A custom tax abatement approved for an industrial shell building proposed to attract new business to Columbus, or to encourage an existing business to expand, may encourage other developers to attempt a similar project.
Force Holdings’ proposal to build the structure without a buyer in place, and the city agreeing to give it a custom tax abatement without the immediate promise of creating jobs, was new territory for the council, which acted last week.
The 50,000-square-foot building will be built near I-65 in the vicinity of the Walesboro exit at the Woodside Northwest Industrial Park. As proposed, the building could be expanded to 200,000 square feet.
Shell buildings are unfinished structures that can reduce the time required for a company to occupy a building. The exterior would be constructed, while floors, interior walls and most of the utility systems remain unfinished.
This offers the tenant an opportunity to finish the building to its needs and greatly speeds up time to occupancy, according to Harold Force, president of Force Construction and a member of Force Holdings LLC.
Construction could begin within the next few months, Force said, but the company was reluctant to move forward without the 10-year custom abatement.
The abatement provides a 95 percent tax abatement for each of the first five years for the structure, and 80 percent on the sixth year. The abatement is at 60 percent on the seventh year, 40 percent on the eighth year, 20 percent on the ninth year and 10 percent on the 10th year. Normally 10-year abatements go down 10 percentage points per year, starting at 100 percent the first year.
The custom aspect of the abatement will protect the developers somewhat if the building does not sell immediately, Force said, adding that the developers are assuming all the risk of selling or leasing the property.
Before the council voted, Mayor Kristen Brown cautioned the council that some local business owners had approached her with concerns that the council was setting a precedent by awarding an abatement to a speculative project that had no job creation attached to it.
Jason Hester, executive director of the Columbus Economic Development Board, told the council that Columbus needs to have industrial-ready property to show to interested prospects, particularly shell buildings.
“We are thrilled to have a private developer taking the risk to do this,” Hester said.
Having the council approve the abatement could result in the city having more projects like this on the market in the future, he said.
There would be 10 construction jobs created with the project, Force said, with the average wage at $25 per hour and the average benefits at $14 per hour. The 10-acre site where the shell building would be located already has been designated as an economic revitalization area.
The value of the finished building will be based on user requirements.
Hester said that, with similar projects across the state, including recent shell buildings in Franklin and Muncie, developers received cash support from the local government. However, with the tax abatement, this project will be completed without public money, he said.