By JACQUE FLANAGAN
Managing Editor
(WARRENSBURG, Mo., digitalBURG) – The Dollar Tree now has the means to pay for its new distribution center north of town in the form of some $110 million in bond financing from the city complemented by sales tax exemptions and property tax abatements.
Following a brief 20-minute public hearing Monday, the City Council approved a development plan that calls for issuing taxable industrial development revenue bonds. The city will own the property under the plan and Dollar Tree Distribution Inc., of Virginia, will make lease payments to the city to cover the principal, premium and interest on the bonds, according to the agreement. The bond financing will pay for building and equipping the distribution center.
The 1.1-million-square-foot distribution center will be located on 122 acres in the undeveloped Brady Commerce Park at the southeast corner of state Route 13 and Northeast 200 Road, which is north of the city limits. The city intends to annex the property after Dollar Tree occupies the facility, according to the development plan.
There are three areas that must be annexed – two lots next to the Cahill subdivision, a strip of U.S. 50 that the Missouri Department of Transportation must approve, and a section of the Brady Industrial Park.
No questions followed Monday’s public hearing. However, Johnson County Presiding Commissioner Bill Gable and Richard Lloyd, president of the Johnson County Economic Development Corporation, offered words of support for the project.
Dollar Tree will receive a 100 percent abatement for real and personal property taxes until 2022. The abatement is reduced to 75 percent from 2023 to 2027 and then 50 percent from 2028 to 2032. However, the company must make payments in lieu of taxes to the different taxing jurisdictions in the county and city starting in 2023, totaling more than $6.2 million, according to the agreement.
The project would have generated $24 million in tax revenue without the abatement, according to the cost-benefit analysis in the development agreement.
Dollar Tree will also receive a sales tax exemption for building materials and equipment purchased in Warrensburg and Johnson County. The estimated sales tax exemption for building materials is more than $1.2 million, and the estimated sales tax exemption for personal property is nearly $91,000 but these items would be purchased outside of Johnson County, according to the development plan.
Also, the company must spend $2.3 million on construction materials purchased in the city, $4.6 million in Johnson County, but outside the city, and $17.3 million in the state but outside Johnson County.
Incentives are broken down into three parts, based on jobs, wages and project investments. The city will use performance formulas to calculate any adjustments in the company’s payments in lieu of taxes.
The project is designed to create 375 new jobs that pay an average annual wage of $28,862.
Tracey Brantner, director of the Johnson County Economic Development Corporation, said the company must meet these benchmarks in return for the tax incentives or face increased payments.
“If they perform at 90 percent, then they only receive 90 percent of the benefits,” she said. “If they only perform at 20 percent, then they only get 20 percent, and if they don’t perform at all then they pay it all back.”
Gary Maxwell, a Dollar Tree representative, said construction is estimated to take one year starting this quarter, and the company hopes to be shipping and servicing stores by next June.
Also part of the development agreement is the city’s pledge to extend Veterans Road to the east, connect the property to the city’s sanitary sewer system and to the Missouri-American Water main. Johnson County officials are seeking a $390,000 grant to help make $815,000 in improvements to Northeast 200 Road. KCP&L would contribute $175,000 for moving or replacing utility poles, and the county would pay for the remaining $250,000 for the road improvement.
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Council approves $110 million financing plan for Dollar Tree
Written by Muleskinner Staff
May 9, 2017
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