Focus Area: Economy
Staff Contact: Jamie Robichaud / John Page
Subject: Report on a request by PDC STL/INDY LPIV, LLC and assigns for a master resolution for industrial revenue bonds and tax phase-in for the construction of an approximately 2,828,059 square foot warehouse and flex office business park at the northeast corner of west 175th Street and South Clare Road.
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Report on a request by PDC STL/INDY LPIV, LLC and assigns for a master resolution for industrial revenue bonds and tax phase-in for the construction of an approximately 2,828,059 square foot warehouse and flex office business park at the northeast corner of west 175th Street and South Clare Road.
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Summary:
The City has received a master resolution application for $261,423,959 in industrial revenue bonds for the construction of 2,828,059 square feet total of industrial and warehouse facilities in a business park setting. The project is located on 186-acres in the northeast quadrant of 175th Street and Clare Road. 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 to exceed $261,423,959 in industrial revenue bonds for the construction of 2,828,059 square feet of commercial space on 186-acres of land. The master resolution request of industrial revenue bonds for all of the projects consist of:
• $39,590,400 to acquire land
• $89,633,999 to construct the buildings
• No funds are allocated for furniture, fixtures & equipment
• $132,199,560 to cover other development costs including site work and soft costs
• The total project will create 1,851 new jobs over the next 10 years.
• Average salaries of the new jobs:
§ $43,500 in year one, growing to $56,758 in year 10
• A total of approximately $105 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:
• All jurisdictions = $939,260 annually / $9,392,600 10-year total
• Olathe = $157,320 annually / $1,573,200 10-year total
• Olathe’s current annual property tax revenue from the property is $446.
• Upon retirement of the tax phase-in, the City will receive approximately a total of $314,640 in annual property tax revenue once the property tax phase-in expires.
The cost-benefit ratio of this project for each jurisdiction is as follows:
City of Olathe
• 1.98
• Payback expected to take 4 years
Johnson County
• 1.95
• Payback expected to take 5 years
State of Kansas
• 135.21
• Payback expect to be completed during construction period
Gardner-Edgerton School District
• 1.04
• Payback expected to take 10 years
Johnson County Community College
• 1.62
• Payback expected to take 6 years
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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 7th 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