City Council to consider bond issues for Spirit AeroSystems, Wesley Medical Center
11/04/2013 7:45 PM
11/04/2013 7:45 PM
The Wichita City Council on Tuesday will consider industrial revenue bond issues for the growth of two of the city’s largest employers.
The council will be asked to approve $49 million in IRBs for the ongoing expansion and modernization of commercial plane manufacturing facilities at Spirit AeroSystems. It also will be asked to approve up to $35.5 million in IRBs for the renovation of women’s and children’s services at Wesley Medical Center.
Industrial revenue bonds are issued by a government – but carry no financial risk to taxpayers – to help a private company land financing for an industrial improvement, such as expansion or modernization. The debt securities are then sold to investors, with the goal of improving local employment and the economy.
Spirit plans to install new air-handling units, chillers, cranes, docks, doors, a new fabric structure building and a new fire pump house, along with other modifications. According to city documents, the improvements will enable Spirit to continue existing commercial part production programs, take advantage of new technology and compete for new aircraft parts business.
Spirit will purchase the bonds itself, city documents state, and the bonds will not be offered for public sale.
The Spirit issue qualifies for a 10-year property tax exemption, along with a sales tax exemption, according to city documents that do not estimate the actual amount of property taxes that will be abated in the first year.
Wesley’s plans include upgrades to its Women’s Hospital, also known as Building 3. Upgrades would be made to emergency power systems; medical air, oxygen and vacuum systems; infant protection systems; HVAC systems; plumbing; fire protection and alarm systems; nurse call and code blue systems; and Americans with Disabilities Act accessibility.
The hospital also is adding new exterior patios on floors three, four and five. Vacant space is being converted for private postpartum rooms, and an eight-bay well-baby holding nursery is being added, along with isolation rooms.
Through negotiations with the city, the hospital will receive an 87 percent tax abatement for an initial five-year term, with a five-year renewal possible after city review. The abated taxes, according to city documents, could be as much as $118,039 on real property improvements.
Wesley pledges to hire 45 new employees over three years at an average annual salary of $55,000.