NEW ALBANY

Developer VanTrust continues quest to expand presence in New Albany

Gary Seman Jr.
ThisWeek group
New Albany City Hall is at 99 W. Main St.

VanTrust Real Estate LLC once again is planning to invest in New Albany, which would increase the company’s footprint in the city to roughly 1.4 million square feet.

The development company, which has an office in Grandview Yard, has agreed to invest $14 million on 300,000-square-foot spec development that could include space for office, warehouse and manufacturing in the Oak Grove II Community Reinvestment Area.

In exchange, the city would provide a 100% abatement on real property taxes for 15 years.

The estimated value of the abatement is $5.67 million. The actual value will be set by the Franklin County Auditor's Office after the building is constructed, according to city spokesman Scott McAfee.

The legislation was to be considered at New Albany City Council’s July 20 meeting but was tabled until Aug. 3 meeting, McAfee said.

VanTrust has another building in that general area, as well, so if Innovation III – as it is being called – were approved, the company will have five buildings and nearly 1.4 million square feet of commercial space built in a two-year span, McAfee said.

Phil Rasey, vice president of development for VanTrust, said the company continues to view New Albany has a hot market with no cooling-off period in sight.

“They have a great story to tell” in New Albany, he said “It’s a good place to do business. A lot of companies want to do business there.”

Construction on the latest proposal is estimated to begin in June 2022 and to be completed by the end of January 2023.

According to the application filed with the city, VanTrust estimates there will be about 260 permanent employees, or full-time equivalent positions, created at the project site by Dec. 31, 2026. The aggregate annual payroll of the aforementioned employees is estimated to be $9 million.

The deal being considered includes a revenue benchmark of at least $1.18 of income-tax withholding per useable square foot.

The agreement includes a provision that not more than 25% of the newly constructed area can be deemed warehouse space for the purpose of calculating useable square footage. Furthermore, it allows the building owner to make a payment in lieu of taxes to meet the revenue benchmark – thereby guaranteeing a minimum amount of revenue throughout the term of the agreement. The owner is required to build an environmentally advanced level building to receive the full incentive term.

In this portion of the business park, the city deposits the first 30% of the income-tax withholdings collected at the new project site into the New Albany Community Authority Infrastructure Fund – roughly $810,000 over the full term of the abatement.

There is no abatement on income taxes, but because there is a property-tax abatement in place, 30% of income-tax receipts go to a special fund that pays for infrastructure repairs or new roads in the business park, McAfee said.

The remaining 70% of income-tax collections are divided 50% between the city of New Albany and the New Albany-Plain Local School District, he said.

In total, it is estimated that over the full term of the abatement, the New Albany-Plain Local School District will receive approximately $945,000 in incomed-tax-revenue-sharing payments from the city of New Albany. The city of New Albany will receive approximately $945,000 in net new income-tax withholdings over the same period.

Michael Loges, economic-development manager for the city, said 50% of the New Albany International Business Park is built out.

“VanTrust Real Estate has been a terrific partner in the continued development of the New Albany International Business Park,” Loges said. “Not only have existing New Albany employers, such as Voyant, Axium Packaging and Rieke, found space to grow in our community by leasing space from VanTrust, the city has partnered with VanTrust to attract national brands such as Hims & Hers, resulting in hundreds of new jobs to the community. It is the best of both worlds.” 

gseman@thisweeknews.com

@ThisWeekGary