Developers on the Bellmont Promenade project in Shawnee have asked the city to renegotiate the development agreement following the planning commission’s approval of a slightly tweaked version of the plan.
Shawnee’s hired municipal advisor Jim Prichard with Columbia Capital and bond counsel Joe Serrano advised the council committee Tuesday night of the developer’s new terms. Without approval of the new terms and subsequent refinancing, the project will probably not go forward, they said.
City staff indicated in a Jan. 8 memo that the project and deal terms have changed. At this point, the developer, Bellmont Promenade LLC (headed up by Legacy Development), is requesting the city approve the issuance of pre-construction special obligation bonds.
Serrano, an attorney with Kutack Rock, advised the Shawnee council committee that pre-construction special obligation bonds pose a reputational risk for the city, but Shawnee is not financially on the hook if the project fails or the bonds defaulted.
The council committee agreed 7-1 with the issuance of the pre-construction special obligation bonds, with councilmember Mike Kemmling casting the dissenting vote.
The Shawnee planning commission recommended Monday that the council approve the revised TIF (tax increment financing) project plan. The commission determined that it is in line with the city’s comprehensive plan.
In general, the developer has requested public incentives including a 90 percent TIF property tax, 1 percent TIF City general sales tax, sales tax exemption for industrial revenue bonds (to cover all components of the project), a 1.6 percent sales tax on a new CID (community improvement district) as well as CID special assessments, and the issuance of $19.5 million in special obligation bonds with a senior-subordinate structure.
The developer estimated the total cost of the project is $98.9 million. Legacy Development plans to sell the mixed-use portion of the development for about $50 million to Bach Homes LLC. As such, the Shawnee council indicated last night that it wants to enter a separate development agreement with Bach Homes.
Further city requirements, protest petition could delay project past April
The council discussed making requirements to ensure the project will actually be developed, such as whether the city will allow pay-as-you-go financing, remove the sunset of bond issuance, or even issuing a junior series of bonds in the event the TIF funds run out or the project doesn’t generate enough bond revenue.
Councilmember Mickey Sandifer asked if adding more requirements could further jeopardize the project from being developed in Shawnee. Serrano said “that would be a fair statement.”
Next week, the council will consider calling a public hearing for the new TIF plan. That public hearing would take place Feb. 25. The new TIF project plan includes about 157,000 square feet of retail/commercial/restaurant space, 249 residential units; and infrastructure improvements including construction of 66th Street from Maurer Road to near the western property line.
Negotiations could have possibly delayed the project past the anticipated start date in April, Serrano added.
Meanwhile, the city received a protest petition last month from the owners of five neighboring properties who say the developer has violated the city’s zoning laws. They say the development is designed to be too tall, too dense in population and physically too close to their homes on Bell Road.
Two of the neighbors, Don Lysaught and Alan Godsy, have indicated that they will drop the petition if the developer adjusts the project to meet Shawnee’s zoning laws. Greg Musil, an attorney representing the developer, said Bellmont project leaders have agreed to a revised plan submitted by the neighbors, and the project will be slightly adjusted.