In Olathe, philosophical discussions about the city’s use of economic development tools have continued as some city councilmembers express discomfort in giving incentives to projects that don’t offer high wages or have fallen short in their eyes in other ways. Last week, the Olathe City Council voted 5-2 to approve a resolution of intent to issue $23 million in industrial revenue bonds on a project in the Lone Elm Commerce Center. The resolution also outlines a proposed 10-year partial property tax abatement. Councilmembers Matt Schoonover and Dean Vakas cast the no votes, echoing past conversations on the matter. During the discussion last Tuesday, city staff once again pointed out that the application for the bonds is in line with the city’s existing standards. Those standards include a minimum private investment threshold of $10 million, as well as cost-benefit ratio requirements largely focused on how much property tax a development will ultimately generate. Still, Councilmember Schoonover questioned whether the proposed average starting wages of $38,000 per year for jobs at the Lone Elm project would be something people could live on in Olathe. He also questioned whether that projected average wage was even accurate. He raised concerns that some jobs at the facility could pay much lower than that as well. “Are these companies bringing jobs to the city that, quite frankly, will actually be a benefit to the city?” Schoonover said, noting that he’s been “struggling” with the issue. He also wondered what factors contributed to the cost-benefit ratio the city uses in determining if a project is worthy of incentives. John Page, Olathe’s financial strategy manager, said the chief consideration city staff uses in that calculation is property taxes. Currently, Olathe collects $55 in property taxes from the property where the speculative industrial building is being proposed. After the abatement rolls off, the city could collect around $76,000 a year in property tax revenues.
Source: Johnson County Post
