After developer fails to acquire land, Lenexa council scraps proposed City Center North Village mixed-use project

Lenexa City Hall.
Lenexa City Hall.

By Jerry LaMartina

A proposed tax-increment financing (TIF) project with a private hospital and a mixed-use office, retail and multifamily residential component on the northwest corner of 87th Street and Renner Boulevard in Lenexa has been scrapped because the developer failed to acquire the property.

The proposed project, City Center North Village, was to have had two components:

A 10-acre development with:

  • A roughly 70,000-square-foot, multistory private hospital with six operating rooms, 20 patient beds, an imaging suite, a lab and pharmacy, surface parking and other infrastructure;
  • A 60,000-square-foot medical office building;
  • A 60,000-square-foot hotel;
  • A 157,000-square-foot structured parking garage;
  • An extension of Elmridge Street to connect with Renner Boulevard.

A 17-acre, 385,000-square-foot commercial development with:

  • Office, retail and multifamily residential components;
  • Parking garages and surface parking;
  • Related site improvements;
  • An extension of Scarborough Street from 87th Street Parkway north to Elmridge Street.

The city had approved TIF project plans for the development on June 7, 2016. TIF reimbursable costs for the developer were estimated at $22.5 million for the project’s hospital component, with a projected 20-year tax increment value of $15.5 million; and $40.4 million for the office, retail and multifamily residential component, with a projected 20-year tax increment value of $30.8 million.

TIF is public financing tool by which a developer of a blighted property is reimbursed for eligible development and infrastructure costs using the increment of new property or sales tax revenue generated by the development.

The developer, Lenexa Development Partners LP, is a subsidiary of Chicago-based Kaizen Development Partners. Nick Summerville, managing partner and chief operating officer for Kaizen, declined to say how much the overall project was estimated to have cost to build or whether the company planned to resume efforts to buy the property or to pursue other developments in the Kansas City area.

At the Lenexa City Council’s Dec. 5 meeting, City Attorney Cindy Harmison summarized the proposed project’s details and said the developer’s inability to acquire the property resulted in the expiration of the TIF project plans.

The council then held two public hearings — required by state law “when there’s a substantial change to a project plan,” Harmison said — and unanimously passed two ordinances, without discussion, repealing two prior ordinances that had established the project’s TIF plans. No members of the public spoke during the public hearings.

Ward 1 Councilman Joe Karlin and Ward 3 councilmen Lou Serrone and Dan Roh were absent from the meeting.