The Three Trails Industrial Park sign — on a semitrailer parked on a bluff above Interstate 49 in south Kansas City — isn’t the only thing that stands out about the new warehouse and industrial park.
The NorthPoint Development project received a fairly rare equity investment, at least in the Kansas City area, through the federal New Markets Tax Credit program. And as part of that financing agreement, NorthPoint made an unusual workforce development donation to the Greater Kansas City Local Initiative Support Corp., better known as LISC.
NorthPoint gave $160,000 to help fund LISC’s Financial Opportunity Centers that provide job training, financial coaching and emergency assistance to area residents. LISC operates four such centers in the metro area and is working to open a fifth.
To get to the point of the LISC gift, NorthPoint stitched a fabric of public and private investment for its speculative industrial development on the former Rockridge Quarry site between Interstates 49 and 435. Access to the project is on Elmwood Avenue off 87th Street.
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NorthPoint vice president Brent Miles said the $16 million first phase, a 364,000-square-foot building, will open this quarter with two already announced tenants, Boulevard Brewing Co. and Commonwealth Inc., occupying 78 percent of the space. Miles said the early response has prompted NorthPoint to begin a second, 331,000-square-foot building.
The 90-acre Three Trails development is being assisted by a 20-year property tax break granted for 13 years of 100 percent abatement, with abatement percentages declining each year beginning in year 14 down to a 10 percent abatement in years 18 to 20.
Also, PortKC, a Kansas City redevelopment agency, last fall issued $9.9 million in bonds to help finance the acquisition, construction and improvement of the Three Trails project.
As for the New Markets Tax Credits, U.S. Bank closed on an equity deal that defrays some of NorthPoint’s development costs. The credits came through a federal program designed to increase capital flow and job development in low-income census areas.
Chris Vukas, a Sunflower Development consultant and former LISC executive, worked on that part of the deal. Knowledgeable about the competitive New Markets Tax Credit program, Vukas linked the NorthPoint project with U.S. Bank’s purchase of about $16 million in tax credits that, he said, “roughly allocate to about $3 million in equity investment in the project.”
The money path from U.S. Bank, which benefits from the tax credits, actually traveled through Central Bank and Enterprise Bank, which didn’t need the credits.
“U.S. Bank is the investor that purchased the credits from Central and Enterprise,” Vukas explained. “Their purchase of tax credits to offset their tax liability becomes their equity in the project, a one-time injection of capital.”
Vukas said the Kansas City area hasn’t been as active in the New Markets Tax Credit program as some other cities, including St. Louis.
NorthPoint is a major industrial park developer in the Kansas City area. Its properties include Logistics Park Kansas City, the intermodal facility served by BNSF Railway; Riverside Horizons; and Kaw Point in the Kansas City, Kan., Fairfax District.