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Council authorizes city certification for Midstates' $25M equipment sales-tax exemption application
Summary
The council authorized staff to sign a Missouri Department of Economic Development application for Midstates Distributing's planned expansion, which adds equipment purchases of about $25 million and an estimated 90 new jobs; the measure was approved by motion 7-0.
Lee's Summit city staff and Midstates counsel told the council on July 13 that Midstates Distributing has accepted a formal offer from the Missouri Department of Economic Development (DED) for a sales and use tax exemption on approximately $25 million of non‑manufacturing equipment tied to an expansion of its existing distribution facility.
Kirk Peterson, counsel for Midstates, summarized the previously approved public-private partnership: the council had earlier approved a Chapter 100 package including property tax abatement and a construction materials sales-tax exemption; the DED offer, which the company accepted, covers a sales-tax exemption on a large tranche of equipment that will outfit the expanded facility. The expansion—roughly a 500,000-square-foot addition to the current site—was projected to create about 90 new jobs.
Council action: The council unanimously (7–0) approved a motion authorizing staff to certify the DED application, a required procedural step so DED can implement the sales-tax exemption. The measure does not change the original Chapter 100 approvals but enables state-level incentives the developer negotiated with DED.
Economic impact: Staff and Midstates estimated significant local economic benefits through construction employment, payroll and long-term jobs tied to increased distribution capacity; the company projected millions in state sales-tax savings and hundreds of thousands in local sales tax benefit foregone over the equipment exemption period, offset in city analysis by projected new tax receipts and job creation.
Next steps: With city certification complete, Midstates may implement the equipment purchases under the DED authorization, and staff will continue to monitor project milestones and incentives' compliance.
