Focus Area: Economy
Staff Contact: Jamie Robichaud / Kathryn Messer
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Report on a request by DRG Holdings LLC and assigns for a request for the issuance of industrial revenue bonds and tax phase-in for a single series issuance for an industrial warehouse facility. The project will entail the construction of a 251,160 sq ft of warehouse and industrial space on a 17.55- acre parcel at the southwest corner of 167th Street & Lone Elm Road.
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recommended motion:
Accept report. A public hearing and resolution regarding the project will go before the City Council at its May 19th meeting.
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Summary:
The City has received an application for $18,095,932 in industrial revenue bonds for the construction of a 251,160 square foot industrial /warehouse facility. The project is located on 17.55-acres at the southwest corner of 167th & Lone Elm Road. This will be a single-series of bonds to be issued to cover land and the building.
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 under the City’s tax abatement policy (Policy F-5, Resolution 25-1099). Additionally, this project lies in the newly established zone allowing for increased abatement percentages.
This project has requested bonds not to exceed $18,095,932 for a 251,160 square foot facility on a 17.55-acre parcel. The single series request of industrial revenue bonds consist of:
o $2,369,225 to acquire land
o $15,726,707 to construct the building
• The project will create 186 new jobs over the next 10 years
o Average salaries of the new jobs:
§ $48,000 in year one, growing to $74,464 in year ten
o A total of approximately $107 million in new wages in year 10 of the abatement
• Property taxes over the 10-year period with estimated 80% property tax phase-in on the project:
o All jurisdictions = $63,660 annually / $636,600 10-year total (excluding the 8 mills for schools that are exempt)
o Olathe = $12,843 annually / $128,430 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 $64,215 in annual property tax revenue once the property tax phase-in expires.
The cost-benefit ratio of this project for the City is 1.22 with payback expected to take approximately 8 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. Resolution No. 26-XXXX