Council considers tax abatement for BKD project

Council considered a set of industrial development bonds for the project that would have Kansas City developer Opus Northwest build a 100,000-square-foot, four-story office building in the parking lot of University Plaza, where BKD would be the main tenant. (See SBJ’s cover story this week on the project.)

The $21.5 million in bonds would be issued under Chapter 100 of the Missouri Revised Statutes. While the city would own the property, Opus would buy the bonds and the city would have no actual liability, according to Mary Lilly Smith, the city’s economic development director.

“The city would take control of the property and the development and lease the property back to Opus, and … the property will be exempt from property taxes,” Smith told council. “Opus will be responsible for paying the principal and interest on those bonds.”

If approved, Opus would receive 100 percent property tax abatement on the land improvements for the first 10 years and 50 percent abatement for the next 15 years; the 50 percent would become 75 percent if the project achieves Leadership in Energy and Environmental Design Silver certification.

Even with the abatements, Smith said the property would generate $2.2 million in payments in lieu of taxes over 25 years with LEED Silver certification and $4.4 million without the certification. If the property were not developed, it would generate only $37,000 in property taxes over the same period.

Council is expected to vote on the proposal at its July 28 meeting.

See SBJ’s July 21 issue for more Springfield City Council news. [[In-content Ad]]