Focus Area: Economy
Staff Contact: Briana Burrichter / John Page
Subject: Public Hearing and Consideration of Resolution No. 24-1010 requested by Scannell Properties #717, LLC and assigns for issuance of industrial revenue bonds and tax phase-in for the construction of a 729,120 square foot warehouse facility for General Mills Blue Buffalo brand on 57-acres located west of the northwest of 159th Street and Clare Road (Old 56 Highway).
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TITLE:
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Public Hearing and Consideration of Resolution No. 24-1010 requested by Scannell Properties #717, LLC and assigns for issuance of industrial revenue bonds and tax phase-in for the construction of a 729,120 square foot warehouse facility for General Mills Blue Buffalo brand on 57-acres located west of the northwest of 159th Street and Clare Road (Old 56 Highway).
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Summary:
The City has received an application for $71,594,289 in industrial revenue bonds for the construction of a 729,120 square foot industrial warehouse facility. The project is located on 57-acres near the northwest corner 159th Street and Clare Road (Old 56 Highway). This is a single series of bonds to be issued to cover land, the building and furniture, fixtures and equipment costs.
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 single series of bonds for the project requests an amount not to exceed $71,594,289 in industrial revenue bonds for the construction of 729,120 square feet of commercial space on 57-acres of land. The single series of industrial revenue bonds consist of:
o $6,000,000 to acquire land
o $65,336,390 to construct the building and cover other development costs
o $257,899 allocated for furniture, fixtures & equipment
" The single-phase project creates 103 new jobs over the next 10 years
o Average salaries of the new jobs:
§ $51,159 in year one, growing to $64,227 in year ten
o A total of approximately $51,649,000 in new wages over the 10 year period
" Property taxes over the 10-year period with estimated 50% property tax phase-in on this project:
o All jurisdictions = $635,500 annually / $6,355,000 10-year total
o Olathe = $127,000 annually / $1,270,000 10-year total
o Olathe’s current annual property tax revenue from the property is $11,181
o Upon retirement of the tax phase-in, the City will receive approximately a total of $254,000 in annual property tax revenue once the property tax phase-in expires.
The cost benefit ratios of this project:
" City of Olathe
o 1.54
o Payback expected to take 5 years
" Johnson County
o 1.61
o Payback expected to take 6 years
" State of Kansas
o 118.89
o Payback expected during construction period
" Gardner-Edgerton School District
o 1.00
o Payback expected to take 10 years
" Johnson County Community College
o 1.11
o Payback expected to take 9 years
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Financial Impact:
See attached materials for more detailed fiscal impact information.
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Action Needed:
Two votes are needed:
1) Make a motion and vote to close the public hearing
2) Make a motion and vote to consider approval of Resolution No. 24-1010
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Attachment(s):
A. Executive Summary
B. Application
C. Firm Data Sheet
D. Project Cost Benefit Analysis
E. Site Aerial
F. IRB Historical Cost Benefit Ratios
G. Resolution 24-1010