On Monday evening, the City Council approved the purchase of 26 acres of land, costing $8,000 per acre, on the western boarder of Hesston City Limits.
The land is located near the current industrial park and the City plans to utilize the land as industrial property.
The city plans to finance the purchase paying $50,000 in cahs from the Capital Improvement Fund and the paying the remaining $158,000 as a lease-purchase agreement. The City is working through Citizens State Bank.
According to Bond Council, the lease agreement is written to provide the City with maximum flexibility in utilizing, selling or giving away the land.
Currently it is zoned and is being used as agricultural.
Councilman Jason Jones inquired if continuing to have the land used as agricultural land would pose a problem.
City Administrator Gary Emry said the County has encountered similar situations.
“If we didn't leave it ag-zoned then the tax-exempt status is impacted,” he said.
Bond Council said Citizen State Bank is expecting a tax-exempt interest rate.
“If farming constitutes a private use of the property, we will have to do research before close,” he said.
Bond Council said, in a worst-case scenario, Citizen State Bank may adjust interest rates to reflect expenses incurred by losing a tax-exempt status and paying income tax.