The new Five Below distribution warehouse under construction in Smarr will pay about $8 million in county and school taxes over the next 21 years after tax breaks were approved on Tuesday.
While counties normally approve tax breaks before a new industry begins work, Five Below is already far along in construction even as it negotiated its tax deal with the Monroe County development authority. Authority attorney Kevin Brown told authority members before they approved the deal at their monthly meeting on Tuesday that he told Five Below up front it would not get any breaks on school taxes. School taxes comprise the biggest part of a property tax bill, and Brown said original estimates showed Five Below would pay $6 million in school taxes, about $285,000 per year, over the 21 years of the deal. However, that estimate was made when Five Below planned to build a $41 million facility, and now, said Brown, they plan a $60 million facility. So that school tax bill will be even higher. And if Five Below follows through with a planned second phase to the warehouse, the value would go as high as $120 million, meaning even more property taxes to the county and schools.
The authority did, however, discount county taxes by about a third over the 21 years. For the next three years, Five Below will pay no county taxes before paying increasing percentages each year. In all, Brown said Five Below will pay about $2 million in county taxes over 21 years after getting about $3 million in tax breaks through 2039.
“They’ll still pay a significant amount of money,” said Brown. “It’s a good deal.”
In the deal, the authority will actually own the title to the property and Five Below will pay the authority a lease payment in lieu of property taxes.
The Monroe County tax assessors are slated to vote on the tax deal next Monday, Nov. 19.