The real estate firm developing a massive distribution center for Amazon on the site of the former Cortana Mall is seeking a 10-year property tax abatement on the project worth $35.4 million.
Under the proposed arrangement, which will go before the Metro Council for approval Wednesday, the Capital Area Finance Authority will take title to the property once Seefried Industrial Properties, the Amazon developer, has acquired the various parcels from the respective owners. CAFA, which is a public trust and therefore does not have to pay taxes, will then enter into a long-term lease agreement with Seefried that includes the 10-year property tax exemption.
In return, Seefried’s contract with CAFA will require the company to create 1,000 local jobs. Seefried also will agree to pay 100% of school taxes over 10 years, even while it is exempt from other local property taxes like those that support police, fire, libraries and parks.
The vehicle under which the deal is being structured is known as a payment in lieu of taxation, or PILOT.
“Seefried wants to pay 100 percent of the school taxes that will be due over the next 10 years to abate some of the other taxes,” CAFA President and CEO Mark Drennan says. “In return, they will hire 1,000 employees and create a whole new atmosphere at the abandoned Cortana Mall site. We are doing this to facilitate an economic development project for Baton Rouge.”
Drennan says the investment Seefried is making and the economic development potential of the project, which has been in the works for more than two years, more than makes up for the tax incentive the company is seeking.
CAFA’s board has already approved the deal and Mayor Sharon Weston Broom’s administration is sponsoring the measure that will go before the council for approval.
The company was not eligible to seek an abatement under the state’s Industrial Tax Exemption Program, or ITEP, because the proposed 2.9 million-square-foot distribution and fulfillment center will not be a manufacturing facility.
The item that goes before the Metro Council tomorrow is the first of several measures the council will need to approve in the coming weeks. Later this month, it will consider Seefried’s rezoning request for the site, which was approved Monday night by the Metro Council, and also its site plan for the project.
(Editor’s note: Due to incorrect information provided to Daily Report this story has been changed since publication to clarify the amount of the abatement Seefried is seeking. Daily Report regrets the error.)