Mission approves framework of plan that could see construction start at Gateway site this spring — but TIF and CID deals still unsettled

Jay Senter - December 22, 2016 8:16 am
Developer Tom Valenti at a community meeting earlier this year.
Developer Tom Valenti at a community meeting earlier this year.

By Jerry LaMartina

It appears that construction crews may at last be heading to the Mission Gateway site in the coming few months.

At its Wednesday night meeting, the Mission City Council unanimously approved a memorandum of understanding (MOU) with the developer for the three-phase, $162 million project. The Shawnee Mission Post reported Monday that developer Tom Valenti of Cameron Group LLC, based in East Syracuse, N.Y., and the city had negotiated a tentative agreement on an MOU for the project, which has languished for the past decade.

If all approvals occur, construction could start by March 31, with final completion anticipated by spring 2019.

“I know we as a council are very much encouraged and looking forward to it, and all of Mission is looking forward to getting this started, and we are ready,” Mayor Steve Schowengerdt said.

An MOU is a non-binding agreement that serves as a blueprint for final, detailed negotiations. Mission officials say they will consider incentives for the project, including tax-increment financing (TIF) and a community improvement district (CID). No dollar amounts are included in the MOU, but it proposes the city approve 20-year TIF plans for the project and would allow the developer to be reimbursed with proceeds from the new or incremental property taxes, sales taxes and hotel guest taxes generated.

Valenti said before the meeting that he didn’t know yet what the dollar value would be for the project’s TIF or CID. He told the council that “the reason that we’re asking you to enter into this memorandum of understanding is because I think it’s important for all of us to get this project started.”

“What we’ve proposed is … that we would take the risk of starting the project with the small-store retail and the apartments above them along Roeland Drive and Johnson Drive without your needing to enter into any TIF or CID agreement,” Valenti said. “We can separately finance that with bank financing and our own money. Now, needless to say, we’ll find ourselves further in the hole, but I think you should look at that as encouragement that we will carry through the project through the two subsequent phases.”

The project’s phases and timetable, as reported earlier this week, would be:

  • Phase 1: Construction of 50,642 square feet of “small shop” commercial and restaurant uses beneath 168 apartments along the Johnson Drive/Roeland Drive corridor. Phase 1 work would begin by March 31 and be completed by April 30, 2018.

  • Phase 2: Construction of a 1,700-space, three-level garage to serve the entire project and a 200-room Aloft and Element hotel with a 15,624-square-foot restaurant. The second and third phases would start in the fall of 2017 and be completed by spring 2019.

  • Phase 3: Construction of about 110,000 square feet of “junior-anchor/‘big box’” commercial and retail space. The retail would be located where a Walmart originally had been planned at Johnson Drive and Roe Avenue. Walmart dropped out of the project in early October.

The MOU also calls for office construction at the Mission Gateway development should market demand arise.

“One of the retailers that we’ve been working with told us they’re going to their site-development committee in mid-January and real estate committee at the end of February, so I think that’s a great sign,” Valenti said. “That’s the largest of these potentially three retailers. … I don’t want to say the name until we get the approvals.”

Valenti said his company’s “goal has been that these three phases merge, that you really won’t see any lag time between the phases, and I think they will come on board more or less at once.”

“Whether it’s the public, the tenants, the banks—everybody needs to have confidence that this project is going to happen, and we need to come out of the ground to give them that confidence,” he said.

The CID would allow the developer to levy a 1-cent additional sales tax over 22 years. Those revenues would be used to help pay for the project. The developer also is asking for a sales tax exemption on construction materials for each phase of the project.

The MOU also calls for the revenues from the incentives to be received on a “pay-as-you-go” basis as they are generated to repay eligible development costs. And it says the city may be asked to consider issuing a special obligation bond that would be repaid by the incentive revenues. The city would not be asked to back those bonds with its credit.

The city’s land-use attorney, Pete Heaven of Lathrop & Gage, said Valenti had approached the city about three weeks ago to explore an MOU. The city had signed a pre-development agreement in 2005 with the project’s original developer to ensure that the city would be reimbursed costs for consultants and other expenses, and Heaven asked that the council make the signing of the MOU contingent on transferring that agreement to the new developer “so we have a continuous stream of reimbursements for our expenses.”

“I’ve said this to the council and the members of the public before: I promise I will not let you down,” Valenti said.

The Gateway site has languished for years.
The Gateway site has languished for years.

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