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 4, LLC (Building 1) 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 500,000 square foot industrial facility on an approximately 37.63 acre lot located at the southwest corner of 167th Street and Lone Elm.
Body
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recommended motion:
Accept report. A public hearing and resolution regarding the project will go before the City Council as its August 18th meeting.
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Summary:
The City has received an application for $79,786,580 in industrial revenue bonds for the construction of a 500,000 square foot manufacturing facility. The project is located on 37.63 acres at the southwest corner of 167th Street and Lone Elm. This is a one or more 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:
• $2,000,000 to acquire the land
• $2,898,480 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 / $2,430,600 10-year total (excluding the 8 mills for schools that is 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 0.63 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