Lee’s Summit approves tax-abatement for small downtown redevelopment

rpulley@lsjournal.comOctober 16, 2013 

A new clinic in downtown Lee’s Summit can go forward with property-tax abatements.

The Lee’s Summit City Council on Oct. 10 agreed to tax breaks for a $759,800 redevelopment of the southwest corner of Third and Market streets. Craig Grider, a Lee’s Summit orthodontist, plans to demolish a former gas station and build his new 3,000 square-foot-clinic there.

The endorsement was half-hearted, with several members voicing discontent over items submitted as costs justifying the tax abatement.

The vote was 5-3, with Kathy Hofmann, Bob Johnson and Ed Cockrell voting no.

Several argued for a lower abatement than was recommended by the Land Clearance for Redevelopment Authority.

Cockrell, Bob Johnson and Derek Holland were ready to shave away some of the $141,000 of tax abatement offered by the LCRA.

Grider would continue to pay about $3,000 in property tax now collected on the parcel and would pay about $6,000 each year for personal property tax there when his clinic opens.

The council members said they want to support redevelopment, but also had to answer to taxpayers who are concerned about city subsidies.

Councilmember Allan Gray defended the recommendation, noting a banker, several developers, builders and a member from the Lee’s Summit Economic Development Council are on that board.

“We’re just shooting from the hip right now,” Gray said. “I’m concerned about doing that with a project of this importance and of this nature. We’re teetering on the edge of losing a project.”

Gray said he’s also is worried about how the council continues to send messages to businesses that their projects will be “whittled” by the council after its been through city staff and other boards. He said the city needs to put its policies in place “ahead of the game.”

Cockrell, although he wanted to cut the abatement, agreed the council needed to set some policies before the next project comes in the front door.

Council member David Mosby apologized to Grider because the council hasn’t set its policy, and so it falls back to negotiating during meetings.

“It’s biting us in the rear right now,” Mosby said. The Community and Economic Development Committee, which he chairs, is working with staff and the Lee’s Summit Economic Development Council to draft such policies.

Council member Brian Whitley said he thought the council should accept the LCRA recommendation or slightly less.

Cockrell said that Grider should have considered environmental remediation for the former gas station as part of the land price. Cockrell said he thought the $140,000 purchase price was a bargain.

He also questioned why the project should get 100-percent abatement for the costs of meeting design standards instead of 50 percent.

“I’ll grant the brick and the roof,” Cockrell said. “So I’m sitting at $60,000 bucks, 25-cents on the dollar, and that’s it.”

Keith Asel, chair of the LCRA, shared that board’s reasoning with the council, in response to member’s questions.

Asel, a banker, said that given market rents in the area, no redevelopment would reoccur without abatement. He said the fact that Grider would own and occupy the building made the project more feasible, but even that wasn’t enough to offset the extraordinary development costs under the new downtown architectural standards.

He said the LCRA was following what it thinks was the City Council’s consensus to make the downtown area competitive with a “green field” development, such as abatement for environmental remediation.

Johnson said he’d support abatement for environmental remediation, a number he thought should be $67,400. But he grumbled that the project would not bring significant new jobs to the city.

Holland said he thought environmental costs and 50 percent of cost of upgrades to meet new standards were appropriate, because those standards were adopted midstream in Grider’s application to the city.

Grider estimates those costs added $84,000 to his project. As construction goes forward, he’ll have to submit actual costs to qualify for the tax abatement.

Hofmann objected to the nature of Grider’s project, because it isn’t a two-story building with retail space and was skeptical of any future development there.

“We’re not going to see anything else on this corner,” she said.

Grider has said he would like to expand the building toward Market Street, including retail space, if it becomes economically viable.

Holland had the same issue as some LCRA members regarding where to draw lines. He asked, “Are we going to do this for every project that comes along in downtown?”

Downtown is a destination that has characteristics that will also draw businesses, which are supported by the standards.

“It does go both ways, downtown has some unique reasons people will want to come downtown,” Holland said.

Holland added an observation on how the council handled the application.

A former state legislator, he said in Jefferson City deals often are worked out privately often without public debate.

“Sometimes it looks like what were doing is bumbling,” Holland said. “It is a product of open government. It shows we didn’t sit down behind closed doors and make a decision.”

Mayor Randy Rhoads asked that Gray assign a council committee to draft a policy for LCRA abatements. Gray, who as mayor pro-tem appoints council committees and assigns issues to them, agreed he would.

“I don’t want this to come up again with the next application,” Rhoads said.

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