The area developer responsible for attracting FedEx and Amazon to Greenwood will build a speculative building in the same industrial park after the city council approved it on Monday night.
The Greenwood City Council approved a tax break for the speculative development on a vote of 7-2, with council members Bruce Armstrong and Dave Lekse voting no.
Last month, the city’s redevelopment commission unanimously approved the 10-year, $2.27 million real property tax break for Scannell Properties to build a 541,500-square-foot warehouse that could serve as a manufacturing or distribution facility for prospective clients.
Scannell, and eventually whatever company moves into the building, would pay about $2.23 million in property taxes during that time. The building would be located just south of the Amazon facility, which is expected to open later this year.
In its proposal, Scannell plans to make $26.5 million in real estate improvements, according to city documents. They would lease the building, which the company hopes to start construction on this spring and wrap up by spring 2020, city documents said.
Scannell will also pay to install water, streets and drainage facilities to serve the newly constructed warehouse.
City officials approved a non-traditional abatement schedule. Scannell will pay 20 percent of taxes the first three years; 30 percent the fourth year; 35 percent the fifth year; 50 percent the sixth year; 65 percent the seventh year; 75 percent the eighth year; 85 percent the ninth year and 95 percent the final year of the abatement.
It is unclear how many jobs the development will bring to the area or how much they will pay because the building is being built on a speculative basis, Scannell said in its application, which is why Armstrong and Lekse voted against it.
Democratic candidates for city council spoke against the abatement during Monday night’s council meeting, leading to a debate.
Matthew Smith, a Democratic candidate for council and a Board of Zoning Appeals member, expressed two concerns. Since the development is speculative, there’s no way of knowing or controlling what business moves in. He is also concerned that the developer requested the abatement so it could offer more attractive rents to high-end manufacturers.
"What happens in 10 years when these abatements go away? I know buildings depreciate, but it’s not going to be that much. Are they suddenly going to be affordable? Or (is the developer) going to raise rents on whoever moves in there and make it unaffordable?" Smith asked.
Fellow Democratic candidate for council Kyle Swain agreed.
"While I’m not opposed to tax abatements, I would like to see it used for beautification or some sort of purpose to provide amenities or walk-able spaces instead of just a straight corporate welfare handout," Swain said.
City council member J. David Hopper answered to his concern.
"Just to clarify, for like the millionth time, we don’t get any money if a business doesn’t come here. We don’t cut anybody a check. We can’t spend any money on beautification or other projects. There is no money for that. That’s not how it works," Hopper said.
Republican mayoral candidate Dale Marmaduke argued that is exactly how it works.
"It is a gift. The city is not collecting what they collect from everybody else, and so I ask that you end corporate welfare, especially for the unknown," Marmaduke said.
