The Mission Planning Commission gave unanimous approval Monday to a preliminary site development plan for a new version of the Gateway project at Johnson Drive and Roe Avenue.
Developer Tom Valenti said the new project will cost $145 to $150 million and that he will be asking for $29 million in public incentives, using a Community Improvement District (CID), Tax Increment Financing (TIF) and hotel tax revenues to pay off bonds.
Outlining an ambitious schedule, Valenti said he hopes to get city approval this year and begin construction in early 2016. Since some of the preparation site work is already done, Valenti said, the Walmart planned for the project could be built in nine months and be open by late 2016.
The latest Gateway design that Valenti is bringing to the city includes the 150,000 square foot Walmart with a grocery and garden center, a 200-room hotel, 182 units of market-rate apartments and approximately 57,000 square feet of first-floor retail under the apartments. An office building along the Shawnee Mission Parkway side of the project will only be included if tenants are found before construction begins.
“I heard loudly and completely, that I needed to come back with a plan (that met mixed use),” Valenti said of his proposal last November that would have been primarily the Walmart with a small retail strip. “Financially, this plan works for us,” Valenti said. The Walmart will be only a one-story building in this version. The previous design had other retail on top of the Walmart. That was a key component that caused the 2012 plan to fail, according to Valenti, because he could not find tenants for that space.
The other cost challenge in the 2012 plan was the design of the parking garage, he said. The new proposal has the parking structure not attached to the buildings and not below grade. The first level of the three-level parking will serve the Walmart store. Street parking also has been included along Johnson Drive and Roeland Drive.
The new plan is considerably smaller than the 2012 version, which was approved by the city council in early 2013 along with its financing incentives. The total development area of the plan has been reduced from 741,402 square feet in 2012 to 576,124 square feet in the current version. The parking structure is now three floors instead of four and parking is reduced from 2,288 spaces to 1,533 spaces.
The 2012 version did not have an office component or a hotel but did have much larger retail and residential plans. “We have a national brand that has been approved,” Valenti said of the hotel. He called it a “boutique-type” hotel that he and his partners would own and operate under a franchise agreement. The hotel would potentially have two restaurants on the third level where there is a connection to the apartment buildings. The hotel and residential would share a fitness area. A spa also could be located in the hotel.
The hotel would have a first floor service area, second floor lobby area, third floor restaurants with hotel rooms on levels four through seven. The third level of parking would be primarily for the hotel and restaurants. The hotel is designed for the southwest corner of the property near the intersection of Roeland Drive and Shawnee Mission Parkway.
The potential office space along Shawnee Mission Parkway has three levels with two levels of parking below it. Valenti said it would be hard to add the office in later if tenants are not committed by the time construction begins. “We don’t have one (office tenant) far enough along to commit,” he said.
Walmart, though, has “re-upped” its commitment, Valenti told the planning commissioners. “This has all been approved by Walmart.” The Walmart building will occupy the corner of Johnson Drive and Roe Ave., but the entrance will be from the parking area. Five access points to parking are in the new plan, but the Shawnee Mission Parkway access in the 2012 plan has been removed.
The small retail below the apartments along Roeland Drive and Johnson Drive would include “fast casual” restaurants, which Valenti said are likely to be chain operations. The restaurants in the hotel would be higher end service. The apartments will be in three stories above the retail and a courtyard is planned between the parking and the apartment buildings.
Valenti said the financing would all be based on special obligation bonds and will eliminate the general obligation bonds from the last development agreement that would have been an obligation of the city if additional tax revenue was not sufficient to pay them off.
In the new proposal, the bonds will no longer be used to pay the city back for its $12 million stormwater investment. Valenti said he will pay the $600,000 per year assessment that the council imposed earlier this year over the 20-year payment schedule that was imposed. City staff said Valenti’s firm has paid nearly $300,000 of obligations to the city from the last development agreement, which expires at the end of this year. A new development agreement will be required for the latest proposal.