Archive for Thursday, June 28, 2001

Mayor suggests different approach to economic development

June 28, 2001

Mayor Dave Anderson advocated a different approach to economic development during a De Soto City Council discussion of incentive packages offered to the city's newest industries.

Last Thursday's council agenda included a long-delayed ordinance and pilot agreement authorizing a 10-year, 50-percent tax abatement for Rehrig-Pacific Company. The council also unanimously approved an agreement with James Bond and B&P Land Company concerning property in southwest De Soto.

The agreement requires Bond, who owns the property south of Intervet Inc.'s future campus, to donate a 40-foot street right of way and 20-foot utility easement. The right of way and easement are needed to fulfill the city's obligation to Intervet to extend 91st Street west 292 feet to the campus.

The agreement guarantees any excise taxes Bond and the land company pay on the property will be used for future extensions of 91st Street. City engineer Mike Brungardt said excise taxes collected from the property would extend the road about 650 feet.

The agreement makes future development of the property more attractive by ensuring funds are available to extend the road, Anderson said. Future developers could decide to add to that pot and extend the road farther, he said.

Still, Councilman Tim Maniez said the agreement amounted to deal making because the excise tax was established as a revenue source for arterial street improvements throughout the city. But he noted the agreement was necessary because of the enhancement package the city negotiated with Intervet last year, which excludes the company from any future benefit districts established to extend the street.

Maniez's concerns caused Anderson to return to one of the themes of his recent campaign. If the city built infrastructure to future commercial and business sites with the understanding it would recoup the cost through fees, it could avoid the type of agreements that lured Intervet to De Soto.

"You build the road, run the waterline and the sewer line and then you charge the appropriate amount for curb cuts and hookups," he said. "That's how you get away from deals.

"You tell them (businesses) how much it's going to cost. You have your costs; you can't make deals."

He noted, for example, that Johnson County Water District No. 1 would have charged Intervet more than $100,000 to hook up the four-inch waterline that De Soto will install to the company's campus.

Councilman John Taylor noted past agreements left the city with a problem that resurfaced during the council's consideration of the Rehrig-Pacific tax abatement.

The city council approved a 50-percent abatement for the plastic pallet plant last year. The plant opened in January, but legal technicalities within the company delayed the council taking action on an ordinance that authorized the abatement.

During that time, the city sought a way to address a drainage problem that plagues homes in the Meadows subdivision near the railroad.

The city realized it wasn't fair to ask Rehrig-Pacific to correct problems that existed before the plant was built, Brungardt said. It was agreed the company would donate two acres of property adjacent to the rail spur to the city.

"If they deed it over to us, we can make drainage improvement that will help out the Meadows people," he said. "I think a couple of days in there with a dozer cleaning up the channel would do a world of good."

In the future, the city could use the area as a walking trail that connects to planned city and county trails, Brungardt said. Future improvement could include an earth berm that would provide some protection from flooding and buffer noise from the plant, he said.

The drainage situation indicates the city was too lax in past development agreements, Taylor said. This was true at the Meadows, where a former streambed was altered to make room for home sites, and upstream, he said.

The council approved the abatement and pilot agreement with the condition Rehrig-Pacific donates the land.

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