Groundbreaking will take place tomorrow in Latonia on the first new industrial building in decades, a spec build by a group of investors led by Covcor on space behind the Latonia Commerce Center.
The groundbreaking on the 146,000 square foot, $17.5 million industrial building in at 10 a.m. on Wednesday at 135 W. 38th Street in Latonia.
No tenants have yet been announced yet, but developers anticipate it could house four different users with the potential to create more than 100 jobs that City officials say could bring $79,000 to $145,000 a year in payroll tax revenue.
The Covcor real estate investments owns the land and is behind the project. Its principal Josh Niederhelman said the project features flexibility: Inquiries have ranged from a basketball court and running track to a call center to assembly to light manufacturing.
“We’re building four walls and a roof … it literally could be anything,” Niederhelman has said. “This will be a good option for manufacturing and assembly and other use types that want to be close to labor and a dense population base.”
To encourage the creation of as many jobs as possible, the Covington Board of Commissioners a bond incentive that, over its 15-year term, rises in value to the company as collective payroll generated by the building increases.
“This is a huge project for Covington and fills a gap in the type of space we’re able to offer potential businesses,” Economic Development Director Tom West said. “We don’t have a lot of industrial land that’s not already been developed.”
The payoff in new tax revenue that funds City services could be even more significant, he said.
Taxpayers are not on the hook for the borrowing – its payback is the obligation of the developer, who nevertheless enjoys the benefit of a lower interest rate and a lower property tax payment. The IRB is needed to help keep lease rates competitive, West said.
In general, the bonds work by allowing the developer to pay only a percentage of the property tax they would otherwise owe for a certain number of years in exchange for creating a project that generates jobs and significant payroll tax. That’s critical in Covington, because payroll taxes fund more than 50 percent of the General Fund.
In the case of the Latonia project, the 15-year arrangement decreases the percentage of property tax owed – called a PILOT, or “payment in lieu of taxes” – from 60 percent to 20 percent as payroll in the building increases from $2 million to $5.5 million.
The new jobs may be well suited to recent high school graduates who choose to enter the workforce right away.
The building will sit on 8 acres owned by Covcor just west of what’s now named the Latonia Commerce Center and east of the railroad tracks. The land is zoned for industrial development.