Leawood signals general support for CID, 1 percent sales tax increase for Ranch Mart North redevelopment

The Ranch Mart North shopping center is slated for a $47 million redevelopment — and likely at 1 percent sales tax increase.

Leawood City Administrator Scott Lambers on Monday told members of the council that he supported an application from the Regnier family, owners of Ranch Mart North, for the creation of a community improvement district there that would increase sales tax to pay for a portion of the redevelopment of the center.

Under the terms of the draft agreement presented at a council work session, a 1 percent sales tax would be added to all transactions at the Ranch Mart North stores — including the Price Chopper grocery store — starting in either the summer or fall of 2020.

The shops’ ownership would have access to reimbursements of up to $13.45 million from that additional sales tax to cover certain costs from the redevelopment. The redevelopment is projected to cost $47 million, so the reimbursable expenses under the CID would amount to 28.7 percent of the total cost. The tax would be in place for a term of 22 years.

The Ranch Mart North CID agreement is much like the agreements approved by the city of Prairie Village in 2010 to spur the redevelopment of Corinth Square and the Village Shops.

The redevelopment plan submitted with Leawood calls for a massive modernization of the center’s façade as well as the construction of a new, two-story mixed use building on the land currently occupied by the former bowling alley. The plans would also lead to the creation of an open-air courtyard.

Lambers said that the request meet the requirement for the use of public finance incentives in the city’s policy, and that he believed creation of the CID would be a benefit to the city.

“In general, I would say that this application is consistent with the city’s policy and the project is something that we’ve been waiting for,” Lambers said. “Essentially, I would view it as a catalyst to not only make it happen quicker, but probably better.”

Plans call for work to be completed in about a year

Permitted reimbursable expenses would be limited to exterior improvements, including the parking lots, building exteriors, landscaping, and signage, among others. Under the proposed timeline, substantial work would begin in the coming months and be wrapped up by summer 2020.

Ranch Mart North is slated for a starkly modern redesign.

The council will need to formally adopt the CID at a future council meeting, but councilmembers indicated no serious concerns with the specifics of the application during their review on Monday, including a request to deviate from part of the city’s policy on CIDs.

Attorney Curt Petersen, who is representing the owners in the matter, told the council that both Price Chopper and Meat Mitch, the barbecue restaurant that will be going in to the former Seasonal Concepts space, needed to get to work on their spaces as soon as possible. (Meat Mitch had initially hoped to open at the center in 2018). As such, the owners requested that the official project timeline on which reimbursements would later be calculated begins with the work in the coming weeks, even though the CID won’t officially have been approved. None of the costs incurred before the CID is formally approved would be reimbursable.

Lambers also noted that the city would be keeping an eye on the state’s sales tax policy on groceries. The state increased sales tax, including on food, to shore up its budget a few years ago, a move that drew criticism from some who said the policy hit economically stressed households the hardest. Gov. Laura Kelly has indicated that she hopes to reduce food sales tax. If the state were to completely eliminate sales tax on food, however, the city would not be allowed to charge any CID tax on groceries at Price Chopper. Neighboring states Colorado and Nebraska do not charge sales tax for food. As long as any state sales tax on food remains in Kansas, though, the CID tax would still be permissible at Price Chopper.

Unlike in neighboring Overland Park, which has made extensive use of CIDs, Leawood has approved only one CID in its past: a 1 percent sales tax added to the Camelot Court shops in 2014. The city has also approved transportation development district public finance incentives at Park Place and at Town Center Crossing.