Village Shops, Corinth owners netted $47 million from sale of shopping centers

Funds from the CID approved by the Prairie Village City Council in 2010 were used for the construction of the new building that houses Starbucks at the Village Shops.
Funds from the CID approved by the Prairie Village City Council in 2010 were used for the construction of the new building that houses Starbucks at the Village Shops.

The Cosentino family-led ownership group that closed the sale of the Village Shops and Corinth Square to First Washington Realty in January brought in $47 million more from that transaction than they paid for the centers in 2009, according to figures released by Prairie Village City Councilor Jori Nelson at the Prairie Village city council meeting this week.

Information obtained by Nelson from the Johnson County Appraiser’s Office shows that the Village Shops sold for $54,915,000 and Corinth Square sold for $42,140,000. When LANE4 arranged the purchase of the centers in 2009, the owners bought the Village Shops for $27,800,000 and Corinth for $22,200,000. Figures for the sale of the Fairway Shops, which was part of both the 2009 and 2015 transactions, were not included in the information. The Appraiser’s Office noted that the figures recorded in the Village Shops and Corinth sales have yet to be fully validated by Johnson County officials.

The announcement of the sale of the shops in August provoked dismay from a number of Prairie Village residents and city councilors who had opposed the adoption of Community Improvement District agreements that brought a 1 percent sales tax hike to both centers starting in 2011. Proceeds from that tax are available to the owners of the center for redevelopment projects, and have helped fuel extensive renovations and construction of a new building at the Village Shops. Since the renovations began in 2012, sales tax collections benefiting the city have increased substantially.

But critics charged that the CID taxes provided more benefit to the owners than to Prairie Village residents. At the time of the announcement of the sale, Prairie Village city councilor Brooke Morehead, who made the CIDs a central issue in her 2012 campaign, said one of her biggest problems with the agreement was that it didn’t have any provisions allowing taxpayers to recoup their investment in the event of a profitable sale.

“There was no provision for any recovery of taxpayer subsidy in the event of ownership transfer,” she said. “It is basically a give away of public funds to a private developer.”

The Prairie Village City Council approved the transfer of the CIDs to First Washington in December, being contractually obliged to do in the absence of demonstrable concerns that a new owner was not financially able maintain the properties.

Since their inception, the CID sales taxes have produced approximately $3.6 million in proceeds. Over the course of the 22 years during with the CIDs will be in place, the sales tax is expected to produce more than $20 million.

At Tuesday’s Prairie Village City Council meeting, Prairie Village finance director Lisa Santa Maria provided a current list of sales tax rates in municipalities and special taxing districts throughout Johnson County. That list is embedded below.

https://dfv6pkw99pxmo.cloudfront.net/wp-content/uploads/2015/02/Doc-Feb-19-2015-8-41-AM1.pdf