The Wilder City Council voted to table a resolution to enter into a development agreement with Neyer Properties on Monday. The project in question is a light industrial complex, which Neyer would build and then lease out to businesses. The land is located on Gloria Terrell Drive and comprises roughly 27.5 acres.
Getting the project and the resolution to the council floor has been a long time coming, according to Mayor Robert Arnold.
“The Economic Development Committee has met several times — I’m not sure how many — to talk about this project,” he said.
Part of the resolution included an agreement between the city and Neyer, in which the city would issue industrial revenue bonds, or IRBs, to aid in construction of the project. IRBs are bonds issued by local governments as a means to attract businesses to their communities. Upon issuing the bonds, the City of Wilder would become an owning interest in the property, which would exempt Neyer from real estate tax, enabling more leniency in the company’s cash flow. Wilder would not take on any financial obligations. Similar agreements have been used on other development projects throughout Kentucky.
Representatives from Neyer Properties and a lawyer representing the company attended the meeting to give a presentation on the project and answer questions from the audience. Adam Rockel, a development project manager for Neyer, presented a PowerPoint slide show in which he described the project in detail.
The IRBs’ term would last 30 years. Rather than pay taxes, Neyer would agree to issue a payment in lieu of taxes, or PILOT, to the city based on the amount of payroll tax generated on the property. The amount of Neyer’s PILOT would decrease as the amount of payroll taxes collected increases—the more jobs, the lower Neyer’s PILOT. The arrangement is unusual in that Neyer has agreed to pay the equivalent of 100% real estate tax in the event no jobs are created. The agreement would not affect the city’s ability to collect tangible property taxes, utility fees and insurance fees.
|Occupational Tax Receipts||City PILOT Percentage||Targeted Wages|
|$0.00-$60,000||100%||Up to $2,666,667|
|$60,001-$70,000||80%||$2,666,712 to $3,111,112|
|$70,001-$80,000||60%||$3,111,156 to $3,555,556|
|$80,001-$90,000||40%||$3,555,560 to $4,000,000|
Reaching this proposed agreement required months of negotiations between Neyer and the city’s attorneys. As a result, council members only obtained documents relating to the agreement and the development late in the day on the Friday before Monday night’s meeting. Some council members did not think this was enough time for them to review the documents and make a decision.
“We just received them [the documents] late Friday,” said councilwoman Valerie Jones. “There were 55 pages that we are expected to try to read through and then make a decision tonight.”
In addition, both council members and Wilder residents in the audience had questions relating to the building site. The property was used a disposal site for fly ash, a waste product generated in coal-burning power plants. Terry Vance, Wilder’s City Administrator, and reps from Neyer assured council members and audience members that the ash did not pose an environmental hazard. In spite of this, extra construction measures and protocols would need to be followed to ensure ground stability.
In addition, a water main goes through the center of the property, which would need to be rerouted. Sewer lines and other water-related projects would also need to meet regulations and safety measures in the presence of the fly ash. Part of the PILOT agreement states that if Neyer bears the cost of water-related infrastructure projects, it could potentially reduce their PILOT, depending on how much money the company spends. The city is currently seeking grant funding to offset this expense.
“A lot has been cleared up,” councilwoman Sanday Decker said towards the end of the discussion. “But I’d still like to table this until the next meeting, so we can all go over it a little bit more extensively.”
The resolution will come up for a vote again at the next Council meeting on October 3.
Watch a full video of the meeting, including Neyer’s presentation, at Campbell Media’s website.