Archive for Tuesday, March 12, 2013

Shopping center project bags $7 million in incentives

March 12, 2013

The Shawnee City Council approved $7 million worth of incentives Monday for a $16.5 million project to redevelop the Shawnee Parkway Plaza retail center at Shawnee Mission Parkway and Pflumm.

After a handful of residents spoke against the tax breaks, the council voted nearly unanimously.

The vote was 7-0 in favor of $3.25 million in tax-increment financing, or TIF, which will redirect new taxes generated by the project toward reimbursement of the developer for eligible costs for up to 20 years.

The only “no” vote, Councilman Neal Sawyer’s, came during a separate, 7-1 vote on the other incentive, a transportation development district, or TDD. It will allow collection of a 1 percent sales tax surcharge, to be paid only by shoppers at the center, for up to 22 years. The proceeds will be used to repay bond financing for $3.75 million worth of public improvements associated with the project. They include realignment of Midland Drive, which serves as a frontage road for the center, and a new signalized entry into the center off of Shawnee Mission Parkway.

Sawyer, who also voted against a 0.5 percent sales tax surcharge to improve 10 Quivira Plaza two years ago, said one reason he opposed the TDD surcharge was that by the time it lapses, the center may well be in need of redevelopment and incentives again. In addition, he said, the precedent being set at 10 Quivira Plaza and Shawnee Parkway Plaza means “we will never develop another shopping center without it.”

Councilman Dan Pflumm, however, voted for the surcharge, ending his record of having never supported a city tax increase during 11 years on the council.

“I don’t see how I couldn’t support it, ...” said Pflumm, who noted that the TDD would correct design and access issues that have made tenants scarce since the center opened. “And it’s been an eyesore for 14 years,” since a Price Chopper moved out.

Pflumm did express reservations, however, about giving incentives to a project that will add another hardware store to the community. The project is being developed by Shawnee Parkway Redevelopment LLC, which includes two principals of Christie Development Associates and Scott Westlake of Nuts and Bolts True Value Hardware.

Mike Unterreiner, owner of Hartman Hardware, said the new Nuts and Bolts coming to Shawnee Parkway Plaza will “cannibalize” business from local competitors, which may create vacancies and the need for tax breaks elsewhere in the city.

“I’m afraid we’re setting a pattern,” Unterreiner said. “How many TIF districts can we create?”

Shawnee resident Mike Chapman said the new tax-break “euphoria” of city and chamber of commerce officials needed to be balanced by studies that have revealed that incentives, particularly for retail projects, generally don’t pay the promised, down-the-road dividends to taxpayers.

Councilman Jeff Vaught responded that equal numbers of pro and con incentive studies could be produced. He placed more weight on a recent citizen survey that showed overwhelming support for the use of incentives to attract new local shopping options such as the Natural Grocers that is coming to Shawnee Parkway Plaza. A PepperJax Grill also has also committed to the project, and other new restaurants are expected to be announced soon.

As a condition of getting the incentives, the developers have agreed that tenants that are new to the city or opening an additional Shawnee location at Shawnee Parkway Plaza must make up 90 percent of the initial tenant lineup in the redeveloped, 101,000-square-foot center.

While most taxes generated by the new tenants will be diverted from city coffers for several years, Councilwoman Dawn Kuhn said the city’s 1/8th sales taxes for public safety and for stormwater and park improvements will not be diverted under the incentive plan approved Monday. In addition, she said, the incentives will stem the decline of property tax revenue from the center, which will continue to be paid at the present rate. And when the incentives lapse, she said, the city tax rolls should get a significant boost, as has been the case with projects, like the Bayer and Simmons developments, which received tax abatements years ago.

Some day, Kuhn predicted, local taxpayers will look back and thank the current council members for having similar foresight in approving the Shawnee Parkway Plaza incentives.

Councilwoman Michelle Distler also voted for the incentives but said inadequate metrics for measuring taxpayer benefits from tax breaks had been a “bur in my saddle.”

“I want proof that what we’re saying these incentives do they (actually) do,” Distler said.

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