by the City of Olathe and was already property tax exempt.
The cost-benefit ratio of this project is below.
• City of Olathe
o 2.76
o Payback expected to take 4 years.
• Johnson County
o 4.35
o Payback expected to take 2 years.
• Olathe School District
o 0.00
o Payback expected to take more than 10 years.
• Johnson County Community College
o 1.23
o Payback expected to take 8 years.
• State of Kansas
o 512.80
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:
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. 25-1027
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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. 25-1027