(CD 8) Authorize Execution of a Five-Year Tax Abatement Agreement with K5 Holdings Group, LLC for the Rehabilitation and Addition of Approximately 28,750 Square Feet of Storage to an Industrial Building for Manufacturing and Warehouse Use, Having a Cost of at Least $9,140,000.00 on Property Located at 2000 E. Richmond Avenue in the United Communities Association Area and within Neighborhood Empowerment Zone Area Six and Neighborhood Empowerment Reinvestment Zone No. 6R

Summary

This item authorizes a five-year tax abatement agreement with K5 Holdings Group, LLC for a significant expansion and rehabilitation project at 2000 E. Richmond Avenue. The project involves adding approximately 28,750 square feet of storage to an existing industrial building, intended for manufacturing and warehouse use. The estimated cost of this project is at least $9,140,000.00. The property is located within the United Communities Association area, Neighborhood Empowerment Zone Area Six (NEZ), and Neighborhood Empowerment Reinvestment Zone No. 6R. The tax abatement will be applied to the increased value of the improvements, freezing the assessed value for municipal property tax calculation for five years starting January 2028, based on the pre-improvement value of $2,950,000.00. The estimated municipal property tax abated over the five-year period is approximately $459,285.00.

Citizen Impact

This agreement will result in an estimated loss of $459,285.00 in property tax revenue for the city over five years. However, it is expected to support economic development through a substantial investment in an industrial facility, potentially leading to job creation and increased economic activity in the area.

Confidence

high