New Albany: Council approves tax abatement for spec buildings at business park

A Chicago-based development firm has a big project planned for the New Albany International Business Park, adding to the excitement of Intel’s decision to build a microchip-processing facility in the area.

LPC Midwest LLC will invest $109 million, including $24 million for land acquisition, to construct spec buildings totaling 1 million square feet in a phased development on 143 acres north of Jug Street and east of Beech Road.

Construction of Phase I, in the Oak Grove II section of the business park, is expected to begin in April and be completed by December 2023.

It is expected to employ 345 permanent employee positions at the project site, with a payroll of slightly more than $12.1 no later than Dec. 31, 2026.

The second phase of construction is expected to begin within six years, and the company is planning to obtain a certificate of occupancy by Dec. 31, 2029.

The second phase is expected to create 328 permanent jobs generating an annual payroll of roughly $11.5 million by the end of 2029.

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For the final phase, the company has agreed to complete or begin the remainder of the 1 million square feet of commercial warehouse space within eight full years and to obtain a certificate of occupancy by Dec. 31, 2031.

It will employ 190 positions and meet an annual payroll of nearly $6.7 million no later than Dec. 31, 2031.

In return for the commitment by LPC Midwest LLC, a division of Chicago-based Lincoln Property Co, New Albany City Council on March 1 voted 7-0 to approve a 100%, 15-year abatement on the buildings in return for a total of 863 permanent employees meeting an annual payroll of $30.2 million no later than Dec. 31, 2031.

Each abatement will kick in per completion of the individual phases, said Michael Loges, the city's economic-development manager.

Loges said the first phase includes a 400,000-squre-foot building, followed by additional construction, the size of each building unclear at this point.

The land is zoned for commercial development/general employment, Loges said.

“It could be six additional buildings; it could be significantly less than that; it could be two buildings; it could be three buildings,” he said. “It could be warehouse space; it could be manufacturing space. We don’t know.”

In the event the additional commercial warehouse space exceeds 1 million square feet, the project will support one full-time employee per every 1,158 and $30.24 of payroll per each square foot built at the site, he said.

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In the Oak Grove II section of the business park, the city deposits 30% of the income-tax withholdings collected at the new project site into the infrastructure fund, or about $1.08 million for Phase I only over the full term of the abatement, and 26% to the city of Columbus for the extension of water and sewer services in the area, or $943,410.

The city of New Albany and Johnstown-Monroe Local School District each is expected to receive $798,270 in new net income-tax revenue for the first phase of the development.

In addition, the Career and Technology Education Centers of Licking County, also known as C-TEC, is expected to receive about $401,625 in shared income-tax revenue over the same period for the first phase of the development.

Dennis Keesee: president of the New Albany-Plain Township Historical Society, said he wonders – with the Russian invasion of Ukraine, skyrocketing gas prices, labor and material shortages – how investors have the money to compete in the market.

The owner of Eagles Villa Pizza and Johnnies Villa Pizza in Johnstown said premium wages will make it more difficult for small businesses to find help.

The community and surrounding areas are expecting major growth, which could trickle down to the school districts, so perhaps the amount of tax incentives are too generous, Keesee said.

"As far as our community, I guess it's good as long as we don't give away everything and we lose our rural topography," he said.

gseman@thisweeknews.com

@ThisWeekGary

This article originally appeared on ThisWeek: New Albany: Council OKs abatement for spec buildings at business park