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File #: G19-784   
Type: Reports Status: Agenda Ready
File created: 5/7/2019 In control: City Council
On agenda: 5/21/2019 Final action:
Title: Report on a request by JDC North Olathe Properties, LLC for a master resolution for a business park, and a first project under the master resolution for an industrial warehouse in the Olathe Commerce Park and for issuance of industrial revenue bonds and tax phase-in for the construction of a 21,400 sq. ft. industrial warehouse on approximately 6.5 acres at the southeast corner of Dennis Avenue and the future Pine Street
Staff Contact: Dianna Wright, Emily Vincent
Attachments: 1. Attachment A: Master Business Park Application, 2. Attachment B: Phase I Project Application, 3. Attachment C: Executive Summary, 4. Attachment D: Firm Data Sheet, 5. Attachment E: Cost Benefit Analysis

Department: Resource Management                     

Staff Contact: Dianna Wright/Emily Vincent

Subject: Report on a request by JDC North Olathe Properties, LLC for a master resolution for a business park, and a first project under the master resolution for an industrial warehouse in the Olathe Commerce Park and for issuance of industrial revenue bonds and tax phase-in for the construction of a 21,400 sq. ft. industrial warehouse on approximately 6.5 acres at the southeast corner of Dennis Avenue and the future Pine Street..

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Item Description:

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Report on a request by JDC North Olathe Properties, LLC for a master resolution for a business park, and a first project under the master resolution for an industrial warehouse in the Olathe Commerce Park and for issuance of industrial revenue bonds and tax phase-in for the construction of a 21,400 sq. ft. industrial warehouse on approximately 6.5 acres at the southeast corner of Dennis Avenue and the future Pine Street..

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Summary:

The City has received a master business park application for JDC North Olathe Properties, LLC with a total investment of approximately $41,681,920 on a total of 66+/- acres. The project is called the Olathe Commerce Park, and it is the development of 5 lots and 5 tracts to be used for industrial/warehouse/manufacturing.  Additionally, an application has been submitted under this master resolution for approximately $3,000,000 in industrial revenue bonds for the construction of 21,400 square feet of buildings for a facility on a 6.5 acre parcel located at Dennis Avenue and (future) Pine Street, west of the BNSF tracks. This is a single series of bonds to be issued to cover land and building costs. 

                     Construct 21,400 sq. ft. of space for a facility on a 6.5-acre parcel of land.

                     The Applicant seeks to have the project receive a 10-year, 50% property tax phase-in for industrial uses in conjunction with the issuance of the City’s industrial revenue bonds.  This project is applying for and falls under the City’s tax abatement policy for a master resolution abatement, Resolution 18-1111 and Policy F-5 with an investment over $10 million total for a master resolution for new businesses.

                     First and single series of bonds for this facility under the master resolution. 

o                     21,400 sq. ft. transportation terminal facility

                     Requests amount not to exceed approximately $3,000,000 of industrial revenue bonds:

o                     $567,000 to acquire land

o                     $2,433,000 to construct the building and other costs

o                     No funds are allocated for furniture, fixtures & equipment

                     Creates 160 new jobs over the next 10 years. 

o                     Average salaries:

Year one = $42,000

Year ten = $48,022

o                     $7,683,581 approximately in new annual wages in year 10

o                     $42,407,980 approximately in new wages combined over the next 10 years

                     Current property taxes at this site (entire 66-acre site used) (all jurisdictions): $3,618 ($117,850 appraised value for 2018 and $14,142 assessed value for 2018).  Olathe’s current tax revenue from the property - $345.

                     Total full value property taxes on the project over the 10-year phase-in period considering an estimated appraised value of $1,825,000 (building only portion of the project):

o                     All taxing jurisdictions = $583,767 10-year total / $58,376 annually

o                     Olathe = $111,352 10-year total / $11,135 annually

                     Property taxes over the 10-year phase-in period with 50% property tax phase-in on this project:

o                     All jurisdictions = $291,880 10-year total / $29,188 annually

o                     Olathe = $55,675 10-year total / $5,567 annually

    Olathe will realize approximately $11,135 in new annual tax revenue after abatement period expires

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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 the resolutions regarding the master business park and the phase I project will go before the City Council at the June 4th meeting.

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Attachment(s):

Attachment A:  Master Business Park Application    Attachment B:  Phase I Project Application        Attachment C:  Executive Summary      Attachment D:  Firm Data Sheet         Attachment E:  Cost Benefit Analysis