Lenexa last week agreed to issue industrial revenue bonds for a new business park in the southernmost corner of the city. City leaders are also forming a Special Benefit District in the project area to finance construction of Britton Street and related public improvements north of College Boulevard.
BK Properties LLC requested the issuance of $120 million in industrial revenue bonds to finance construction costs for a phased business park project consisting of about 1.4 million square feet of office/warehouse in multiple buildings on 148.5 acres at the northwest corner of College and Renner boulevards. With plans to make a total capital investment of $120 million, the developer also requested a 10-year fixed tax abatement for multiple buildings on the proposed business park project, known as Lenexa Logistics Centre North Phase II.
In a public hearing Nov. 5, Sean McLaughlin, legal staff member, said approval of the tax abatement request does not grant tax abatement for each building; those require separate public hearings and individual approval from the governing body.
McLaughlin noted that the tax abatement request is “substantially similar” to the one the city approved for Lenexa Logistics Centre East, south of 116th and Renner.
The city will proceed with the proposed tax abatement request by allowing a fixed payment in lieu of taxes (PILOT) agreement for each phase of the project. PILOT payments will result in a tax abatement of about 72%, provided the city approves each individual building project and the project as a whole moves forward on the agreed-upon schedule (a minimum of $40 million capital investment and within 48 months from now).
One Lenexa resident asked how long the project would take to complete. Mayor Michael Boehm said the developer may take about 10 years, but as a market-driven project, it could take longer if the market slows down.
McLaughlin noted that the tax abatement proposed for the project is higher than generally allowed by city policy, but city staff believes the higher amount is warranted because of development and tenant costs related to the project.
Lenexa has also established a special benefit district to finance construction of Britton Street and related public improvements north of College Boulevard. The maximum estimated cost for the Special Benefit District is about $5.7 million and also comprises of landscaping, stormwater and similar public improvements.
The Special Benefit District is for a period of 20 years, and the developer is responsible for construction costs for these improvements, according to city documents.
The Lenexa city council voted 6-0 to approve the issuance of industrial revenue bonds, tax abatement and establishment of a Special Benefit District. Councilmembers Joe Karlin and Tom Nolte were absent.