Focus Area: Economy
Staff Contact: Jamie Robichaud/Kaili Stowers
Subject: Report on a request by Blue Springs Safety Storage South, LLC and assigns for an issuance for industrial revenue bonds and tax phase-in of a single series project. The project will entail the construction of a 62,000 square foot industrial facility located in the northeast corner of 159th St and US 169 Highway.
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Report on a request by Blue Springs Safety Storage South, LLC and assigns for an issuance for industrial revenue bonds and tax phase-in of a single series project. The project will entail the construction of a 62,000 square foot industrial facility located in the northeast corner of 159th St and US 169 Highway.
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Summary:
The City has received an IRB application for $21,475,000 in industrial revenue bonds for the construction of a 62,000 square foot industrial facility in the Park 169 Commerce Center development. The project is located on a 3.5-acre parcel near the southeast quadrant of 169 Highway and 159th Street. This will be a single-series of bonds to be issued to cover land, the building and other costs for the 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 24-1075).
The request for the single-series of bonds under the master resolution should not exceed $21,475,000 in industrial revenue bonds for the construction of a 62,000 square foot commercial building on a 3.5-acre parcel in the business park development. The single series request of industrial revenue bonds for the project consist of:
o $177,507 to acquire land
o $9,424,000 to construct the building
o $11,873,493 to cover development costs including site work and soft costs
• The total project will create 50 new jobs over the next 10 years.
o Average salaries of the new jobs:
§ $48,000 in year one, growing to $62,629 in year ten
o A total of approximately $25 million in new wages over the life of the abatement
• Property taxes over the 10-year period with estimated 50% property tax phase-in on this project:
o All jurisdictions = $102,881 annually / $1,028,815 10-year total
o Olathe = $21,416 annually / $214,165 10-year total
o Olathe’s current annual property tax revenue from the property is $14.
o Upon retirement of the tax phase-in, the City will receive approximately a total of $42,833 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 1.34
o Payback expected to take 7 years.
• Johnson County
o 2.01
o Payback expected to take 4 years.
• Olathe School District
o 1.01
o Payback expected to take 10 years.
• Johnson County Community College
o 1.21
o Payback expected to take 8 years.
• State of Kansas
o 80.49
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 May 6th meeting
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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-XXXX