Saying it was better than having unfinished building in the heart of downtown, the Overland Park City Council approved a new set of deadlines that would partially restore some tax incentives to the Market Lofts project at 80th Street and Marty Street.
One after another, the 12 council members said they weren’t wild about a compromise that was worked out last month in committee. And they warned that if the new deadlines requiring the exterior work be done before the Farmers Market begins are not met, the city should call a default on the tax increment financing deal with developer Paul Goehausen.
However, “the ultimate goal of everybody on the committee is to get this project done,” said Councilmember Dave White, who is chairman of the council committee that worked out the new deadlines.
The developer, who has repeatedly missed deadlines for more than a year, will lose about $200,000 of TIF money no matter what happens. As it stands right now, the original $1.18 million Market Lofts would have gotten in TIF revenue has been whittled down to $771,147 because of previous missed deadlines. But if Goehausen gets the exterior done by April 15 and has the building completed by June 1, he could get a little over $933,000. Missing both deadlines would bring the TIF cap down to $624,629.
“The worry I had personally if we took everything away is that somehow or another the project would fail, we’ll have a half-built building there that’s going to be owned by the bank. And we didn’t think that’s good for anybody,” said White.
Market Lofts was the city’s very first TIF, back in 2007. But the like many other real estate developments, it stagnated during the Great Recession. It eventually got off the shelf as the economy recovered. But Goehausen has had a series of problems with it since then, including issues with the general contractor, the weather, scarcity of certain tradesmen due to the current building boom in Kansas City and issues with the codes and proximity to adjacent buildings, said City Manager Bill Ebel.
Some council members at first questioned whether relenting on some of the penalties would send the wrong message to other contractors. But the city’s only other option without the new agreement is to either let the developer have the $771,147 or call him in default, removing all TIF money, and hope he goes ahead to finish the project.
White pointed out that if the developer misses the next deadlines, the city can still call him in default. The agreement only delays things a couple of months, he said.
Councilmember Paul Lyons said he has seen progress on the building and is convinced Goehausen’s new contractor can keep his promise and finish before the deadlines.
Councilmember Curt Skoog called the agreement “a reasonable compromise to a tough situation.” The city invests tax incentives in projects that might not otherwise be done if left to the market, he said.
Several council members expressed frustration with the slow progress of Market Lofts.
“When I was in middle school and my dad first heard about this project he was very excited about it,” said Councilmember Logan Heley, tongue in cheek. “Obviously there’s been a year or two since then and it’s about darn time that we get it done.”