The Lee’s Summit City Council agreed unanimously on a development plan for a $20 million project including a new Price Chopper at Todd George Parkway and U.S. 50.
But it split on providing nearly $5 million of subsidies to finance part of the improvements.
Mayor Randy Rhoads voted yes, breaking a 4-4 tie at the Jan 24 meeting, agreeing to a plan for amending a 2007 tax-increment financing district to support the project.
Several council members said they’d support some payment to the developers, for public expenses such as off-site sanitary sewer improvements, or for a large detention basin to help solve flooding problems that already exist.
They balked at reimbursing normal development costs such as land purchase (the TIF would pay for $1 million of the $3.2 million price), landscaping, parking lot improvements and others.
Instead those council members wanted further negotiation with Ball’s Foods and West Star Co.
“I hear a common theme, no one wants to kill this project,” Councilmember Derek Holland said.
After discussion of whether the delay could close the gap, the council voted to make a decision on the TIF amendment that night.
Council members Allan Gray, Kathy Hofmann, Rob Binney and Ed Cockrell voted yes for amending the TIF; Holland, Bob Johnson, Brian Whitley and David Mosby voted no.
Before voting to go forward with the amendment, Rhoads noted that the Planning Commission and the TIF Commission both recommended approval and that neighborhoods next to the project supported it.
The council would be expected to take final votes on the ordinances at its next meeting in February.
The proposed development is in a TIF created to help finance interchange improvements for Todd George and Blackwell parkways and the outer road system.
The project on 15 acres at the northwest corner of Todd George and U.S. 50 would build:
• A 68,000-square-foot Price Chopper grocery
• 34,000 square-feet of in-line retail space
• Pad sites for a sit-down restaurant and a bank
Developers would assume the risk, getting a loan to finance the project initially and be reimbursed for part of the costs.
Sales taxes from the shopping center are anticipated to produce about $24 million in sales taxes over the next 23 years, the life of the TIF.
Half of that, about $11.9 million, would be captured by the TIF to be used on interchanges at Todd George and Blackwell and outer roads, and for reimbursing the developer.
About $5.2 million in payments based on increased property value would be made to the TIF district.
A community improvement district would levy a half-cent sales tax in addition to city and state sales taxes, raising about $3.5 million that would be shared by the city and developer. The school district would get $1.8 million.
Reimbursement to the developer from the TIF and CID for development costs are to be capped at nearly $5 million.
The original TIF plan called for medical offices in that location, along with Lee’s Summit Medical Center farther south and other projects. The medical offices were never built.
A consultant hired by the city reported to the council that the subsidies were needed to give the developers a reasonable return on investment and the project wouldn’t happen in today’s economic climate without the subsidy.
Karen Traxel, a resident of the Silkwood Estates subdivision, told the council that the developer had worked hard with adjacent neighborhoods to answer residents’ concerns. They dropped one pad site from their plan to make room for a larger storm-detention system to help prevent flooding that came from the watershed south of U.S. 50. They changed design of a retention wall to provide better landscaping and protect views from the neighborhood.
Traxel said she thought of many of the development features as necessary to protect the neighborhood property values.
“I never thought of them as private,” Traxel said. “Any money that goes to the detention basin is improvement for our neighborhood.”
Johnson said he thought the developers should pay more of their own costs for expenses such as landscaping.
“Why should you be given preferential treatment over another business?” Johnson asked.
Johnson and Cockrell agreed that the decision needed to be made at the council level and not sent it to the TIF Commission.
Johnson proposed a one-week delay to give city staff time to negotiate with developers and bring the results back to the council. Cockrell argued that developers couldn’t adjust costs enough satisfy critics.
Cockrell commented that on big TIFs costs were shifted in a “shell game” and he appreciated the honesty of this proposal.
“I’m satisfied with the general math,” Cockrell said. “The argument that we’re really paying for storm water improvements is valid.”
Gray asked what other options does the city have for fixing the flooding, and city staff said there were no funds at this time. Gray said that with the economic downturn “nobody is sitting on the sidelines waiting to get into the game.”
Binney said that this was not the time for the city to be picky.
“Sometimes you have to spend money to make money,” Binney said.