A warehouse the size of 10 football fields may become the second major tenant of the sometimes embattled Premier 370 Business Park in St. Peters.
The proposed 714,780-square-foot warehouse for RB, formerly known as Reckitt-Benckiser, is expected to generate about 300 new full-time jobs. The new warehouse also may generate about $14.2 million in property tax revenue between 2017 and 2031 – of which $7.77 million could be tax abated.
RB, a British company, makes air fresheners and cleaning products including such brands as Woolite, Resolve Stain Remover and Lysol. The company also is planning a separate six-story, 27,000-square-foot addition to its existing manufacturing plant in the city’s nearby Arrowhead Industrial Park.
The city’s Board of Aldermen approved issuing $31.5 million in industrial revenue bonds at their Jan. 21 meeting. Proceeds from the bonds’ sale will finance the warehouse construction, expected to be completed by the end of 2016. The bonds do not impose any taxes on residents, city officials say.
Mayor Len Pagano said “2016 definitely is a good year.”
The warehouse will be built on 48 acres of the 900-acre business park, which is located south of Interstate 370, just south of the city’s 370 Lakeside Park. The only other tenant, trucking company Dayton Freight, opened a 51,000-square-foot distribution center in 2011.
The new warehouse building will be at 2001 Premier Parkway South, the major road through the development, and east of Executive Parkway South. Duke Realty Corp., which owns much of the land in the park, will sublease the warehouse to RB and pass on tax abatements to the company.
Municipalities can issue industrial revenue bonds that don’t require voter approval in exchange for the benefited company promising to pay off the principal and interest on the bonds. St. Peters will be the legal owner of the property while the bonds are outstanding. City ownership is a requirement to allow some tax abatement from 2017 through 2031.
The city can offer tax abatements because political subdivisions are exempt from taxes. Duke Realty will have the option to purchase the building at the end of the agreement in 2031.
In this case, the company is expected to receive a partial tax abatement, making payments in lieu of taxes [PILOTS] annually to political subdivisions where the project is located. Sales taxes on construction materials also may be exempt.
City officials will tie the amount of tax abatements to the number of jobs the warehouse creates. By 2017, the warehouse must have at least 300 full-time jobs having a base pay of $10 an hour with all employees offered employer-supported health insurance in order for RB to receive a 75-percent abatement that year. That percentage continues to drop by 5 percent each year until it reaches 50 percent from 2022 until 2031.
The abatement also drops if fewer than 300, but more than 200, qualifying jobs are created.
“If fewer than 200 qualifying jobs are created, the company will receive no abatement,” the plan states.
The plan states that the St. Charles School District could receive $139,172.04 in PILOT payments in 2017 from RB. From 2017 to 2031, the school district is projected to receive slightly more than $4 million in PILOT payments, compared to $8.91 million without a tax abatement.
In all, 12 taxing jurisdictions could receive an estimated $6.43 million in PILOT payments between 2017 and 2031. That compares to those jurisdictions receiving an estimated $14.2 million in tax revenue during the same 15-year period without tax abatements, the plan states. The plan lists the value of the abatement from 2017 to 2031 at as much as $7.77 million.
But St. Peters officials say forms of tax abatement are part of doing business in attracting tenants to a development. Assistant City Administrator Tim Wilkinson said two other locations were offering RB a 100-percent tax abatement if they located there. The fact that RB has a plant nearby was an inducement for the business park location.
Tax abatements and the location of nearby related facilities are often required to attract businesses in a global economy, Wilkinson said.
“The reality is that a European company like RB is looking at a map with pins at possible locations and will go where abatements are available,” Wilkinson said.