Department: Resource Management
Staff Contact: Dianna Wright/Emily Vincent
Subject: Consideration of Resolution No. 19-1040 expressing intent to issue industrial revenue bonds and tax phase-in on behalf of Carrier Services Plus, LLC under the Master Resolution for the phase I projects consisting of the construction of a 21,400 square foot industrial warehouse located at the southeast corner of Dennis Avenue and the future Pine Street.
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Item Description:
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Consideration of Resolution No. 19-1040 expressing intent to issue industrial revenue bonds and tax phase-in on behalf of Carrier Services Plus, LLC under the Master Resolution for the phase I projects consisting of the construction of a 21,400 square foot industrial warehouse located 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 materials attached to the Public Hearing for more detailed fiscal impact information.
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Action Needed:
Consider approval of Resolution No. 19-1040
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Attachment(s):
Attachment A: Resolution No. 19-1040