Corbin H. Crable
The city of Edgerton’s costs in preparing for the approval of the issuance of $500 million in industrial revenue bonds for the KC Logistics Park have been minimal, according to at least one official involved with the deal.
Scott Anderson, bond counsel from Kutak Rock LLC, said the city of Edgerton will pay Municipal Partners a total of $250 for the cost benefit analysis associated with the project. That $250 is a reimbursable expense for the city, he added.
“All (the firm) did was input the data into a program,” Anderson said. Edgerton City Administrator David Dillner said that fee has not yet been paid.
But those numbers have been disputed by more than one organization. At last week’s Edgerton City Council meeting, USD 231 Superintendent Bill Gilhaus said the analysis calculates financial impact based on a decadelong growth of 182 students in the school district, while USD 231’s own growth estimate is 458 students over the next 10 years. Patrick Robinson of the Allen Group also disputed Kutak Rock’s estimates of growth in the school district but did not elaborate.
Anderson, speaking with The Gardner News on July 13, said Kutak Rock is paid for its services off the cost of the issuance of the bonds, and that the company is paid based on what it calls ‘basis points,’ which represent one one-hundredth of a percent of the total of the IRBs being issued. Anderson said Kutak Rock will be paid for roughly 10 basis points, which comes out to be $50,000.
“The fees for the city’s bond counsel is paid by the borrower,” Anderson explained. “The borrower will have their own fees as well. They have to pay for all of those fees for the city as part of the process.”
Anderson said that in addition, bond counsel will charge the IRB’s borrower for Kutak Rock’s contract negotiations on the project.
“Anytime there’s a property tax abatement, we’re paid according to a fee schedule,” he said. “Our fee is always paid by the borrower, not the city. That’s how it works with tax abatement financing in every Johnson County city.”
Anderson said that for a project of this size, those fees will total an estimated $40,000.
“For a typical warehouse distribution facility, it’s $40,000,” he said. “But that includes preparing the bond documents and getting it through the Court of Tax Appeals. That fee is paid by the borrower. The city’s not out that money.”
Planning Commission OKs rezoning land for distribution center
Edgerton City Administrator David Dillner announced on the Edgerton Insights blog on Wednesday that the Edgerton Planning Commission has recommended to the city council approval to rezone 16 acres of land south of U.S. 56 to Business Park District.
Pending the council’s approval, the land eventually will be home to a 312,000-square-foot warehouse/distribution facility for Leawood, Kan.-based Demdaco, a company that specializes in figurines and collectibles.
The Planning Commission made the approval with several stipulations, including the inclusion of a photometric lighting plan for the building and installation of additional landscaping in lieu of a required 30-foot setback.
The council will review the rezoning issue for discussion and approval during a special meeting at 7 p.m. Thursday, July 29, at the Community Center, 404 E. Nelson St.
Kutak Rock official explains IRB benefits to city
Corbin H. Crable