When the Lebanon Business Park opened in 1994, it was estimated that it could eventually bring in as much as 30 percent of the city's tax revenue. Twenty-two years later, the project has surpassed all expectations, generating 43.5 percent of the city's tax revenue, and climbing.
Kent Frandsen, a partner at Parr, Richey, Obremsky, Frandsen and Patterson who represents several business in the development, presented the numbers to the city council this week.
The parks’ growth and tax revenue have continued an upward trend even Frandsen didn’t think was possible.
“There was a time when we started this somebody said the park might pay 30 percent of all the property taxes in Lebanon, and I thought that would be remarkable,” he told the city council. “But we’re now at 43.5 percent, and we’re nowhere near done because abatements will continue to expire and taxes will continue to go up. The point of it is, the park is paying a significant share of the property tax burden of the City of Lebanon, and that helps keep property taxes lower for the rest of us who live here and pay taxes than they would be but for the park's presence.”
In 2012-13, the business park contributed 29.3 percent, or $4.8 million of Lebanon’s total property taxes ($15 million). In 2013-14, that rose to 37.7 percent, even as the city’s tax revenue increased by $658,606.
The trend continued for 2014-15, as Lebanon’s property taxes jumped to just more than $17 million and the park paid for 41 percent. With an all-time high of $17.7 million in Lebanon property tax revenue for 2015-16, the LBP contributed 43.5 percent, or $7.7 million.
Frandsen’s numbers were based on Boone County Auditor property tax records.
“These companies have contributed tens of millions of dollars to our economy,” said Boone County Economic Development Corp. Executive Director Molly Whitehead. “They employee 1,000s of people in our county and region everyday, and that’s an enormous asset in our community.”
Even more striking, 11 of the park’s 23 businesses are still under some sort of tax abatement. Frandsen said most, if not all, of the abatements on original buildings last 10 years and taxes usually increase by 10 percent each year until they reach 100 percent. The 11 businesses still under abatement are in various stages of abatement based on when they were built.
As each year passes the amount of tax contribution should continue to rise, but is dependent upon assessed value.
Based on the size of the property, and its relation to Boone County, Frandsen provided an impactful view of what the property provides to the city.
“The near 1,000 acres of the business park represents less than four-tenths of one percent of the land in Boone County, which is about 255,000 acres,” Frandsen said. “That 1,000 acres contributes 8.8 percent of all the property taxes collected in Boone County. The reason is commercial and industrial taxpayers are taxed more heavily than residential or agricultural land.”
Businesses granted abatements must file each year with the state to ensure they are fulfilling their obligations as represented to their respective councils at the time the abatement was granted.
City councilman Jeremy Lamar questioned Frandsen on Maplehurst Bakery, in its first year of abatement status, as the company said it would hire nearly 200 people.
Frandsen said the company now employs approximately 100 people.
“The plant is still growing, and it takes a while to get up to speed,” Frandsen said. “They’re still hiring, but have only been in operation for less than a year.”
Criticism from some when the business park opened suggested once abatements ran out some businesses would leave and the park would fail. While some businesses have moved on, Frandsen said, the park’s numbers after over 20 years speak volumes.
“Some people said this was a fool’s errand … and the park would never contribute,” Frandsen said. “History is showing the park is paying for almost half of all the taxes collected in our community and there is no end in sight.”
Though the Pearson Education building, 135 Mt. Zion Road, is vacant, Frandsen said it’s in the company’s financial best interest to find a tenant as they still must pay $1,12 million in property taxes.
“They will be paying property taxes to the city, whether that building is empty or not,” Frandsen said.