Developers seeking to build apartments at Metcalf Avenue and Interstate 435 have asked Overland Park for $11.6 million in tax increment financing plus about $1 million from a special sales taxing district and an exemption from sales taxes they’d pay for building materials.
Why it matters: The proposal for the second phase of the Metcalf 108 project would allow public money to go toward certain costs to complete building on the site of the old Overland Park Place Hotel and address blight at one of the city’s most well-traveled gateways.
The city council’s Finance, Administration and Economic Development committee voted 4-1 in a voice vote Wednesday to have staff draw up the paperwork for a public hearing and the consideration of the entire council sometime in June or July.
Background: The project began in 2017 with the building of a Staybridge Suites as its first phase. The second phase was to have included an office building and parking garage next door, but Metcalf 108 Redevelopment Investors LLC ran into trouble in its search for tenants for the proposed office building during the intervening years of pandemic.
After months of looking, the developers of the $70 million project decided an office building wouldn’t be financially feasible and asked the city to consider a new plan with apartments instead.
The revised plan envisions a seven-story multi-family building of 220 units, 10% of which would be “attainable” and below market rates.
The council okayed the new project definition last month and will now move on to the question of whether to provide a package of tax incentives.
Details: The developers asked for tax increment financing that makes use of part of the increase in property taxes that are expected due to the project.
- The TIF plan would be capped at 90% of that increase or a little under $11.6 million — whichever is less — over 20 years.
- In addition, a designated Community Improvement District is proposed for a 1% sales tax for sitework and demolition.
- Economic Development Revenue Bonds would be used for an exemption on sales taxes paid toward construction and certain other materials, saving developers an estimated $1.5 million in sales tax, $190,000 of which would have gone to Overland Park.
Committee discussion: The new apartment plan for the project has drawn skepticism among some councilmembers, who have said at previous meetings they dislike the idea of using tax incentives toward apartments.
Before the pandemic, Class A office space had been sought after and encouraged by the council for development projects.
There was little discussion during the committee meeting Wednesday. Councilmember Holly Grummert said she’s had a difficult time deciding how she’ll vote.
“In theory we are basically incentivizing a parking garage and apartments, which kind of feels like a weird juxtaposition for a public-private partnership,” she said.
But she noted the project would address a “problem area” in the city and conforms to the vision of how Metcalf Avenue should be developed.
“To think about what that would be without this partnership is a little concerning,” Grummert said.
Next steps: The public will have a chance to weigh in at a hearing at a full council meeting in mid-May.
Approval of the TIF plan requires a nine-vote majority. The special sales tax district and sales tax exemption bonds could be approved with a simple seven-vote majority.
Roxie Hammill is a freelance journalist who reports frequently for the Post and other Kansas City area publications. You can reach her at email@example.com.