County officials are expecting a ripple effect from the BNSF freight facility under construction in Edgerton.
Already, there’s been an uptick in the number of companies inquiring into the financial incentives the county might be willing to give in exchange for development near the $250 million rail-to-truck freight yard, says Lee Metcalfe, executive director of the New Century AirCenter.
To that end, the county is tweaking its 18-year-old program regarding tax abatements for unincorporated areas in and around the air center, which is south of the freight yard.
On Thursday, the Johnson County Commission will consider a new policy that Metcalfe thinks will be specific enough to keep the airport in the running for development. It also will look at a proposal to continue the county’s current policy of not granting tax abatements for unincorporated areas outside the air center.
The giant BNSF intermodal facility, with an adjoining $500 million warehouse, is expected to create 7,000 jobs directly when it opens in the latter part of next year. The yard is south of the air center and close enough that county officials want to be prepared for the inquiries about more development, Metcalfe said.
The freight center was first announced in 2005, but was slowed because of the economic downturn of 2008.
The county has offered tax abatements on a case-by-case basis for the past 36 years with only a few vague criteria for what would be considered, Metcalfe said. In 1994, the board adopted a program from its economic development department for its template, but has not written a policy of its own. The proposed new policy would give developers a clearer idea of what type of project might qualify for abatements, but does not guarantee their approval, Metcalfe said.
For instance, the proposed policy would set a minimum investment of $2 million for consideration of abatement. It also says the county would take the availability of roads and sewers into consideration and that projects be “clean, non-polluting and not require extensive environmental controls.”
The proposal also sets the terms for the tax breaks. In the plan, a capital investment of $2 million to 5 million could get up to a three-year abatement, $5 million to 10 million up to a five-year abatement and over $10 million, up to a seven-year term. No project except one for aviation purposes only would be allowed to get more than half off what it would have been taxed during the abatement period.
The county commission has always frowned upon tax breaks for development in the unincorporated areas outside the air center because it does not want to compete with the cities. In fact, the proposal says no abatements will be given for relocations within the county unless the business is in danger of being lured out of the county.
“For as long as I’m there the first answer will be, ‘We don’t do tax abatements,’ ” Metcalfe told the commission.