Park City turns down request for tax incentives on Hayes Co. building
01/17/2014 8:34 AM
01/17/2014 8:34 AM
The Park City Council has turned down a request for tax breaks in a deal for the Hayes Co. warehouse.
Lou Robelli, owner of Air Capitol Delivery and Warehouse, had agreed to buy the 450,000-square-foot facility, which has office, manufacturing and warehouse space, at 77th Street North and I-135 from the Hayes Co.
He had asked the council for industrial revenue bonds to help in the acquisition.
Property taxes on the building, which was recently valued by Sedgwick County appraisers at $7 million, are $295,000 a year for all tax districts, including Park City, plus $24,000 a year in special assessments, said Park City City manager Jack Whitson.
The building has been on the tax rolls just one year because the city awarded the Hayes Co. a 10-year tax abatement when the building was built just over a decade ago.
Robelli told Park City that he would pay $110,000 a year in lieu of taxes, plus specials, said Whitson.
On Tuesday, the council unanimously rejected awarding the bonds because it felt that Robelli wasn’t adding enough value to the tax base to have the city waive taxes for 10 more years. IRBs are a form of investment by the city, Whitson said, with the expectation that after the decade is up, the building will become part of the tax base. The city had already waived taxes on the building, he said.
“At the end of the day, you hope that one day that if you will get to the end of the abatement, you will get the taxes,” Whitson said. “Awarding another set of IRBs kind of defeats that purpose.”
The council isn’t in a generous mood, Whitson said. The city spent hundreds of thousands of dollars on two subdivisons that haven’t developed as expected, leaving the city budget in the red last year. The city had to lay off seven people, and Park City’s budget for the current year already includes the taxes from the property.
The Hayes Co. building is the city’s most valuable property, he said, valued by the county at $17.7 million until it came back on the tax rolls last year.
Whitson said at the time Hayes Co. requested its IRBs, it promised that it would work its way up to 500 workers, and it did for a time, but business conditions changed drastically and much of its operation has moved to Dallas. Robelli would have more like 50 workers, Whitson said.
Will Hayes, president and CEO of the Hayes Co., said Thursday that he was aware of the council’s action, but said he regarded the deal as still active.
“We don’t see any impact,” he said.
Robelli couldn’t be reached for comment.