Department: Resource Management
Staff Contact: Dianna Wright/Emily Vincent
Subject: Report on a request by Eymann Development Inc. (for tenants Smith & Boucher and Navitas Engineers) for issuance of industrial revenue bonds and tax phase in for the construction of an 18,250 sq. ft. office building on a 1.2+/- acre parcel located north of 103rd Street and west of Shadow Ridge Drive in the Cedar Creek office development. The applicant is applying under master resolution 99-1013.
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Item Description:
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Report on a request by Eymann Development Inc. (for tenants Smith & Boucher and Navitas Engineers) for issuance of industrial revenue bonds and tax phase in for the construction of an 18,250 sq. ft. office building on a 1.2+/- acre parcel located north of 103rd Street and west of Shadow Ridge Drive in the Cedar Creek office development. The applicant is applying under master resolution 99-1013. .
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Summary:
The City has received an application for approximately $4,266,000 in industrial revenue bonds for the construction of a 18,250 square foot office facility on 1.2+/- acres located north of 103rd Street and west of Shadow Ridge Drive in the Cedar Creek office development. This is a single series of bonds to be issued to cover building costs.
• Construct a 18,250 sq. ft. warehouse facility on a 1.2+\- acre parcel of land.
• The Applicant seeks to have the project receive approximately a 10-year, 55% 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 (master resolution) for a property tax phase-in, Policy F-5 and Resolution 18-1111 and under the Cedar Creek master resolution.
• Single series of bonds for this facility project under the application.
o One 18,250 sq. ft. office headquarters facility.
• Requests amount not to exceed $4,266,000 of industrial revenue bonds:
o $588,000 allocated to acquire land
o $3,678,000 to construct the building and other costs
o No funds are allocated for furniture, fixtures & equipment, but it is expected the tenant will make purchases subject to sales tax beyond the above figures
• Creates 40 new jobs over the next 10 years.
o Average salaries of new jobs:
Year one = $80,000
Year ten = $98,000
o $3,920,000 approximately in new annual wages in year 10
o $20,240,000 approximately in new wages combined over the next 10 years
• In addition to the new jobs, this project will retain 67 existing Olathe jobs with an annual average salary of $94,179.
• Current estimated property taxes at this site (all jurisdictions): $2.29 ($60 appraised value for 2019 and $18 assessed value for 2019). Olathe’s current tax revenue from the property is $0.45.
• Property taxes on the project over the 10-year phase in period considering an estimated appraised value of $2,758,500:
o All taxing jurisdictions = $882,620 10-year total / $88,262 annually
o Olathe = $168,310 10-year total / $16,831 annually
• Property taxes over the 10-year phase-in period with an estimated 55% property tax phase-in:
o All jurisdictions = $397,180 10-year total / $39,718 annually
o Olathe = $75,740 10-year total / $7,574 annually
Olathe will realize approximately $16,830 in new annual tax revenue after 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 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