More than one million square feet of industrial and warehousing space will be added in Greenwood in the coming year, which local officials say is needed by businesses want to relocate or expand.
Greenwood officials have approved tax breaks for multiple speculative buildings and are set to vote on a tax break for another later this month.
Speculative buildings, ones that are constructed prior to any contracts being signed with future tenants or owners, are in high demand, according to the Johnson County Development Corp.
The Greenwood City Council has approved about $4.7 million in property tax breaks for three speculative buildings since 2015: two 500,000-square-foot speculative buildings last fall and a 132,000-square-foot building in 2015. The council is now considering a tax break for a fourth building planned for the Southpoint Business Park.
Currently, options for businesses looking to lease or buy in Johnson County are limited to smaller properties with few exceptions, according to the Johnson County Development Corp. Of the 18 non-speculative buildings listed on the group’s website, 17 were under 100,000 square feet. One was listed at 412,000 square feet.
Speculative buildings are attractive to businesses looking to relocate or expand because of the flexibility they provide, Johnson County Development Corp. manager of community development initiatives Dana Monson said.
Most recently, Scannell Properties proposed plans to spend $9.4 million on a 232,000-square-foot building in the Southpoint Business Park, off of Interstate 65 between Main Street and County Line Road. The building is set be used as a distribution or manufacturing facility. Construction is planned to begin in the first quarter of 2017 and is projected to be complete by the end of the year, according to a tax abatement request filed with the city.
The Indianapolis-based real estate development and investment company has asked for a 10-year, $1.1 million tax break on the project, citing the competitive nature of the speculative building market. The city will collect about $1.1 million in property taxes over the same time period.
“I think it is a win-win for us,” council member Chuck Landon said. “I can’t see how letting the property sit there and do nothing benefits the community.”
If the council doesn’t approve the project, and if nothing else is built on the property, the city would only collect about $220,000 over the next 10 years, he said.
If approved, Greenwood is set to have nearly 1.4 million square feet of speculative building space for businesses to move into when work on the projects is completed.
“These guys are putting their money in it, millions of bucks, they won’t build a building that they don’t think they can’t rent and lease out,” Landon said.
That developers are willing to invest millions of dollars in these types of projects in Greenwood shows confidence in both the community and the economy, Monson said.
Monson declined to name specific business looking into the properties, but said the county has had businesses express interest in these types of buildings.
“These are positive steps for our county,” she said. “We do want to make sure we have the right facilities for the right companies.”
The tax incentives are necessary, Monson said.
“These incentives are given by all of the other surrounding counties,” she said. “If we choose not to, there are other counties that would be willing to do that.”
Some city council members have raised concerns about whether speculative building projects are worthy of a tax break, especially since many do not have data on the number of jobs that would be created by the development.
“I believe that the only time taxes should be abated are if they are for good paying jobs. Shell buildings don’t show me that,” city council member Bruce Armstrong said.