07-27-09 Community and Economic Development Committee

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Bill No. 09-48 -Tax Abatement -Waggoner Farm Development, L.P. (Ontario Partners, L.P.) This is a petition filed by the Holladay Corporation fora 9 year real property tax abatement. The project is an evolutionary development of their Portage Prairie Waggoner Farm Development. Committee Chair Rouse asked Bob Mathia to give the staff report. He noted the proposed construction, estimated to cost $5,000,000, was for a $157,000 sq. ft. building. The building was to be leased to a company for uses yet to be determined. Bob further reported that while the petitioner has requested a nine year abatement the Community & Economic Development staff calculated the abatement should be 6 years. This was based on the Public Benefit Point System. Chairperson Rouse allowed the petitioner, in the person of Paul Phair, to make a presentation. Phair explained the proposed spec. bldg. was to mirror an earlier spec. bldg. built with a 9 year abatement now totally leased. The abatement previously enjoyed and now requested would allow Holladay to market to prospective occupants more competitively. Front end costs for both the developer and the occupant would be spread out. In answer to questions from both Timothy Rouse and Karen White, Phair said the fu119 years was necessary for a level competitive playing field. Six years would not work. He said it would be difficult to proceed with a six year abatement. Councilmember Varner commented that on a net lease the occupant would pay the lower abated taxes helping the start-up lessee. Opening the public comment portion Chairperson Rouse found none in support; but several ready to oppose the abatement. Chris Springer representing the Carpenter's Union said that over the last three years the Holladay Corp. has sub- contracted construction work to HRG, a company which does not pay union wages. Brad Murphy representing 850 carpenters echoed Springer's claims. Marti Wolfson said the usual criteria the Council uses to evaluate abatement requests did not apply here. Spec. projects, he said do not allow the Council any measurable benefits to consider. He called this abatement corporate welfare for the Holladay Corp. Chairperson Rouse allowing rebuttal gave Mr. Phair the chance to defend these claims. Phair said their developments typically use 70-90% union labor. Then he reiterated the 9 year abatement was necessary to compete along the toll road corridor. Chairperson Rouse reminded the Committee that the issue was not union vs. non-union, but was prevailing wage paid. Henry Davis then moved for sending the bill to Council with no recommendation. Karen White seconded and all supported save Steve Cooreman, one of the citizen members of the Community and Economic Development Committee.