Staff recommends approval of the ordinance.

This ordinance approves the issuance of Chapter 100 Bonds for Phase 1 (Buildings A2 and A3) in the Eastgate Commerce Center development.  The buildings are located along Little Blue Parkway north of Necessary Road.  The Chapter 100 structure will result in tax abatement for the project starting in 2022 and continuing through 2043.  The transaction will also provide a sales tax exemption for construction materials purchased and incorporated into the Project.  This proposal is in conformance with the approved development agreement. 

In January 2022, Northpoint Development, LLC, submitted an application for incentives to the City for the EastGate Commerce Center project.  This application was considered by the Independence Economic Development and Incentives Commission at its meeting on March 23, 2022.  The EDIC, by unanimous vote, recommended approval of the application to City Council.  On May 2, 2022, the City Council approved the development agreement outlining the general terms and conditions under which Northpoint Development will undertake the Project and to set out the terms under which the City will provide Chapter 100 tax abatement and consider the establishment of a community improvement district for the reimbursement of certain public infrastructure costs to be incurred by the City and Northpoint in connection with the development project.  On August 15, 2022, the City Council approved the establishment of the Eastgate Commerce Center Community Improvement District. 

The City has received a Chapter 100 proposal from Northpoint for the first phase of the EastGate Project, consisting of the construction and improvement of two buildings totaling approximately 571,000 square feet to be located along Little Blue Parkway north of Necessary Road.  The Chapter 100 structure will result in tax abatement for the project starting in 2022 and continuing through 2043. 

In each of the abatement years, a payment in lieu of tax (PILOT) will be due on the Project in an amount calculated based on the square footage of the constructed buildings multiplied by a per-square-foot PILOT set out below.

For 2022, a payment in lieu of tax will be due in an amount estimated to equal the tax that would have been due on the affected land without the Project. In each construction year, a payment in lieu of tax will be calculated in the same manner as for the first abatement year, but pro-rated based on percentage of completion.

The transaction will also provide a sales tax exemption for construction materials purchased and incorporated into the Project. 

This Chapter 100 is in conformance with the approved development agreement.