Johnson County approves $75 million IRB and 10‑year tax abatement for New Century cold‑storage project

Johnson County commissioners voted 6‑1 on Aug. 21 to adopt Resolution 092‑25, authorizing taxable industrial revenue bonds of up to $75,000,000 to finance the construction of an industrial facility at New Century and granting a 10‑year ad valorem tax abatement on the improvements, starting at $0.46 per square foot and increasing 2 percent annually.

The action followed public comment and extended board discussion about economic development incentives and their local fiscal impacts. The resolution includes a payments‑in‑lieu‑of‑tax (PILOT) or performance agreement that county counsel said was negotiated to represent roughly 25 percent of the facility’s full tax liability during the exemption period.

Why it matters: The bond and abatement will remove the new improvements from the normal tax rolls during the exemption period and replace traditional property tax payments with negotiated PILOT payments to multiple taxing jurisdictions. Supporters said the project will generate economic activity and revenue for the airport; opponents warned incentives reduce tax revenue available for local services such as fire protection.

Most important facts first: Commissioner Allen Brand moved to adopt the resolution; Commissioner Hanslick seconded. Outside bond counsel Kevin Wimpey of Gilmore Bell told the board that Kansas statute permits issuance of industrial revenue bonds and that, as negotiated when the county adopted a master resolution of intent in November 2023, the PILOT structure was intended to provide taxing jurisdictions about 25 percent of the full tax bill during the exemption period. Wimpey said the facility’s property previously had agricultural classification and paid no property tax; under the PILOT structure the taxing jurisdictions will receive a portion of what full tax would be when the appraiser determines full value.

Public comments were critical of the incentive. Ben Hobert, who identified himself as a resident of Westwood Hills, calculated that, by his estimate, the package represents a multimillion‑dollar tax subsidy compared with an uncompensated full tax bill and said, “This is a $3,000,000 tax subsidy to this entity, and they have a 2% cap per annum.” Charlotte O’Hara criticized the use of abatements for large companies and cited prior examples of vacant property after incentives were granted.

Board discussion and technical details: Commissioners debated the tradeoffs. Commissioner Allen Brand and others described the airport’s broader economic contribution, citing employment, operations, and federal support for airport infrastructure. Commissioner Ashcraft said he would not support the measure because of concerns about reduced revenue for fire districts and other taxing jurisdictions and the effect of incentives on the county’s revenue base. Commissioner Hanslick noted a 21‑page performance agreement was provided in the packet and said the agreement requires data collection from the tenant; Johnson County airport staff confirmed that Phase 1 construction requirements noted in the 2023 resolution of intent have been satisfied.

Bond counsel and staff explained further: Wimpey said the IRB tool removes the property from the tax rolls except for up to eight mills of capital outlay that go to the local school district, and the negotiated PILOT payments will be split pro rata among the taxing jurisdictions according to their mill levies each year. He also said an appraisal once the facility is completed and placed on the rolls will refine the exact dollar amounts; the board was told that when the county appraiser evaluates full value (typically effective Jan. 1), staff will be able to calculate the precise difference to each taxing district.

Formal action: The motion to adopt Resolution 092‑25 was made by Commissioner Allen Brand, seconded by Commissioner Hanslick. Roll call: Commissioner Fest — aye; Commissioner Myers — aye; Commissioner Brewer — aye; Commissioner Hanslick — aye; Commissioner Ashcraft — no; Commissioner Allen Brand — aye; Chairman Mike Kelly — aye. The motion carried 6 in favor, 1 against.

What the vote does not do: The agreement does not immediately put the improvements on the full tax rolls; it authorizes issuance of bonds and adoption of the negotiated PILOT/performance agreement and the 10‑year abatement period specified in the resolution. County legal counsel characterized the PILOT payments as intended to approximate 25 percent of full taxes during exemption, not as a full replacement of the tax base.

Next steps and timing: County counsel and airport staff said appraisal and annual reporting required by the performance agreement will determine precise payments to taxing jurisdictions; the board also retains remedies in the performance agreement if the project is not constructed or operated in material consistency with the project description.

Local reaction: Members of the public who spoke at the hearing and speakers during the meeting expressed concern that the incentives favor large developers over homeowners facing rising assessments. Supporters on the board emphasized job creation and long‑term economic activity tied to airport development. The board’s vote ends the immediate procedural step; implementation will proceed through the documents authorized by the resolution and through future appraisals and performance reporting.