By Roxie Hammill
Although a deal to redevelop the old 435 Overland Park Place Hotel grounds technically violates the city’s policy on public financing, a city council committee moved it forward Wednesday, saying the circumstances were beyond the developer’s control.
The city council’s Administration, Finance and Economic Development committee gave its blessing to a redevelopment agreement that captures 100 percent of the tax increment (expected increases in property or sales tax revenue due to the project) for the Metcalf 108 project. City policy enacted two years ago limits the percentage to 90 percent.
Developer Metcalf 108 Redevelopment Investors LLC asked for the higher percentage to compensate changes in state law and increased costs in the past few months.
Metcalf 108 would replace the old hotel near I-435 and Metcalf Avenue with a six-story, 150,000-square-foot office building, four-and-a-half-story, 610-stall parking garage and a Staybridge Suites hotel with 123 rooms. The hotel would not receive money from public financing, however.
The city council approved a TIF district for the $70 million project in July, but the redevelopment deal was to come later.
Curt Petersen, representing the developer, said the adjustment was necessary because the Kansas Legislature passed a law last summer excluding tax money for school districts’ capital expenses from use by developers in TIF districts.
That plus about $1.5 million in unexpected costs for the parking structure cut enough into the expected return from tax increments that the developer felt forced to ask for a higher percentage, even though the amount of money would stay close to the original ask, he said.
The idea gave council member Dave White pause. White, who voted against it, said it sets a bad precedent. “If we waive it for this it merely opens the door for other projects to do the same thing,” he said before the 4-1 vote for approval. “I just think it’s bad policy for us.”
Others on the committee said they were more comfortable with the idea, since the project was in the works before the state law changed.
“My goal is to build the building and get the structure up so we can have an office,” said council member Dan Stock.