Lee’s Summit agreed to give RED Development $18.5 million in tax subsidies for the Summit Place shopping center, a $73 million project to be built near U.S. 50 and Interstate 470.
In a 5-3 vote, the Lee’s Summit City Council on Thursday approved a tax-increment-financing contract with RED. Council members Bob Johnson, Derek Holland and Dave Mosby voted no.
Jeff Haney, vice president of development for RED, said the company is very pleased to have the TIF contract so it can seek loans construction financing and preparing designs.
The city will not be responsible for that debt.
“It’s been a long time in the works,” Haney said, adding that city staff was excellent to work with while negotiating the complex agreement.
Steve Rich, of Townsend Capital, a partner with RED providing land for the project, said the shopping center adds momentum to efforts Townsend is devoting to projects it wants to bring to another 100 acres nearby. “We’re very excited about the future,” Rich said.
The contract approved by the council spells out terms of reimbursement the city will give to RED once the shopping center opens.
The council also, 5-3, voted to change zoning to permit its construction, but later will vote on activating the TIF for Summit Place, once RED has obtained financing and goes through city approval for its design, so is closer to construction. The votes essentially mean the city has approved the project.
Summit Place will be near RED’s other Lee’s Summit retail centers, Summitwoods Crossing and Summit Fair.
The council meeting was sometimes contentious.
Dissenting members criticized the amount of the subsidy, contending the city shouldn’t help the developer with some costs, such as build stores.
Holland said City Manager Steve Arbo “failed miserably” negotiating the contract.
Arbo said that given the realities of the retail market at this time, the amount of subsidy RED requested is necessary.
“If I truly believed they needed less than $18.5 million, I would have tried to get there,” Arbo said.
Holland asked Arbo if this would be the precedent for the city.
Arbo said that he didn’t consider the agreement with RED as setting the city’s policy on subsidies. He said a developer of a future project would have to justify the amount of a request by the circumstances of that particular proposal.
Holland didn’t see it that way.
He said the vote was the council’s “last shot” and sets expectations for the future.
Councilwoman Diane Forte chided Holland for his comments to Arbo.
“You ought to be ashamed of yourself,” Forte said. “It looks bad and I’m done with it.”
Holland replied he was taking Arbo to task for his position, it wasn’t personal. He added he wouldn’t be silenced.
Holland said he doesn’t feel animosity toward RED. “They’re a business, they’ll come get the best deal they can possibly get, and they’ve done a great job of it,” he said.
Holland and Mosby also griped that the anchor tenant for Summit Place is to be a Sam’s Club. They said the city should have a higher standard for that piece of real estate.
Forte said she shop’s at Sam’s Club. She said she would prefer to spend her money in Lee’s Summit instead of driving to Belton and other residents would too.
The council indulged in some bickering over whether the dissenting members should continue raising arguments heard in earlier meetings.
Mosby implied newer council members weren’t up to speed on the project. Newly-elected members Forte, Trish Carlyle and Diane Seif fired back that they’ve done their homework. They said opposing members should have made a decision on the TIF before the April election, when they had the opportunity.
Carlyle said she “studied up big” on the project.
She said RED has previously worked with the city on several major projects and knew what the city’s expectations would be. “Maybe they came in with the bottom line,” she said.
Sam’s Club would provide needed jobs and shopping for the community, even if it isn’t the high-end jobs council members also want to draw to the city.
“When I first looked at it, I didn’t like it at all,” Carlyle said. “The ultimate good for the city is to make it work.”