Focus Area: Economy
Staff Contact: Jamie Robichaud / John Page
Subject: Report on a request by BPG Olathe 1 LLC and assigns (Building B in Great Plains Commerce Center) for an issuance request for industrial revenue bonds and tax phase-in resolution for a single series project. The project will entail the construction of a 149,500 square foot light industrial facility on a parcel totaling 11.27-acres located at 15880 S. Theden.
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Report on a request by BPG Olathe 1 LLC and assigns (Building B in Great Plains Commerce Center) for an issuance request for industrial revenue bonds and tax phase-in resolution for a single series project. The project will entail the construction of a 149,500 square foot light industrial facility on a parcel totaling 11.27-acres located at 15880 S. Theden.
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Summary:
The City has received an existing business application for $16,250,000 in industrial revenue bonds for the construction of a 149,500 square foot light industrial and warehouse facility in the Great Plains Commerce Center development. The project is located on 11.27-acres at 15880 S. Theden. This will be a single-series of bonds will be issued to cover land, the building, furniture, fixtures and equipment and associated development costs for the 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 single-series of bonds under the resolution should not exceed $16,250,000 in industrial revenue bonds for the construction of a 149,500 square foot light industrial facility on 11.27-acres of land. The resolution request of industrial revenue bonds for all of the projects consist of:
o $833,933 to acquire land
o $10,300,000 to construct the buildings
o $1,200,000 for furniture, fixtures & equipment
o $3,916,007 to cover other development costs including site work and soft costs
• The project will create 100 new jobs over the next 10 years.
o Average salaries of the new jobs:
§ $38,000 in year one, growing to $49,581 in year ten
o A total of approximately $43.5 million in new wages over the 10-year abatement
• Property taxes over the 10-year period with estimated 50% property tax phase-in on this project:
o All jurisdictions = $97,900 annually / $979,000 10-year total
o Olathe = $19,500 annually / $195,000 10-year total
o Olathe’s current annual property tax revenue from the property is $37.
o Upon retirement of the tax phase-in, the City will receive approximately a total of $39,000 in annual property tax revenue once the property tax phase-in expires.
The cost-benefit ratio of this project:
• City of Olathe
o 1.62
o Payback expected to take approximately 5 years.
• Johnson County
o 2.79
o Payback expected to take approximately 3 years.
• State of Kansas
o 114.21
o Payback expected during construction period.
• Olathe USD 233
o 1.01
o Payback expected to take approximately 10 years.
• Johnson County Community College
o 1.64
o Payback expected to take approximately 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 July 16 meeting
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Attachment(s):
A. Executive Summary
B. Application
C. Firm Data Sheet
D. Project Cost Benefit Analysis
E. Site Plan - Building B
F: Site Aerial
G: IRB Historical Cost Benefit Ratios
H: Resolution No. 24-XXXX