The Merriam City Council on Monday approved an extension for several entities affiliated with Kansas City-based Block and Co. to pay more than $650,000 in delinquent property taxes on the former Kmart site at Shawnee Mission Parkway and Antioch Road.
Why it matters: The unpaid taxes are holding up redevelopment of another nearby property, the former Taco Bell across the street at 8800 Shawnee Mission Parkway, which developers want to turn into a Chipotle.
The details: The three entities that own the long-vacant Kmart property at 8703 Shawnee Mission Parkway — listed in county property records as Three Trails Two LLC, 119 Metcalf/Windsor LLC and Merriam Corner LLC — failed to pay the taxes by a city-imposed deadline of June 1.
- Failure to pay the taxes meant a redevelopment agreement for the former Taco Bell site was also breached.
- As a result, the city has not disbursed $150,000 worth of tax incentives to another Blok-affiliated entity, Merriam North Bell LLC, for the Taco Bell redevelopment.
What’s new: An agreement approved Monday by the city council in a 7-1 vote amends the city’s original Jan. 24 redevelopment agreement with Merriam North Bell LLC, decreasing the proposed tax incentives for the Taco Bell redevelopment from $300,000 to $250,000, according to city documents.
- Half of that $250,000 will be disbursed to the company when the taxes on the Kmart property are paid and current.
- Merriam North Bell LLC must also adhere to five civic involvement tasks, such as making an annual contribution of $5,000 for Merriam recreation scholarships and be “a financially contributing member of the Shawnee Mission Education Foundation” of at least $5,000.
‘An honest mistake’: David Block, the principal and president of Block and Co., told the city council on June 13 that he knew about the June 1 deadline “back when it was agreed upon.”
- An email between Mitch DiCarlo, Block and Co.’s director of development and construction who represented Merriam North Bell at a previous city council meeting, said confusion led the Kmart owners to believe the deadline was actually Aug. 1.
- When Councilmember Whitney Yadrich asked Block on Monday why there was confusion about the deadline being Aug. 1 when it was actually June 1, Block said “it was an honest mistake.”
- Block said the entities that own the Kmart site do not have the income to pay the property taxes on the site.
- Additionally, Block told Yadrich it’s “fair” to say the Kmart owners were relying on the sale of the site to Overland Park-based developer Drake Development in order to pay the taxes.
Key quote: “There’s almost a sense of entitlement, because you’ve done so much for Merriam, that you can ignore paying your taxes — or your investors can ignore paying your taxes,” Councilmember David Neal said to Block. “I find that somewhat offensive.”
Who owns these properties? Block himself on Monday insisted that he doesn’t own the Kmart or Taco Bell sites, but he did go so far as to say to the city council that he is one of the several partners “in some of these deals.”
- He confirmed he is a partner in Block DM Investment, which records at the Kansas Secretary of State’s office show is a member owning 5% or more of capital in both 119 Metcalf/Windsor LLC and Merriam Corner LLC, two of the entities listed as owners of the former Kmart site.
- Kansas Secretary of State records also show Block is personally a member who owns 5% or more of capital in Merriam North Bell LLC, the entity that now owns the Taco Bell site and is seeking tax incentives for its redevelopment.
- Three Trails Two and Merriam Corner LLC, two of the entities that own the Kmart site, share an address with Block and Co.’s Kansas City, Missouri, offices.
Background: The city council included the June 1 delinquent tax deadline as part of the Taco Bell redevelopment agreement to pressure the entities that own the former Kmart site to pay their property taxes, which have gone unpaid since 2018.
- Additionally, the city council did not want to offer incentives to a company tied through Block and Co. to the Kmart site with delinquent taxes on the books.
- Developers intend to turn the now demolished Taco Bell into a Chipotle.
- The city council is scheduled to consider a redevelopment project for the Kmart site with Drake Development at the June 27 city council meeting.
- Read the Post’s timeline of the Kmart property history here.