The St. Peters Board of Aldermen has voted to issue as much as $26.5 million in industrial revenue bonds to finance the costs of a proposed industrial development project that is expected to generate 125 “quality” full-time jobs.
The board voted 8-0 at its Dec. 21 meeting to approve issuing the bond that will finance the installation of manufacturing equipment at 55 Patmos Court between now and 2022. A 50,000-square-foot addition will be added to the existing facilities by December 2018.
The project is to benefit Seyer Industries, a company that assembles products for the aerospace and maritime industries. It supplies companies such as Boeing, Lockheed Martin, Northrop Grumman and Gulfstream Aerospace, and contracts directly with the U.S. Army, Air Force and Navy.
The expansion is expected to cost $6 million and the acquisition of project equipment is expected to cost $19.5 million, including freight costs and installation. In all, $26.5 million in bonds are being issued to cover contingencies.
The facility will be developed and built by Patmos Associates, which owns the property real estate company. Patmos will lease the project from the city, which will sublease the site and improvements to Seyer.
The company would make payments in lieu of taxes [PILOTS] to the 10 taxing jurisdictions, which include Central County Fire & Rescue, Fort Zumwalt School District, St. Charles Community College, the state of Missouri, St. Charles County Highway Department, St Charles City-County Library District, Development Disabilities Resource Board, St. Charles County Dispatch and Alarm and the city of St. Peters. Building materials may be exempt from sales tax.
Property taxes without the abatements would be $3.38 million. The PILOTS could amount to $2.49 million, meaning the abatement could reach $886,851. The payments depend on 125 “good jobs” being generated – jobs that average at least 35 hours a week and include health insurance.
The Fort Zumwalt School District, the largest property tax recipient affected, would receive $1.515 million in PILOTS. Tax revenue to the district for real and personal property would be $2.069 million without the abatement.
State law allows a municipality to issue the bonds. Seyer will make payments covering the principal and interest on the bonds. Municipalities act as a conduit for financing.
The city has been working for years to develop the more than 800-acre development at Route 370 near Interstate 70. Several projects, some using industrial revenue bonds, already are underway.
Last year, the board voted to approve $50 million in industrial revenue bonds for another project – a facility developed on 113 acres on the east side of Spencer Road and south side of Premier Parkway. That facility will be developed and built by Scannell Properties, an Indiana-based commercial real estate company. The city will lease the project to Scannell, which will sublease the project to FedEx.
The plan and city cost-benefit analysis for the project states that the city will provide a 10-year abatement of property taxes of up to $5.84 million involving 10 local taxing jurisdictions and the state of Missouri. For the bond financing, the analysis states that 53 full-time jobs and 237 part-time jobs will be generated at the FedEx site. The analysis cites other benefits to the city including anticipated growth in construction jobs during construction and workers contributing to the local economy.
The project also will “provide collateral benefits for local suppliers during the construction period” and an increase in businesses that support the project’s employees and operations. “These ancillary impacts were not measured for purposes of this plan,” the analysis states.
City officials say the FedEx facility would expand package distribution in the area.