Merriam City Council gets first look at new $136M concept to remake former Kmart site

Merriam Grand Station Kmart redevelopment

Drake Development is now dubbing their project at the former Kmart site as Merriam Grand Station, centered around restaurants and two apartment buildings. The rendering above is looking southwest from Shawnee Mission Parkway and Antioch Road. Image via city documents.

The Merriam City Council on Monday got its first look at a development concept that could remake the abandoned Kmart property on Shawnee Mission Parkway.

After some uncertainty over the property’s future, Overland Park-based Drake Development appears to be holding steady on its plans to turn the long-vacant lot into a mixed-use development.

But several more steps must occur before any plans for the prominent site are finalized.

What’s new? Dubbed Merriam Grand Station, the $136 million development includes the following, as outlined by city staff on Monday:

  • 10,000 square feet of restaurant and retail space, including two restaurants and three commercial buildings
  • 10,000 square feet of civic space and additional restaurant space, for a total of five sit-down restaurants
  • 200,000 square feet of residential, or more than 300 individual units in two separate apartment buildings
  • A parking structure similar to the one currently at the Merriam Community Center
  • A possible transit stop on Eby Street, if needed as determined by Johnson County Transit
  • City access to the right-of-way along Shawnee Mission Parkway and Antioch Road for moving utilities underground

This plan has not yet been formally submitted to the city and is still subject to change, Merriam’s Community Development Director Bryan Dyer told the city council on Monday.

Merriam Grand Station civic space
The civic space is located near the two restaurants nestled between two apartment buildings. The rendering above is looking northeast, toward Shawnee Mission Parkway and Antioch Road. Image via city documents.

Incentive changes: Drake is requesting tax increment financing, or TIF, as well as industrial revenue bonds, or IRB, to reduce the sales tax on building materials, according to city documents.

Additionally, the developer’s request for an IRB for a 10-year property tax abatement on the two apartment buildings means those buildings could not be inside the boundaries of Merriam’s Interstate-35 TIF district.

Merriam City Council on Monday unanimously approved an ordinance removing the two buildings from the TIF district.

This ordinance will not go into effect until the project’s final plat is filed with the county, which city staff describes as an “off ramp” in the event that Drake’s plans fall through.

Following city council discussion in a work session on Monday, city staff will negotiate a green construction factor of sorts — potentially International Energy Conservation Code thresholds — for the project.

City staff is still in the middle of redevelopment agreement negotiations, but approximate costs as outlined in city documents are below.

  • $25 million TIF reimbursement disbursed from years three to 10, dependent on the developer meeting certain benchmarks. A “pad ready” site is the first benchmark and needs to be met by Dec. 31, 2023, in order for the developer to receive the first TIF disbursement on July 1, 2024.
  • $4.5 million in sales tax IRBs for exemptions on materials, and $4.5 million in property tax IRBs for the 10-year abatement.
  • $400,000 in waived city development and city inspection fees, though the developer will pay 100% of costs associated with third-party inspections.

Background: Nearly a year ago, city staff confirmed Drake was likely to submit a TIF application to the city for the Kmart site. The city expanded its I-35 TIF district in June 2021 to include the site, opening the door for a potential redevelopment agreement with any developer.

Drake told the Post in December an application for a mixed-use development was on its way.

After the city council pressed the developers on the Kmart property’s unpaid taxes, Drake did finally submit a TIF plan for the site in February detailing a development plan that included a grocery store, restaurant and residences.

About a week later, the city told the Post in a statement that it had “been unable to strike an appropriate balance with the current proposal” that helps businesses thrive and protects the city’s financial interests.

Merriam Grand Station Kmart rendering
Above, a shade structure between the two restaurants and apartment buildings near the civic center. Image via city documents.

What happens next? Here’s a breakdown of the next steps for this project, as outlined by city staff:

  • The planning commission will consider a TIF project plan on May 4. Drake Development will submit a development, rezoning and plat application the same day.
  • The city council will consider setting a public hearing date at its May 9 meeting.
  • The following day, on May 10, there will be a city council and planning commission work session.
  • Drake Development will meet with neighbors on May 11.
  • The planning commission will hold a public hearing on the development applications on June 1.
  • The city council on June 27 will consider a TIF project plan hearing and adoption, a redevelopment agreement, and a rezoning, preliminary development plan and plat for the redevelopment of Kmart.

Key quote: “Since I’ve been on council, which has been a long time, what people have said to me is ‘We want nice, sit-down restaurants,’” Councilmember Christine Evans Hands said. “We are giving them that, we are giving them something they specifically ask for.”