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Legislation #: 140861 Introduction Date: 10/9/2014
Type: Resolution Effective Date: none
Sponsor: COUNCILMEMBER SHARP AND COUNCILMEMBER TAYLOR
Title: Approving a policy for the application of real property tax abatement within an Enhanced Enterprise Zone.

Legislation History
DateMinutesDescription
10/9/2014 Filed by the Clerk's office
10/9/2014 Referred to Planning, Zoning & Economic Development Committee
10/15/2014 Immediate Adoption as a Committee Substitute
10/16/2014 Adopted as Substituted

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COMMITTEE SUBSTITUTE FOR RESOLUTION NO. 140861

 

Approving a policy for the application of real property tax abatement within an Enhanced Enterprise Zone.

 

WHEREAS, the City Council determined it proper and fitting to establish an Enhanced Enterprise Zone program to provide certain incentives for businesses to locate or expand in the designated zones; and

 

WHEREAS, the City Council previously established Enhanced Enterprise Zone 1, Enhanced Enterprise Zone 2, and Enhanced Enterprise Zone 3, designated the boundaries of the respective zones, and identified the following types of business as eligible for state and local incentives: construction; manufacturing; wholesale trade; transportation and warehousing; information; finance and insurance; professional & technical services; enterprise management; administrative, support, waste management & remediation services; arts, entertainment, and recreation; other services; real estate, rental and leasing; and health care and social assistance; and

WHEREAS, the City Council, by Resolution Nos. 071264, 071265 and 071266 authorized the Board of each Enhanced Enterprise Zone to offer certain tax incentives for speculative industrial or warehouse buildings; and

 

WHEREAS, the State of Missouri enacted the Missouri Works Program in August, 2013, to facilitate the creation of quality jobs by offering the retention of state withholding tax of the new jobs or state tax credits; and

 

WHEREAS, upon adoption of the Missouri Works Program, the Missouri legislature specifically recognized in Section 620.2020.13, RSMo, that no new benefits shall be authorized under the Enhanced Enterprise Zone tax credit program and that the Missouri Works Program will not limit or impair the ability of a governing authority to provide local tax abatement under the Enhanced Enterprise Zone program; and

 

WHEREAS, the Missouri Works Program requires that new jobs offer salaries above a stated percentage of the county average wage in order to qualify for incentives under this program; and

 

WHEREAS, Centerpoint Properties (“Centerpoint”) is the developer of the Centerpoint Intermodal Center – Kansas City Industrial Park (“Industrial Park”), located within Enhanced Enterprise Zone 2; and

 

WHEREAS, Centerpoint has invested over $27 million to develop a speculative warehouse building at the Industrial Park; and

 

WHEREAS, Centerpoint has invested in and is developing other, non-speculative buildings at the Industrial Park that will be seeking tax abatement; and

 

WHEREAS, Centerpoint has applied for real property tax abatement under the Enhanced Enterprise Zone program, and such application has raised questions regarding the application of tax abatement to a speculative facility; and

 

WHEREAS, the Boards of the Enhanced Enterprise Zones have proposed a policy to clarify the application of real property tax abatement to speculative industrial or warehouse facilities; and

 

WHEREAS, the City Council wants to promote the creation of quality jobs within an Enhanced Enterprise Zone and to attract and retain businesses within the designated zones; and

 

WHEREAS, the City Council has reviewed the proposed policy of the Enhanced Enterprise Zone Boards and wishes to clarify the application of real property tax abatement to both speculative industrial or warehouse buildings and to non-speculative, build-to-suit buildings; NOW, THEREFORE,

 

BE IT RESOLVED BY THE COUNCIL OF KANSAS CITY

 

Section 1. That the City Council hereby adopts the following policy regarding the application of real property tax abatement to speculative industrial or warehouse facilities:

 

(1)               Speculative Industrial or Warehouse Building. Means any newly constructed facility which is neither owner occupied nor built-to-suit, and which is eligible for and being marketed to one or more qualified business enterprises which are primarily of an industrial or warehouse character.

(2)               Initial Tax Abatement. Means a two year, 50% abatement of ad valorem tax on improvements consisting of a Speculative Industrial or Warehouse Building.

(3)               Longer Tax Abatement. Means 50% abatement of ad valorem tax on improvements consisting of a Speculative Industrial or Warehouse Building for the eight year period following the two year period described in subsection (2) above, provided that at the end of such two year period the Speculative Industrial or Warehouse Building is at least 20% occupied by an eligible business.

(4)               Eligible Business. Means a business occupying space within a Speculative Industrial or Warehouse Building and eligible for incentives under the Enhanced Enterprise Zone program pursuant to Section 135.950(9)(b), RSMo, as codified under Ordinance Nos. 051411, 051412, and 051413 of the City of Kansas City, Missouri. The determination of whether a business is eligible shall be limited solely to Chapter 135, as codified, and in no event will the determination of eligibility require a certification under the Missouri Works Program.

 

Section 2. That the City Council hereby states that all subsequent improvements to real property constructed in accordance with applicable City Codes and Ordinances, located within an Enhanced Enterprise Zone and eligible for incentives under the Enhanced Enterprise Zone program pursuant to Section 135.950(9)(b), RSMo, as codified under Ordinance Nos. 051411, 051412, and 051413 of the City of Kansas City, Missouri, shall become and remain exempt from assessment and payment of 50% of the ad valorem taxes of the City of Kansas City, Missouri for a period of ten (10) years upon application and approval. The determination of whether a business is eligible shall be limited solely to Chapter 135, as codified, and in no event will the determination of eligibility require a certification or receipt of tax credits under the Missouri Works Program.

 

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