Thursday, Sep. 27 2012 5:06PM
Tax break recommended for Stanley
City Council has final decision
By Russ Pulley
A $1.6 million project to expand the Stanley Historic Event Space has gotten endorsement for tax abatement from the Lee’s Summit’s Land Clearance for Redevelopment Authority.
Stanley owner Bryan King was seeking recommendation for 10-year property tax abatement for the project, contending the expected rate of return was 8-9 percent, when a recognized goal for such real estate investments is generally 15 percent. The authority voted to recommend five-year abatement to the City Council.
The authority met Sept. 26 to consider merits of requests by King and another property owner at Third Street and U.S. 50, who approached the authority with the idea of a break for their renovations, but hadn’t yet made a formal application.
The authority is making plans for redevelopment areas where it could offer incentives for redevelopment in other older shopping areas such as Third and 50. Those proposals are just now in the beginning stages.
Chairman Keith Asel said the authority heard, when given its mission by the council that it was to be careful in recommending tax abatements, that tax breaks shouldn’t be “automatic.”
“We’re trying to be very responsible in applications of that,” Asel said.
Troy Pfeifer, am authority member, agreed.
“We want to bring the city council something they’d work with,” Pfeifer said. “Instead of them thinking we’re bringing them everything under the sun.”
Because the Third Street building’s renovations are nearly complete, authority members said they doubted it meets the expectations of the council. The authority voted not to support tax abatement for that building.
The authority did, however, agree a level of support is appropriate for the Stanley.
Christine Bushyhead, attorney for King, told the authority that he went ahead with getting approval of the Stanley project’s construction plans because of doubts of when and where authority’s redevelopment district would be in place, but had been considering the abatement during that process.
She said Missouri statutes allowed the city to grant the abatement even though the project’s development plan has already been approved by the city council. The council would have to approve the abatement as well.
Bushyhead presented financial estimates that projected the Stanley would reach the 15 percent standard by about its fifth year of operation and hitting nearly 19 percent in 10 years.
She said the project was a good example of an “organically grown” business by a Lee’s Summit family willing to take a risk with a lower margin because of their belief in the community. The abatement would send a message to other local business owners considering expansion and would help reduce the King’s risk as it expands business.
“It will have a better chance of being successful,” Bushyhead said.
Bushyhead said the Stanley project would be a good model for the kind of project sought by the LCRA.
It is an redeveloping under-used parking lot with a new, building with high quality standards for architecture inside and out.
“The Stanley brings people to Lee’s Summit,” Bushyhead said. “There’s a positive energy to it, to see wedding couples standing outside, you have to smile.”
Those visitors often also book rooms at hotels and eat in Lee’s Summit.
Asel said he’d hesitate to recommend the full 10-year abatement.
“There could be a negative response that affects not only this project but has a future affect,” he said. He moved to recommend a five-year tax abatement to the city council, and the authority voted to approve it.
“We appreciate this level of support,” Bushyhead said. “It gives us some breathing room.”