Market Insight: City of Wichita Economic Development Policy and Incentives
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In 2017, the City of Wichita adopted a Speculative Industrial Building Program. The Spec Industrial Program provides an incentive to provide large industrial/warehouse space needed in Wichita for Economic Development recruitment.
Upon city council approval, eligible projects—see building requirements below—will receive sales tax exemption on all materials, as well as a 95% tax abatement for the first five years. The following five years 50% tax abatement will be granted contingent upon an occupancy rate of at least 50%.
The Center for Economic Development and Business Research (CEDBR) of Wichita State University will conduct a Cost/Benefit analysis on each project ensuring a ratio of benefits to cost of no less than 1.3:1 to guarantee the benefits to the city outweigh that of the tax abatement.
The project must have architectural plans, engineering plans, proof of funding, and proof of control of ground before the initial meeting with the City of Wichita Economic Development Office and the City of Wichita Bond Counsel. Upon approval from the Economic Development Office, the Cost/Benefit analysis will be conducted by the CEDBR.
- At least 100,000 square feet industrial warehouse
- At least 28 foot ceiling clearance
- Issuance of Industrial Revenue Bonds from the City of Wichita Bond Council
- Project to start within 120 days of city council approval
- Limit of 15 months to finish construction
- Located anywhere within the Wichita city limits
Steps to Abatement
- Create architectural plans, engineering plans, proof of funding, and proof of control of ground
- Meet with City of Wichita Economic Development Office and City of Wichita Bond Counsel to disclose plans
- Send project details, in form of a Firm Data Sheet, to CEDBR to conduct a cost/benefit analysis, with a requirement of a ratio minimum of 1.3:1 with city benefit exceeding the cost of abatements
- Set meeting with City Council where a presentation of the project summary, prepared by the Economic Development Office, as well as a Resolution, prepared by the Bond Council, will seek approval from the Mayor.
- Upon approval, the developer will be granted a sales tax exemption form
- Construction begins and ends within the city’s mandated timeline
- Bonds will be issued upon completion of the project as the developer is able to produce all receipts of costs resulting from materials and construction
- Tax abatements are granted for the following tax year post construction completion
- 95% tax abatement for years 1-5
- 50% tax abatement for years 6-10 contingent upon a minimum of 50% occupancy
- $5,000 application fee through Industrial Revenue Bonds
- $2,500 annual fee for maintenance of Industrial Revenue Bonds Accounts
- Cost/Benefit analysis charge of $771 to CEDBR of Wichita State University
- Minimum lease is 25,000 square feet of the 100,000 square foot speculative warehouse
- Maximum division of the warehouse is four tenants, each with a minimum of 25,000 square feet of the 100,000 square foot warehouse
- Annual reporting requirement to the City of Wichita Economic Development Office in terms of leasing status and occupancy
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