Members of the Gardner City Council would like to see a cost-benefit analysis before considering a 75 percent tax abatement and other incentives related to a potential distribution and warehouse development at 183rd Street and Gardner Road.
Zimmer Companies made the request for tax incentives, including an abatement and infrastructure upgrades, in a January letter to city administrator Cheryl Harrison-Lee.
The project, to be called International Business Park of Kansas City, or IBPKC, would include 1.1 million square-feet of development on approximately 80 acres.
By comparison, Midwest Commerce Center is a planned, 155-acre development capable of supporting more than 2.1 million square-feet of warehouse development in five buildings. MCC is home to the 1 million square-foot Coleman Warehouse, and the development received a 50 percent abatement.
The city’s current policy limits tax abatements to 50 percent, but Tracey Mann, vice president of industrial sales and leasing for Zimmer, said a 75 percent tax abatement is crucial to the success of the IBPKC project.
Council members discussed the proposal during a June 10 work session.
Under the proposal, the city would provide a 10-year, 75 percent tax abatement; agree to pave Waverly Road to heavy haul standards within the next two years; allow trucks of all sizes to access the north side of the property via parts of 191st Street, 183rd Street, and Gardner Road; reduce city fees including the street excise tax, public improvement inspection fee, and the park fee in lieu of dedication; and assist in funding the extension of utilities to the project.
“If we don’t have these things, we’re at a competitive disadvantage,” Mann told the council.
Mann told the council he anticipates the project will provide 450-500 jobs with $12-$15 million in payroll. With a 75 percent abatement, he said the project would pay between $18.4 million and $23 million in taxes over the course of 20 years. Of that, the city of Gardner would receive between $3.9 million and $5 million in tax revenues from the project in 20 years.
Mann listed a series of distribution projects approved in the last few years, including a 450,000 square-foot Home Depot warehouse in Topeka; the 400,000 square-foot Pac Sun warehouse in Olathe; and the 446,000 square-foot Kimberly-Clark warehouse in New Century; that he believes would be a match for IBPKC, if it were developed.
Heath Freeman, council member, said several of those projects were financed with 50 percent abatements.
“There seems to be a lot of development at the 50 percent-to-60 percent level. From my perspective, we really have to ask if 75 percent is really necessary,” Freeman said.
The proposed industrial development’s location is contiguous with Edgerton next to the BNSF intermodal project, and the requests mirror incentives Edgerton is offering. He did not say why the company requested annexation into Gardner rather than into Edgerton.
Council member Steve Shute, who attended the work session via telephone, said several of those cities have diverse tax bases and can afford to offer large abatements to developers.
“It’s beginning to strike me as ridiculous,” Shute said. “…We’re being told that a 75 percent tax abatement is the only way this is going to be accomplished – take it or leave it. I’m having a hard time with that.”
Todd Mendon, the chief operation office for Big Industrial and a representative of the IBPKC project, told the council there may be some room to negotiate.
“We’re not digging our heels in either,” Mendon said. “We’re open.”
Whatever the city decides, it will set a precedent, Freeman warned.
“It is a bigger issue than what you’re asking now,” he said.
Council members requested a cost-benefit analysis of the project from city staff, and Harrison-Lee said that may take up to two months.