Lee’s Summit City Council approves more apartments at New Longview

rpulley@lsjournal.comApril 9, 2014 

The Residences at New Longview won solid support from the Lee’s Summit City Council which approved the $35 million project without dissent.

The council voted 7-0 April 3, with David Mosby absent, for the project’s preliminary development plan and for a Chapter 100 plan that will dictate the amount of taxes paid by the project for the next 11 years.

NorthPoint Development plans to build 309 luxury apartment units, in seven, four-story buildings of Craftsman style architecture, with stone and lap siding just east of Metropolitan Community College-Longview and south of existing apartments.

“The quality is the highest quality we see here in the Kansas City area, or across the nation,” said Mark Pomerenke, vice president of operations for NorthPoint Development.

Under the financial agreement with Lee’s Summit and NorthPoint Development, the city would technically own the project for 11 years and issue bonds for construction, with NorthPoint Development making “payments in lieu of taxes.” Once constructed, the assessed value of the property rockets from about $45,584 to $3.24 million. The developers will pay nearly $289,000 in property taxes until 2021, then the payment goes up to just over $296,000 for several years. The city, schools, libraries and other taxing agencies will receive their usual split of the total payments.

The council asked for some clarifications before approving the project.

Councilman Brian Whitley asked what the impact of the apartments might be on Longview Elementary School.

NorthPoint officials said they had counted school-age students in two of their comparable properties (Briarcliff in Kansas City and Burlington Creek near Parkville). They expect about 20 students from the project, compared to about 60 form the single-family housing in the New Longview subdivision.

David Gale, the original developer of New Longview subdivisions, said approval of the apartments would be a boost to commercial projects in the area and with little impact on schools.

“This is found money, virtually no kids,” Gale said.

Councilman Rob Binney asked if the number of multifamily residential permits was affecting the Historic Preservation TIF for Longview Farm.

Conrad Lamb, the city’s finance director, said it uses up available permits, additional residential construction triggers clauses of the TIF.

“Anything beyond this requires more historic restoration,” he said.

Councilman Derek Holland asked if there is risk to the city. Lamb said there is none, noting that lenders who buy the bonds would typically take over the property if it struggles.

After 11 years, the city deeds the property back to NorthPoint Development and the property goes back onto the tax rolls.

The project also would have the advantage of avoiding sales tax on materials for construction.

Councilman Ed Cockrell wanted assurance the council’s action wasn’t using incentives to residential project such as tax-increment financing.

City Manager Steve Arbo said the city and schools are not seeing a diversion of revenue under the plan but instead it gives the developer and city a predictable amount of taxes that will be collected from the project.

“You’re encouraging a high-quality development and locking in revenue,” Arbo said.

Arbo said that if the project went on tax rolls as usual (without the agreement) the developer could face increased assessments in future years, or could appeal assessments seeking to lower its taxes. The Chapter 100 plan takes out that risk for both parties, Arbo said.

Cockrell said he didn’t want to set a new policy as one of his last actions on the council.

“It’s unique, I understand it and I’m going to vote for it,” Cockrell said.

Councilman Allan Gray said it was exciting that the city was using a new twist for Chapter 100 and industrial development revenue bonds.

“It does lay a foundation ... of how we can responsibly use tools,” Gray said.

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