Lenexa advances Sonoma Plaza project planned for last major vacant swath of land inside I-435 in JoCo

An early rendering of the Sonoma Plaza project.

The Lenexa City Council on Tuesday approved holding a public hearing at its Aug. 21 meeting to consider establishing a community improvement district (CID) for the Sonoma Plaza retail center on one of the last substantial tracts of vacant land inside the Interstate 435 loop in Johnson County.

The CID, requested by developer Sonoma Plaza Inc., would levy a 1 percent retail sales tax on all property within the roughly 29-acre area at the southeast corner of 87th Street Parkway and I-435 starting July 1, 2020, according to a Tuesday memo to the council from Assistant City Attorney Sean McLaughlin. Sonoma Plaza Inc. is a unit of Lenexa-based Oddo Development.

Sitting just across I-435 from City Center, the Sonoma Pointe and Plaza sites have been undergoing prep work for several months.

The developer proposes constructing multiple buildings that would contain about 143,700 square feet combined for components including offices, retail, restaurants and a grocery store, as well as private streets and parking facilities. All tax revenue generated by the CID would be used to pay approved eligible costs.

City staff recommended approving holding the public hearing. The council passed the measure as part of its consent agenda, without discussion. Ward 3 Councilman Dan Roh was absent.

Sonoma Plaza Inc. and the Earl M. Hoehn Trust together own all the land within the proposed CID, the memo said. The trust doesn’t intend to develop its portion of the CID property, and Sonoma Plaza owns the rights to eventually develop the trust’s portion of it.

On June 5, the council approved tax-increment financing (TIF) plans for Sonoma Plaza and the multifamily residential development Sonoma Pointe. The 20-year TIF plan would reimburse the developer using up to 40 percent of the TIF increment for up to 12 years for a maximum of $4 million, after which the city would be entitled to receive 100 percent of the increment and any balance for the remainder of the 20-year TIF term.

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. Consideration is given to whether a development wouldn’t be financially feasible but for TIF.

The council also approved on June 5 the city’s issuance of up to $20 million in industrial revenue bonds for the project.

Sonoma Pointe will have about 320 multifamily units in multiple buildings on roughly 29 acres near Loiret Boulevard and 87th Street Parkway. Construction started late last year, Ryan Powell, Oddo Development’s director of construction, said in May. The residential complex is being marketed as Sonoma Hill.

Sonoma Pointe’s proposed 20-year TIF plan would reimburse the developer for eligible costs using up to 50 percent of the increment of new taxes generated by the development, with a maximum reimbursement of $3 million, starting when at least one of the buildings with at least 150 units is completed. After that, the city would be entitled to receive 100 percent of the increment and any balance for the remainder of the 20-year TIF term.

Last October, the council approved having the city pay an estimated $4.4 million for road improvements for Sonoma Plaza.