Title
Mid-States Personal Property Sales Tax Exemption for Non Manufacturing Equipment Request
Body
Issue/Request:
This is a request for the City of Lee's Summit, Missouri (the "City") to certify an application by Mid-States to the Missouri Department of Economic Development (MODED) for sales tax exemption on non-manufacturing equipment.
Key Issues:
The City Council will consider whether to authorize city staff to certify the application for state sales tax exemption.
A Chapter 100 Plan for the Mid-States Warehouse Expansion was approved by the City Council on February 10, 2026. After the approval of the Chapter 100 plan, Mid-States worked with the Lee's Summit Economic Development Council (LSEDC) and MODED to obtain a State Sales Tax Exemption. Due to the timing of the requests, the state sales tax exemption was not included in approved Chapter 100 plan.
Background:
Based on information supplied by the applicant, Summit DC Real Estate Holdings, LLC, is a limited liability company organized and existing under the laws of the State of Delaware and is affiliated with Mid-States Distributing LLC (“Mid-States”). Mid-States is headquartered in Fort Worth, Texas, and operates a network of farm, ranch and home retailers serving 32 states, with over 700 store locations. The Company operates a distribution facility on approximately 40 acres of property located at 420 SE Thompson Dr, Lee's Summit, MO 64082 containing approximately 650,000 square feet of space and 104 loading dock doors (the “Existing Facility”).
On November 4, 2025, the City Council heard a conceptual presentation from the Company regarding an incentive request to support the company’s planned expansion of the warehouse and distribution facility at the Project site. The expansion would occur on approximately 39 acres to the north of the Existing Facility. The City Council provided generally positive non-binding feedback about the incentive request.
On February 3, 2026, the City Council held a Public Hearing for a Chapter 100 Plan for the Mid-States expansion project. At that same meeting Bill No. 26-021 - An ordinance approving a plan for an industrial development project and authorizing the City of Lee's Summit, Missouri to issue taxable industrial development revenue bonds in a principal amount not to exceed $79,650,00 in connection with the Mid-States project and authorizing certain documents and actions in connection therewith, was first read. On February 10, 2026, Bill No. 26-021 was passed by unanimous vote.
The Company’s Existing Facility is about 650,000 square feet. The Project to be financed by the Bonds consists of an approximately 465,000 square foot expansion to the Company’s Existing Facility, together with the installation of equipment in both the Existing Facility and the expansion facility. The expansion of the new structure will be constructed on approximately 39 acres to the north of the Existing Facility, which, together with the roughly 40 acres on which the Existing Facility is located, collectively constitutes the “Project Site.”
The Project is expected to cost approximately $79,510,000, consisting of approximately $54,510,000 of real property and improvement investments, including land acquisition and the acquisition cost of the Existing Facility, and approximately $25,000,000 in personal property investments. The investments are anticipated to be made in the years shown in the attached Cost- Benefit Analysis, although the actual years of investment may vary based on Project implementation.
The Company has entered into a Real Estate Sales Contract with the City which allows the Company to purchase from the City a strip of property that is 50 feet wide and 1,234 feet long, along the northern boundary of the parcel that is occupied by the Company’s Existing Facility. The purchase of this land from the City will allow for the expansion of the building to the north.
After approval of the Chapter 100 Plan, the company received and offer from MODED for Sales Tax Exemption on the purchase of non-manufacturing equipment, which the company accepted. To formally implement the sales tax exemption, the City is requested to co-execute with the company MODED's formal application.
Proposed Motion:
I move to authorize staff to certify the application for chapter 100 sales tax exemption for non-manufacturing equipment related to the Mid-States Warehouse Expansion project.
Impact/Analysis:
Authorization of the application will result in sales tax exemption on up to $25,000,000 in non-manufacturing equipment. At the current city sales tax rate of 2.75%, this results in an exemption amount up to $687,500.00.
Timeline:
Developer has indicated equipment will be purchased in 2026, 2027, and 2028 and will be placed in service in 2027, 2028, and 2029.
Presenter
Curt Petersen, Polsinelli, P.C., for the Applicant
David Bushek, Gilmore & Bell, P.C., City economic development legal counsel