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Tuesday, August 8, 2017
$182M OP project advances as councilman makes case for incentives

  

$182M OP project advances as councilman makes case for incentives

By: Brent Roberts, KCBJ

The Overland Park City Council advanced incentives for a $182 million mixed-use project on Monday, after one of its members defended the city's targeted use of tax breaks.

By a unanimous vote, the City Council advanced consideration of nearly $27 million worth of incentives for the project, which is being developed by 115 Land Investors LLC, a partnership involving Kansas City-based Block Real Estate Services LLC and The Retail Connection LP, a Dallas-based firm.

The 37-acre site, which the developers have under contract, is an undeveloped portion of Sprint Corp.'s world headquarters campus at the northwest corner of 115th Street and Nall Avenue. It is just south of the two headquarters buildings that Block Real Estate Services has developed for Teva Neuroscience Inc. and Mariner Holdings LLC at College Boulevard and Nall Avenue.

Plans for the site at 115th and Nall call for two multifamily buildings housing 548 apartments, 240,800 square feet of retail, and surface and structured parking.

In support of the project, the City Council directed staff to work with the developers to finalize creation of a community improvement district, which would cover as much as $22.15 million in project costs via a 1-cent sales tax surcharge to be collected on the site.

In addition, the council advanced consideration of economic development revenue bonds, which would provide 115 Land Investors LLC with a sales tax exemption on construction materials and equipment. It is expected to generate savings of $4.76 million for the project.

A public hearing on the incentive requests is expected to be conducted during the City Council's Sept. 18 meeting, during which rezoning and a preliminary development plan also are scheduled to be considered.

Charlotte O'Hara, who is challenging Carl Gerlach in Overland Park's Nov. 7 mayoral race, attended Monday's meeting but did not speak regarding the 115 Land Investors LLC project.

But Councilman Terry Goodman had a few words that apparently were targeted at O'Hara, whose campaign has focused largely on her opposition to Overland Park's increasing use of development incentives in recent years.

When Goodman was elected to the City Council 16 years ago, he joined one of the region's stingiest governing bodies in terms of granting tax breaks. On Monday, however, he said opposition to incentives "for politically expedient reasons is wholly inappropriate."

"If someone's economic development perspective was formulated 10 or 15 years ago, or even five years ago, I would suggest it is very much out of date," Goodman added.

Cities now face more pressure to grant incentives because they face economic development competition on the local, regional and nation levels that they did not face five years ago, he said.

In addition, Goodman said, banking requirements have changed such that "it's no longer possible for many developers to make ends meet without some type of public assistance."

That's particularly true, he said, in the case of redevelopments, which often involve extraordinary costs such as demolition, utility relocation and construction of parking structures.

Goodman also defended the council against claims that it is giving away money to developers, when in actuality the money used for incentives does not exist until it is generated by the project receiving public support.

"It's impossible to give away money that you don't have," Goodman said.

The public-private partnerships that Overland Park has approved to date have been focused on attracting and retaining jobs and creating environments employers are looking for, Goodman said. And, when appropriate, claw-back provisions have been included, which allow recovery of a portion of an incentive in the event that job-growth targets are not met.

"Overland Park has not approved any incentives that have placed the general fund at risk or caused public services to be diminished," Goodman said. "Nor have tax increases been required because of previously improved incentives."

In fact, Goodman noted, a .25 mill property tax rollback is included in the city's proposed fiscal year 2018 budget, which was the subject of a public hearing during Monday's meeting.

"Public-private partnerships are not giveaways, as some suggest," Goodman concluded. "Rather, they are carefully considered investments in Overland Park's future."

During the public hearing on the city budget Monday, Tracey Osborne, president of the Overland Park Chamber of Commerce, circulated a letter from her board that supported the City Council's spending priorities and its investments in public-private partnerships.

"These investments have a proven track record of success in the advancement of infrastructure, public safety, job creation and redevelopment," the letter states. "It is also not unnoticed that these investments, along with outstanding stewardship by city staff and elected officials, reward our city with the lowest first-class city tax mill levy in the state."

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Tags:    Teva Neuroscience   Block Real Estate Services