By Jerry LaMartina
The Lenexa City Council gave the green light Tuesday night for another tax-increment financing (TIF) development in City Center.
The developer, KSMC LLC, plans to build the project in two phases on 1.6 acres between Winchester and Elmridge streets north of 87th Street Parkway in City Center North, which covers about 67 acres on the northwest corner of 87th and Renner Boulevard. City Center North is part of the roughly 424-acre City Center TIF District.
The project’s first phase, scheduled to start on June 30, will have a two-story, 21,000-square-foot multitenant retail building with associated site work, utilities and parking facilities, according to city documents on the project. The second phase will have a 6,000-square foot multi-tenant retail building with structured parking.
The project’s TIF will generate an estimated $4.5 million over 20 years, City Administrator Eric Wade said in a presentation to the council. All of the increment of new tax revenue in the second half of that period will go to the city for public expenses, such as those for parking structures.
This is the fourth active project in City Center North, Wade said. The project plan also provides for reimbursing the city for the Civic Center public parking garage and public plaza, and the public parking garage on the Shawnee Mission School District Aquatics Center site, both within the City Center TIF District, as TIF-eligible expenses, according to the documents.
The city also approved issuing as much as $5 million in industrial revenue bonds (IRBs) for the project, which will exempt the developer from sales tax on construction materials.
A feasibility study prepared by city staff assumes the project’s first phase will be “substantially” complete by March 2019 and have a $6.25 million appraised value, and the second phase by December 2020 with a $2.4 million appraised value.
At its Tuesday night meeting, the council unanimously approved the development plan, the city’s development agreement with KSMC, an ordinance adopting the redevelopment plan and a resolution stating the city’s intent to issue the IRBs.
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.