By Jerry LaMartina
The proposed $113.2 million Westbrooke Green mixed-used development in the largely vacant and decaying Westbrooke Village Shopping Center at the northeast corner of 75th Street and Quivira Road received Shawnee City Council approval Monday night.
The council approved a tax-increment financing (TIF) project plan and preliminary redevelopment agreement, the creation of a community improvement district (CID) at the site and a financing method for it, and rezoning for the project.
The council unanimously passed the rezoning ordinances; Ward 2 councilmen Eric Jenkins and Mike Kemmling voted against the TIF project plan, the redevelopment agreement and the CID.
The project’s developer is MP Westbrooke North LLC, a joint venture of Mission Peak Capital, based in Kansas City, Mo., and New York City, and Extell Development Co., based in New York City. John D. Petersen with the Polsinelli law firm represents the developer.
Westbrooke Green would occupy about 32 acres and contain about 529,500 square feet, with:
- Eleven commercial buildings for office and retail use — 10 new and one existing — containing about 108,500 square feet;
- Five new multifamily apartment buildings with about 530 luxury units;
- Amenities including structured and surface parking, street parking, garages, an open courtyard space, a town square, an amphitheater, an outdoor dining area, landscaping, lighting, utilities, storm water improvements, water features, sidewalks and walkways, and streets and drives, according to the project plan.
The average rent for a roughly 800-square-foot apartment in the development would be about $1,100 a month, P.J. Ventola, managing director of Mission Peak Capital’s development team, said Nov. 13. New retail space would lease for $19 per square foot, and existing retail space would lease for $13 per square foot. The developer bought the land in February for $3.1 million.
The developer had anticipated starting the project in 2018 and completing it in 2020. Now, demolition on the site is scheduled to start in October 2018; the first phase of construction is scheduled to start in October 2019 and be completed in October 2021; and the second of two construction phases is scheduled to start in October 2022 and be completed in October 2024.
Changed amounts of public finance incentives, project cost
The cost to build the project and the amount of city-approved public financing incentives increased, and the amount the developer will spend on the project decreased, since the council’s Nov. 13 meeting, at which it established a TIF redevelopment district at the site. The updated amounts:
- Increased anticipated construction costs pushed the estimated project cost to $113.2 million from $110 million.
- City-approved public funding increased to $31.9 million from $25.5 million.
- Of the city-approved funding, TIF increased to $21.5 million from $19.5 million for 20 years,
- CID funding with interest included remains $10.4 million for 22 years through a 1.5 percent sales tax on businesses in the district.
- The developer will spend an estimated $81.3 million on the project, down from the prior estimate of $85 million.
- The developer also can use $3.3 million in proceeds from industrial revenue bonds for sales tax exemption solely on construction materials, up from $3.2 million.
TIF is a 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. TIF is based on the “but-for” principle, meaning consideration is given to whether a development wouldn’t be financially feasible but for TIF.
Public finance incentives: Pro and con
Disagreements arose among council members and members of the public who spoke at Monday night’s meeting about the amount of public financing for the project and whether the council should have delayed action on the project until the new council is seated in January.
“I’d be quite happy to see it deferred at least until the time we get the new council seated,” Jenkins said. “(What the developer seeks) pretty much is every incentive that the city has… We have this kit that has CIDs, it has where we can refund the sales taxes, it has property tax abatement and all that. But it seems like now on the council every time we see a proposal come in here it’s for everything. ‘We want the whole kit. So basically take the kit, dump it out, we want it all. We’re not going to negotiate.’ It’s all or nothing.
“The idea is to grow the tax base,” Jenkins said. “We’d like to see that new business development contribute so there’s actually something coming…I’m not really opposed to the project. We need something done there, and it’s very important to get something done there. But I’m really concerned with the level of incentives that we’re doing.”
Ward 3 Councilwoman Stephanie Meyer said the project site “is a project that I’ve heard about perhaps more than any other area in the town, that it’s blighted, that its run down, that it’s crime ridden, that something needs to be done about it.”
“This is, I think, a great solution to that,” Meyer said. “It’s also a solution to growing our business base…It brings in a project that’s interesting and unique and different for Shawnee, something that other areas are doing with great success. And we’re not using every tool in the toolbox. We’re using TIFs and CID…The city is going to get the same amount of money in terms of the taxes that they pay…and the same with sales tax, and instead of having a blighted eyesore in Shawnee, we’re going to have something that we can be proud of.”
Jenkins said that it was “interesting to me that it’s either this project or nothing.”
“To sit here and say if we don’t do this project, nothing could happen there for 20 years is a little disingenuous,” he said, and added that costs for basic services to the redeveloped area will increase while tax revenue will stay flat.
Ward 3 Councilman Jeff Vaught said that if the city were to reject the project in its current form, then no other developer would propose a project with housing for the site.
“As far as negotiations go, I don’t know why everybody thinks that a developer walks in and tells the city ‘This is what we want,’ and the city goes ‘OK, let’s present it to the council,’ ” Vaught said. “This has been going on for months. (There were) massive negotiations. I can guarantee you they walked in and asked for more than what they’re getting. I can guarantee you (city) staff negotiated it. (To Jenkins): You and another person implied that there were no negotiations. Unless you know that for sure, don’t say it.”
In its original TIF application, the developer projected TIF revenue of $33.5 million from the project (the city approved $21.5 million in TIF) and CID revenue of $9.8 million (the city approved $10.4 million from the CID).
Shawnee resident Stephanie Morgan lives near the project and addressed the council during the public comments segment of the meeting.
“I’m going ask you guys to help me help Shawnee,” Morgan said. “The last economic report you did pointed out that 40 percent of my shopping needs, dining needs and service needs are not met by Shawnee…We are not attracting residents and businesses that can support the kind of places we need…We don’t have destination places. We don’t have destination services.
“I grew up here and I remember when this was a great shopping center …,” she said. “Eventually, we’ll become a bedroom community where the only money that will be left is in our homes, and in higher and higher property taxes just to keep the lights on, to keep the fire and police here and to keep the sewers running.”
Shawnee resident and former councilmember Tracy Thomas said she was “kind of embarrassed for Shawnee, because I think you’re being taken advantage of.”
“It’s a test and a financial and a retail fantasy,” Thomas said of the project. “You’ve got a failed retail site in a high-crime corridor, but if you vote on this tonight, it’s a new record for greed…Every brick and mortar store will be paying a 2-and-a-half-percent lug to the mob of development attorneys. They don’t add any value to the land.”