EDGERTON, Kan. — Despite pushback from residents, the Edgerton City Council approved millions in industrial revenue bonds for the construction of a new warehouse in southern Johnson County.
Thursday, the Edgerton City Council unanimously approved allocating $52 million in industrial revenue bonds to ELHC LII LLC, a company affiliated with NorthPoint Development.
ELHC LII LLC was awarded the bonds in addition to a 10-year, 100% tax abatement to construct a 1,028,000 square foot industrial warehouse at 20500 Corliss Road.
“The property is exempt from property taxes for a 10-year term, ” Scott Anderson, Bond Attorney for the City of Edgerton, said.
ELHC LII, LLC will be required to make payments-in-lieu-of-taxes (PILOT) to the city, state and county throughout the abatement. Per terms of the agreement, the developer will pay $0.16 for every square foot of the proposed warehouse. Once the 10 year abatement expires, the developer will no longer issue PILOT funds, but will be responsible for paying 100% of assigned taxes.
Tyler Winkleman was one of several Edgerton residents that spoke during the public hearing Thursday night. He said using bonds to fund warehouse development isn’t a good use of taxpayer money.
“Nobody that I’ve talked to that lives in Edgerton wants anything to do with this project,” Winkleman said.
Per state law, the city must issue a cost-benefit analysis before granting a property tax abatement.
Columbia Capital Management prepared the cost-benefit report for the proposed project. In a letter to City Administrator Beth Linn, Jeff White of Columbia Capital Management outlined the cost-benefit report. A portion of that letter reads:
“In the preparation of this cost-benefit analysis, Columbia Capital has relied upon the information provided to it by [the] applicant and has not independently verified or validated these data. The City must draw its own conclusions as to the reliability of these data.”
Jeff White of Columbia Capital says the tax abatement does not apply to tax levies issued by local school districts. The developer will still be responsible for making contributions to the USD 231.
“Our analysis shows immediate positive impact and overall net present benefits to the city, the county and the Gardner-Edgerton schools,” White said. “The net benefit to the school district is more sizable than the county’s, largely because of its 8mill capital levy not being abated.”
During the public hearing James Oltman, President of Elevate Edgerton, spoke in favor of the proposed development.
“Even during the PILOT period, the City of Edgerton alone will receive 72 times the tax revenue than it would if the property were to sit undeveloped,” Oltman said.
NorthPoint recently received approval from the council to rezone several plots of land to build new warehouses in southern Johnson County.
Josie Stambaugh said city leadership is putting too much emphasis on incentives for industrial developers that she feels aren’t bringing enough benefit to the citizens of Edgerton.
“The city has entered one-sided deals with NorthPoint and it needs to stop. We are seeing NorthPoint, their private investors and companies like Amazon, Walmart and other huge corporations get tax abatements on our backs,” Stambaugh said.
“We want to see, as residents that are paying these taxes, community improvement and activities not warehouses and increased traffic.