By passing two tax abatement resolutions at Monday’s city council meeting, councilmen paved the way for nearly 1,160 new jobs at the Lebanon Business Park. City council members voted unanimously to grant two tax abatements to work in conjunction with XPO Logistics, a third-party logistics company interested in the former Pearson Education building, 135 S. Mt. Zion Rd., Lebanon.
Vacant since early 2015, the building boasts just over a million square feet of space. According to Boone County Economic Development Corp. Executive Director Molly Whitehead, that amount of space has been difficult to market to potential businesses.
“It’s been almost three years that we could get a project this far down the road,” Whitehead told the city council. “It’s been hard to market this location, and the layout makes it a bit more difficult.”
Whitehead said a majority of businesses looking to locate in the county search for spaces under 50,000 square feet, and very few look for 500,000 square feet and above.
“The longer that facility stands vacant, the harder it will be to fill,” Whitehead said.
The two resolutions — a real property vacant building tax abatement and personal property tax abatement — provide XPO Logistics tax incentives to fill that space. The approximate value of those abatements is $1.3 million for the personal property abatement and $960,000 for the vacant building abatement. Both abatements will run over 10-year spans.
“I don’t see a downside to Lebanon to get that building up and running and have that many people added to workforce,” said City Councilman Mike Kincaid. “I think this is a good deal.”
The personal property abatement falls under a non-traditional category and breaks down with no payments in the first two years, a 75 percent abatement in years 3 and 4, a 50 percent abatement in years 5 and 6, a 25 percent abatement in years 7 and 8, and a 10 percent abatement in years 9 and 10.
Whitehead said the city would still collect real property taxes on the building if the abatement was approved for an estimated $8.6 million over 10 years.
XPO Logistics plans to spend over $30 million in a personal property investment to perform several upgrades to the facility. Whitehead described the company as “IT intense.”
Combined with the assessed $43,240,100 million value of the building, the purchase cost and personal property investment represent a significant venture.
Hiring is to begin by the end of 2017 and hit peak capacity in 2020-21. Whitehead said between 2,500 to 3,000 people work in the Lebanon Business Park, and the addition of another 1,160 jobs would be “sizeable.”
She said the jobs would pay above the Boone County average wage of just above $17 per hour, be highly competitive and appeal to potential employees. Employees will be able to expect health benefits, retirement packages, and paid time off.
Leslie Wagner, senior principal at Ginovus, said “it was a long time coming to get to this point” and “so many sites and places were considered.” Ginovus is an Indianapolis-based site-selection and economic development advisory services firm.