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Commission approves 10‑year tax abatement and $40,000 PILOT to support planned VA clinic in Junction City
Summary
Developers selected by the VA presented a plan for a 51,000 sq ft clinic at US‑77 and Rucker Road; after questions about precedent and financial risk commissioners approved a package of IRBs, a 10‑year property tax abatement with a $40,000/year pilot payment and a sales/use tax exemption tied to construction.
Developers with US Federal Properties and Guardian Development returned to the commission after winning a VA procurement and outlined plans for a 51,000‑square‑foot community outpatient clinic on an 11‑acre site at the northwest corner of US‑77 and Rucker Road. Jason Havoc of US Federal Properties told the commission, “we were selected for this project, back in early June,” and said the project will support primary care, mental health and other specialty services and is expected to create roughly 80 jobs.
Guardian’s representative, Steve Vanderhiy, explained the developers have entered a 20‑year lease with the VA and requested an industrial revenue bond (IRB) package that would support a 10‑year property tax abatement, a sales and use tax exemption on construction materials and a $40,000 per‑year payment in lieu of taxes (PILOT). Commissioners probed the terms, the earlier incentive precedent on a different city property, and what the city would forego if it granted an abatement. Staff confirmed the property is currently a tax‑exempt church and generates $0 in property tax revenue today; the proposal would produce a net positive over time compared with no project.
Several commissioners voiced strong support for the clinic’s veteran‑care and economic benefits. One commissioner summarized the stakes by saying the project could keep more veterans’ spending local and create nearby follow‑on development. After extended discussion and a request for additional documentation about previously offered incentive packages, the commission voted to approve the IRB package and the $40,000 PILOT in a motion that passed by voice vote.
Staff said IRB issuance and final legal documents will follow the city’s bond counsel review and formal IRB procedures; no tax changes occur until the IRB issuance process completes.
