After three years of trying, developers for the Metcalf 108 project near Interstate 435 have been unable to find any tenants for their proposed office building.
Now they are asking the Overland Park city council to support a new public financing agreement for a revamped project centered around apartments and retail and with significantly less office space, plus some vertical parking.
A split Finance, Administration and Economic Development committee agreed 3-2 Wednesday to at least talk through some negotiations on a new financing deal. But some members warned that it may be tough going when the question comes before the full 12-member council.
Councilmember Paul Lyons suggested the developer, Metcalf 108 Redevelopment Investors, consider sustainability, affordable units or other sweeteners.
“It’ll be a tough hill to climb with the council as a whole,” he said.
History of the project
Metcalf 108 was conceived in 2015 as a way to improve the intersection at Metcalf and I-435 — seen as a gateway into Overland Park — that was once dominated by the former 435 Overland Park Place Hotel, which had deteriorated before it was closed in 2016.
The hotel was built over 40 years ago as the Rodeway Inn and had become a magnet for police calls. It was eventually razed and replaced by a six-story Staybridge Suites.
Under the original Metcalf 108 plan, the developer would have built a 150,000-square-foot office building on adjacent land that would have had a first-floor restaurant and a structured parking garage.
Public financing in the form of tax increments, sales tax exemptions and special sales tax district would have been used for various aspects of demolition, construction of the garage and infrastructure but not for the hotel.
But despite the developer’s best efforts in three years of looking, no takers have been found for the office space, said development attorney Curtis Petersen. A construction loan is not available without pre-leasing on about half of the space, he said.
“Without office tenants you cannot build a six-story office building with structured parking, whether you have public incentives or not,” he told the committee.
So a new plan was developed for the remaining 2.7 acres.
New plan, new public financing request
The developer now proposes a seven-story building with 220 apartment units, 1,773 square feet of retail and close to 10,000 square feet of small office space, a pocket park and pool.
Two stories in the structure would be for the parking garage, and the developer would have to build some 45 stalls of surface parking for the hotel.
Rebranded the “Met Apartments,” the project would still need public financing because of the extra costs of building with more density, Petersen said. But the project would not need as much public revenue.
The new project would need $11 million in tax increment financing revenues, compared to the $16.3 million proposed for the earlier version, he said. A new financing package could also bring down the percentage of the total project financed with public money from 23.7% to 18%.
Committee members were hesitant but agreed to keep talking without committing themselves wholeheartedly to the new iteration.
The intersection is a main gateway into the city from the interstate, Petersen noted.
Councilmember Logan Heley said he believes the new plan fits with the less car-centric Vision Metcalf, but suggested the developer look into making at least some of the units affordable.
He referenced a recent plan for affordable units at the former Mission Bowl site in Mission.
“What I hear from the community is not necessarily that they’re opposed to us helping build residential,” he said. “It’s that they’re opposed to us helping build super expensive residential.”
He also said environmental building criteria should be expected with public financing on future projects.
Lyons noted that without hope of some kind of agreement, the corner might end up with a one-story building and surface parking at a key entrance to Overland Park.
Committee members voting to continue talks were Heley, Lyons and Councilmember Fred Spears. Voting against were Councilmembers Jim Kite and John Thompson.