After a two year competitive process, Northern Tool & Equipment Company (NTE) has chosen Ankeny for their new 600,000 square foot, $75 million distribution center.  NTE will use this distribution center to serve their 100+ retail stores and online customers around the country. Ryan Cos. will construct and own the facility and lease to NTE for an initial lease term of 15 years. This facility will be on 66 acres in the Crosswinds Business Park, located along the north side of NE 54^th Avenue, between NE 29^th Street and Interstate 35. Construction is expected to begin in early 2019, with project completion expected in 2020. 

NTE has committed to creating 183 new jobs as part of this investment, with wages for 19 positions exceeding 120% of the area median laborshed wage of $30.32/hour, plus benefits.  The wages for the additional jobs will range from $16/hour to $24+/hour, plus benefits. The proposed development agreement includes claw-back provisions on all 183 jobs.

The development agreement also covers a potential expansion of the facility within five years.  If NTE expands by no less than 350,000 square feet within five years, creates an additional 75 new jobs, and extends their lease on the entire facility by no less than five years, additional incentives for this expansion will be provided as outlined in the proposed agreement. 

The proposed development agreement includes 60% TIF rebates over ten years for the initial 600,000 square foot facility and 183 new jobs.  The value of these incentives is approximately $3,306,000 on an assessed building value of approximately $28.8 million.  In addition, the project is expected to qualify for five-year sliding scale industrial property tax exemption.  Over the 10 year term incentives will be provided, NTE will pay approximately $5.6 million in new property taxes to all taxing entities.  After the ten year term of the agreement, estimated net new tax receipts to all taxing entities will be approximately $1.2 million annually.  These totals include taxes paid on the improvements to the site and the increased value of the land.

If NTE expands the facility within five years, the proposed development agreement includes 100% TIF rebates for five years on the expansion only.  The estimated value of these rebates is $1.14 million over the five year incentive period.  After the incentive periods for both phases have expired, the annual new tax revenue collected by all taxing entities is expected to exceed $1.8 million, of which the City’s portion is approx. 30%, currently.

To approve as presented.

The date of the public hearing was set by the Council at their December 3, 2018 meeting.

Action: Consider motion to adopt RESOLUTION approving a Development Agreement between the City of Ankeny and Northern Tool & Equipment Company, Inc., and Ryan Companies, US, Inc.