Special to The Gardner News
Edgerton council met on Feb. 23 and discussed a charter ordinance defining elections, financing for three new LPKC warehouse and distribution facilities, and an agreement with KDOT for improving the intersection at 199th and US 56. In addition, a new staff member, and the new president of ElevateEdgerton! were introduced and a new council member was sworn in.
Ron Conus was appointed to city council to replace Charlie Troutner, who resigned. The seat expires in November 2017.
Conus was vice-chair of the planning commission and has served on the commission for five years. His departure leaves a vacancy on the PC.
He was sworn in as council member and immediately seated to participate in his first council meeting.
Bob McVeigh was introduced as the latest full time staff member, filling the newly created position of Maintenance Technician II, Parks and Recreation.
Steve Hale was introduced as president of ElevateEdgerton!, and spoke briefly. It was also announced that the organization now has a basic website online at elevatedgerton.com.
Updating election dates
At the Feb. 9 meeting an ordinance that would update city code on elections to reflect new state law with exemptions was discussed and tabled. The ordinance stated that current elected office holders with terms expiring in April 2017 would be extended to January 2018. Those expiring in April 2019 would extend to January 2020. The terms of Roberts, and Cindy Crooks, council member, would be extended until January 2018.
At the Feb. 9 meeting, Don Roberts, mayor, questioned why the ordinance was necessary. Discussion suggested several amendments to the ordinance presented, and it was tabled.
The amended version was returned for council consideration, presented by Patrick Reavey, city attorney. He said the League of Kansas Municipalities and the election office both recommended the Charter Ordinance.
After discussion of the options, council approved Charter Ordinance No. 23 with a 4-1 vote. Roberts was the nay vote. Jody Brown was absent.
New developments at LPKC
Council considered two applications for industrial revenue bonds and property tax abatement from Midwest Gateway Venture, LLC. The developer wants to build two warehouse and distribution facilities at 32180 W. 191st Street. One would be an approximately 320,000 sq. ft. (A) and the other, 210,000 sq. ft. (B)
The two projects were considered separately, as Resolution No. 02-23-17A and Resolution No. 02-23-17B.
Resolution No. 02-23-17A would express the city’s intent to issue industrial revenue bonds in the approximate principal amount of $25,300,000 to finance the 320,000 sq. ft. warehouse.
Resolution No. 02-23-17B would express the city’s intent to issue industrial revenue bonds in the approximate principal amount of $18,300,000 to finance the 210,000 sq. ft warehouse.
Both include a 10 year tax abatement with negotiated payment in lieu of tax (PILOT) payments throughout the abatement term. At $0.21 per sq.ft., the PILOT payment for the larger warehouse would be $67,200 and the other would be $44,100.
The developer also agrees to pay a pay a $0.41 per sq. ft. origination fee.
Jeff White, of Columbia Capital Management LLC, reviewed a cost-benefit report for the proposed projects.
The 37.5 acres, as farmland, generate $1,557 in annual property tax revenue. The two new warehouse facilities would generate $111,300 in annual PILOT payments.
USD #231 was notified of the development and responded by letter. As in the past, the district objects to the PILOT rate, which it says is too low.
USD #231 will receive about 45 percent of the total revenue generated by PILOT payments.
According to White, Edgerton is actually less aggressive with incentives than some competing areas. Some jurisdictions offer lower PILOT payments and longer abatement periods. One of several mentioned was PortKC, just across the state line on the former Richards Gebaur airfield, that offered a 40 year 100 percent abatement.
Roberts said that Edgerton is competing with major cities for these economic developments and is doing impressively well. Roberts named Indianapolis, Chicago, Memphis and Dallas as competing cities. The intermodal helps Edgertion win development deals, but doesn’t eliminate the necessity of incentives.
The consensus of discussion was that these developments would not be here at all, if the incentives weren’t offered.
“We know that those projects wouldn’t come here without the incentive – they would go someplace else. That is evident by the fact that they didn’t just materially pop up out of the ground in the decade prior to the intermodal being constructed,” said White.
USD #231 also continues to request to separately negotiate for an additional contribution to capitol outlay with developers. This has been discussed previously, and council has been advised this would be illegal.
Scott Anderson, bond counsel, said Kansas statutes were very clear, allowing only three things – negotiation of PILOT payments, origination fee payments and reimbursements of actual costs.
“I’ve never seen, on any tax abatement deal in Kansas, a negotiation with another taxing jurisdiction, for basically, in effect, a side payment. I’ve never seen it and I would never give an opinion that it’s legal,” said Anderson.
This would be the first LPKC spec warehouse project by a developer other than North Point. Anderson said that he had spoken to North Point, and they support the project.
Reviewing all LPKC development, White said tax abatements for the first three LPKC projects will expire in 2024, one more rolls off in 2025, three more in 2026 and six more in 2027.
“We’re seeing increased revenues today, and when that time comes, we’ll see increased revenue again,” said Roberts.
Council approved both resolutions for the Midwest Gateway projects with 4-0 votes.
The last step in the process will be an ordinance authorizing the city to execute legal and financial documents and agreements necessary for bond issuance. That will be presented for consideration at a future meeting.
Another LPKC project on the agenda tonight was at the ordinance approval stage. This project is for a 400,000 sq. ft. warehouse at 30700 W. 193rd Street, financed by $35,325,000 in bonds.
Resolution of Intent for this project was passed by council on Dec. 8, 2016.
Ordinance No. 1050 passed by 4-0 vote.