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File #: G24-4335   
Type: Reports Status: Agenda Ready
File created: 4/18/2024 In control: City Council
On agenda: 5/7/2024 Final action:
Title: 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.
Staff Contact: Jamie Robichaud, John Page
Attachments: 1. A: Executive Summary, 2. B: Application, 3. C: Firm Data Sheet, 4. D: Project Cost Benefit Analysis, 5. E: Site Aerial, 6. F: IRB Historical Cost Benefit Ratios

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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TITLE:

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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 ten

                     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 21st 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