Archive for Tuesday, January 29, 2013

Council sets hearings for shopping center incentives

January 29, 2013

The Shawnee City Council voted unanimously Monday to set March 11 public hearings regarding two types of incentives requested for the proposed redevelopment of Shawnee Parkway Plaza, a stagnant retail center southeast of Shawnee Mission Parkway and Pflumm Road.

The governing body, minus Ward 3 representative Dawn Kuhn, who was absent, voted to set the hearings without any council discussion of the $16.5 million project.

But resident Ann Norbury, speaking from the floor, had plenty to say about the proposed use of a transportation development district, or TDD, which would allow the sales tax rate paid by Shawnee Parkway Plaza shoppers to be raised by 1 percent for up to 22 years. Proceeds from the surcharge would go toward transportation-related project expenses, including the realignment of Midland Drive in front of the center and creation of a new signalized entrance road off Shawnee Mission Parkway.

Norbury said she opposed the TDD because the sales tax is a regressive tax, meaning its burden falls disproportionately on the poor. She also said the additional tax would be unfair because it would benefit only one property owner, Christie Development Associates LLC, which is planning to acquire and redevelop the shopping center.

“I’m happy to pay taxes for the common good,” Norbury said. “But this extra sales tax does not meet the common good criteria.”

Norbury added that the impact of the proposed sales tax increase would be exacerbated by Gov. Sam Brownback’s proposal to make permanent the 6.3 percent statewide sales tax that had been scheduled to drop to 5.7 percent this year.

She also questioned the proposed 1 percent TDD tax rate, noting that the City Council had pared to 0.5 percent the 1 percent sales tax surcharge requested for the redevelopment of 10 Quivira Plaza two years ago.

During a Jan. 14 City Council discussion about the Shawnee Parkway Plaza project, Norbury had also voiced opposition to Christie Development Associates’ request for tax-increment financing, or TIF. It would allow increases in sales and property tax revenue generated by the planned improvements to be diverted to eligible project expenses for up to 20 years.

Maureen Rogers, city finance director, said the developer’s plan includes $9.4 million in TIF-eligible costs, of which the developer is seeking $7 million through TIF and the TDD. The $7 million includes $3.75 million for financing of the Midland realignment, traffic signalization and other public improvements.

During the Jan. 14 council meeting, the City Council was presented with a study that determined the 16-acre shopping center site is currently blighted, a statutory condition that must be met before TIF can be approved for a project. Another study presented during the meeting found that, with the requested incentives, the developer could expect a 10 percent rate of return, which falls within the range of 6.5 percent to 12.5 percent for strip shopping center projects nationwide. Without the incentives, the study found, the rate of return would be 0.74 percent. At that rate, Kuhn said, the project “is not going to happen.”

Councilman Jim Neighbor said during the Jan. 13 meeting that he supported the redevelopment project because it would attract new tenants and help build the city’s commercial tax base, which currently accounts for only about 27 or 28 percent of city tax revenue.

While there was no council discussion of the TDD and TIF hearings approved Monday, the issue was broached by the council during subsequent discussion of Ward 1 representative Dan Pflumm’s wish to limit payday loan facilities in Shawnee.

According to Ward 3 Councilman Jeff Vaught, a commercial broker, such uses are gravitating to older shopping centers in the city due to their low lease rates. The best way to reverse that situation, he said, is to approve projects like the Shawnee Parkway Plaza redevelopment, which will lead to higher lease rates and more upscale tenants.

In other action during Monday’s meeting:

• Resident Ray Erlichman chastised the city for spending more than $15,000 to send eight representatives — the mayor, the city manager and six City Council members — to a National League of Cities conference last November in Boston.

“Shawnee likes to compare itself to other cities,” Erlichman said before reciting the totals sent to the conference by neighboring municipalities: Lenexa, six; Olathe, five; Overland Park and Merriam, two each; and Mission, one.

Erlichman said he thought it was unreasonable to send more than four representatives to such conferences. He also suggested that the city do “what corporate America does” to save money on such events: double up on rooms.

Paying for four rooms for the eight representatives, instead of four, would have saved the city about $1,000 a night. But that was precluded by the fact that four of the Shawnee representatives brought along guests. The city did not pay for those guests, he said, but the guests prevented the savings from housing two people per hotel room.

Erlichman’s comments elicited no response from the City Council.

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