On June 1, 2016, the Board of Directors of the Allen Economic Development Corporation (AEDC) unanimously approved a recommendation to the Allen City Council for approval of a 50% tax abatement for 10 years on real property (building value only) for One Bethany Development Partners LP in support of the construction of a 125,000 square foot, 5-story Class A office building on Bethany Drive in Allen, Texas.
The proposed property tax abatement would apply only to the office building. The abatement would not apply to land, business personal property, or the parking garage that would be constructed as part of the project.
Allen has recently been challenged by a lack of office space. With a citywide office vacancy rate of less than 5%, the AEDC is having difficulty recruiting employers that require immediate occupancy because vacant space is not available.In order to solve this critical economic development challenge, the AEDC has been pursuing the development of a 125,000-square foot, 5-story Class A office building with an approximately 550 car parking garage in Watters Creek Office Park (the land located at Bethany and US 75, directly north of the Watters Creek shopping center).
Kaizen Development Partners was recruited to construct Phase I of the office development in the park. Staff believes that the construction of this first building will provide a solid base for the development of an additional 4-5 office buildings in the park.
The office developer has requested a City of Allen tax abatement in order to proceed with the project.
Collin County is also prepared to consider a 50%, 10-year tax abatement for the real property on the project. This incentive is critical to the project proceeding.
Attached are the preliminary design plans for Phase I and Phase II of the office project, as submitted by Kaizen Development Partners and currently under review by the City of Allen. Please note that only Phase I of the office project is being considered for development at the current time.
The AEDC economic impact model indicates that this $30+ million office project will create space to house 550 jobs and have an average annual impact of $262,961 to the City and $594,661 to all of the property taxing entities combined (net of tax abatement). The AEDC sold land to the project and also offered incentives to support the project, including a parking garage grant to assist with the construction of the garage. Since this funding was provided for the garage, it was specifically stipulated that the $5 million parking garage be excluded from tax abatement.
Please find attached a summary of the impact analysis that includes the following information:
City Property Taxes Abated Over 10-years: $689,000
- City Property Taxes Collected Over 10-years: $1,162,543