Focus Area: Economy
Staff Contact: Jamie Robichaud, Kate Messer
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title:
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Report on a request by 167 Olathe 5, LLC (Building 2) and assigns for an issuance request for industrial revenue bonds and tax phase-in for a one or more series application under a master resolution. The project will entail the construction of a 500,000 square foot manufacturing facility on an approximately 40.23 acre lot located at the southwest corner of 167th Street and Lone Elm.
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recommended motion:
Accept report. A public hearing and resolution regarding the project will go before the City Council at its August 18th meeting.
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Summary:
The City has received an application for $80,261,620 in industrial revenue bonds for the construction of a 500,000 square foot manufacturing facility. The project is located on 40.23 acres at the southwest corner of 167th Street and Lone Elm. This will be a single-series of bonds to be issued to cover land, the building, furniture, fixtures and equipment and other development costs.
The Applicant requests a 10-year / 80% property tax phase-in in conjunction with the issuance of the City’s industrial revenue bonds. This project is applying and qualifies under the City’s tax abatement policy (Policy F-5) under a master resolution with requirements of an investment of at least $5 million. Additionally, this project lies in the newly established zone allowing for increased abatement percentages.
The series request of industrial revenue bonds consist of:
• $2,200,000 to acquire the land
• $3,173,520 for furniture, fixtures and equipment
• $74,888,100 to construct the building and other development costs
• The project will create 396 new jobs over the next 10 years
o Average salaries of the new jobs:
§ $56,000 in the first year, growing to $60,000 in year 10
o A total of approximately $23 million in new wages during the final year of abatement
• Property taxes over the 10-year period with estimated 80% property tax phase-in on the project:
o All jurisdictions = $243,600 annually / $2,436,000 10-year total (excluding the 8 mills for schools that are exempt)
o Olathe = $40,700 annually / $407,000 10-year total
o Olathe’s current annual property tax revenue from the property is $0
o Upon retirement of the tax phase-in, the City will receive approximately a total of $203,500 in annual property tax revenue once the property tax phase-in expires.
The cost-benefit ratio of this project for the City is 0.66 with payback expected to take approximately more than 10 years.
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Financial Information:
See attached materials for more detailed fiscal impact information
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Attachment(s):
A: Executive Summary
B: Application
C: Firm Data Sheet
D: Project Cost Benefit Analysis
E: Site Aerial
F: Resolution No. 26-XXXX