Ark Valley News - Kechi gives OK to $800K in bonds for new business

Kechi gives OK to $800K in bonds for new business
By David Dinell
Last Updated: July 29, 2015

A proposal for the City of Kechi to issue $800,000 in industrial revenue bonds for a new business was approved by the city council July 23.

J.Y. Klaus of the firm of Triplett, Woolf & Garretson LLC and the city's bond counsel presented a detailed cost-benefit analysis of what it would mean for the city to issue the bonds.

While it would cost the city some tax revenue in the beginning of the 10-year notes, in the long run, Kechi should realize a benefit of $221,031 by having the company in town, he said.

There was little disagreement with the bond issue, which was first introduced at the June 25 meeting, and after the analysis and a few questions, the deal was sealed.

The bonds will be used to make a new home for NorthStar Comfort Services Inc., now at Kellogg and 127th Street East. It is moving from that site due to a highway expansion project.

The business will have 12,000 square feet of warehouse space and 2,300 square feet of offices on a 2-acre site east of Snowbird on the east side of Kechi near K-254 and Woodlawn.

The city will gain about 18 to 20 employees with the move.

Jim Boone, owner of the business, said after the meeting that he was pleased with the vote and will waste no time in getting the project underway.

"We hope to be making progress soon," he said.

Klaus' briefing helped him understand the workings of the bonds better, Boone said.

"I had some of the same questions they (the council) did," he said.

Council members and the mayor said they appreciated the briefing.

"It cleared my mind up quite a bit about this," said Mayor Ed Parker. Added council member Brian Adams: "I can see the benefit for Kechi."

He questioned Klaus about the Wichita school district's role in the IRB, and Klaus said it actually comes out on the short end of the deal because its funding is heavily based on property taxes.

City Administrator Bob Conger said the vote was an ideal one for the two major parties.

"It's a good deal for the city and for Mr. Boone," he said.

In other action, the council:

•Approved vacating the north eight feet of a 20-foot street right-of-way along 220 feet of East Kechi Road for The Broadwalk development. The ruling was necessary for the development, officials say, as one of the planned buildings would be on city property if the waiver wasn't granted. The development is being planned by Paul and Virginia Riemann under the business name of Hornet Enterprises and consists of three buildings. The couple plans to have a restaurant and art stores in the development. The lot had been the site of several small antique shops, but they have not been open for many years and the property had fallen into disrepair. Council members had no issue with granting the request and have indicted that they are glad that improvements are planned at the site.

•Set the next council meeting as the public hearing for the city's 2016 budget. Those wishing to comment on the fiscal blueprint may do so at that time. The budget is $3.4 million, an increase of $113,016, or 3 percent, from 2015's expenditures of $3.2 million. Although the mill levy is flat, ad valorem taxes levied increase by $2,965 due to a slight increase in the 2015 estimated assessed valuation. The final document must be sent to the county clerk by Aug. 25.

•Listened to Chamber of Commerce president Betty Washington report that there will be a grand-opening ribbon-cuttitng ceremony at 9 a.m. Aug. 1 at Junk in the Trunk on Kechi Road.