Department: Resource Management
Staff Contact: Dianna Wright/Emily Vincent
Subject: Report on a request by Milhaus Properties, LLC for issuance of industrial revenue bonds and tax phase in for the construction of a mixed-use/residential redevelopment project located at the southeast corner of Park Street and Chestnut..
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Item Description:
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Report on a request by Milhaus Properties, LLC for issuance of industrial revenue bonds and tax phase in for the construction of a mixed-use/residential redevelopment project located at the southeast corner of Park Street and Chestnut.. .
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Summary:
The City has received an application for approximately $36,606,795 in industrial revenue bonds for the construction of a Class A mixed-use commercial and multifamily residential project. The project will be located on four parcels totaling approximately 1.98-acres in downtown Olathe at the southeast corner of Park Street and Chestnut. Bonds will be issued to cover land and the buildings. No furniture, fixtures and equipment costs are included in this request.
• Construct two buildings (apartments and commercial uses) on 1.98+/- acres of land.
• The Applicant requests a 10-year, 100% property tax phase-in in conjunction with the issuance of the City’s industrial revenue bonds. This project falls under the City’s tax abatement policy (Policy F-5), and a development agreement with the City to acquire the land.
• Single series of bonds for the project.
o 228 total apartment units and space for commercial uses in two five story buildings.
• Requests amount not to exceed $36,606,795 of industrial revenue bonds total:
o $10 to acquire land
o $36,606,785 to construct the buildings and other costs
o No funds are allocated for furniture, fixtures & equipment
• Creates 5 new jobs over the next 10 years (at this time only jobs for the apartment complex are accounted for in this analysis). It is likely that additional jobs will be realized through the commercial space in the project.
o Average salaries:
Year one = $34,167
Year ten = $43,314
o $216,570 approximately in new annual wages in year 10
o $2,010,000 approximately in new wages combined over the next 10 years
• Current property taxes at this site (entire parcel in calculations) (all jurisdictions): $0. As this is currently a city-owned parcel no tax revenue is being collected from this parcel.
• Total full value property taxes to be collected on the project after the 10-year / 100% property tax phase-in period ends considering an estimated appraised value of $27,455,000:
o All taxing jurisdictions = $878,949 annually
o Olathe = $149,212 annually
Olathe will realize approximately $149,212 in new annual tax revenue after the phase-in 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 resolution regarding the project will go before the City Council at its December 17th meeting.
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Attachment(s):
Attachment A: Application Attachment B: Executive Summary Attachment C: Firm Data Sheet Attachment D: Cost Benefit Analysis