Developer plans to bring 3.5 million-square-foot industrial project to De Soto

Business

DE SOTO, Kan. — A recent annexation by the city of De Soto, Kansas, could lead to a new industrial development taking root in western Johnson County. 

In November, the De Soto City Council approved the annexation of roughly 367 acres of land near Edgerton Road and 103rd Street. The annexation also included 6,000 acres of land within the former Sunflower Army Ammunition Plant north of 127th Street.

Map of annexed land.

On Dec. 2, the De Soto City Council voted 3-1 to approve a memorandum of understanding (MOU) with Flint Development for the development of roughly 350 acres near Edgerton Road and 103rd Street. 

The MOU outlines the city’s intent to incentivize development on the property through a 10-year, 85% tax abatement. In return, the developer commits to fund upgrades to public streets, water and sewer infrastructure.

Map of proposed public improvements.

The proposed project would build-out roughly 3.5 million square feet of industrial development. 

Tax Incentives 

The city will issue Industrial Revenue Bonds (IRBs) for each building constructed and provide a 10-year tax abatement for each building. The developer will also receive a sales tax exemption on construction materials. 

During the 10-year period, the developer will be exempt from paying 100% of the real property taxes on the property. During the abatement, the developer will make payments-in-lieu of taxes (PILOT) based on the square footage of each building constructed. The developer will begin making PILOT payments in 2023. 

Table of PILOT payment scale for development.

Infrastructure investments  

The MOU outlines the need for roughly $6 million in street repair. The project would include the complete reconstruction of Edgerton Road from K-10 Highway to 103rd Street; as well as intersection improvements at 103rd and Edgerton and 103rd and Evening Star Road.

Improvements would be paid for by the creating a benefit district that includes only the proposed developed property.  

The property is currently served by Rural Water District #7. In the event that RWD #7 can’t provide service, the city would service the property. If the city were to take over water services, it would cost roughly $2.33 million to build new water main extensions to the property.

To ensure there is enough revenue generated by water usage in the development to pay for the improvements, the developer will enter into a “take-or-pay” agreement. The developer would purchase or pay for a minimum amount of water per month for a 20-year period based on the debt service payment. 

Take or pay agreement breakdown for water

Similar to the water main agreement, the city will enter into a “take-or-pay” agreement with the developer to fund sewer improvements. 

Take or pay agreement breakdown for sewer

The De Soto City Council will review and vote on a final development agreement prior to issuing any tax incentives. On Jan. 20, the city council will review a request to rezone the property from Johnson County Rural (RUR) to City Light Industrial (M1). 

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