With demand for offices falling, Leawood weighs changes to mixed-use project guidelines

Park Place buildings

Developers hoping to help build out Leawood's 135th Street corridor argue demand for office space has not yet recovered from the pandemic. Above, apartments at Leawood's Park Place — an example of a current mixed-use development. File photo.

Things may soon change for developers hoping to bring mixed-use projects to Leawood.

This fall, the city of Leawood received a letter from several developers voicing concerns that the city’s development mixed-use guidelines require too much office space — making it more difficult to bring more projects like the East Village and Oxford Promenade developments to the growing 135th Street corridor.

At a work session this month, the Leawood City Council and city staff discussed how to potentially address those concerns.

Leawood Oxford Promenade
A rendering of the incoming Oxford Promenade project, one of the most recent mixed-use projects to get the green light in Leawood. Rendering via Pace Properties / NSPJ Architects.

Developers say demand for offices has dropped

The city’s development ordinance currently requires any new mixed-use developments to have at least 15% office space.

In their letter to the city, developers argued the office market has seen very slow growth, with the COVID-19 pandemic halting demand for in-person office space as more of the workforce moving to working remotely or from home.

Southern Johnson County currently has 8.3 million square feet of empty office space, according to commercial real estate tracking firm CoStar.

With rising construction costs, they said it would also be difficult for new 135th Street offices to compete with office space in neighboring communities offering lower rent — such as Overland Park’s Corporate Woods Office Park.

The city is considering lowering office minimums

In its own discussion earlier this month, the Leawood Planning Commission posed a number of ways to address the problem — such as lowering the minimum for office space to 5% for mixed-use developments, or removing percentages altogether.

At the Oct. 16 meeting, some councilmembers agreed that declining demand for offices and rising construction costs could make it more difficult to fill office space.

“The developer’s role is to tell the city what the market is in today’s environment,” said Councilmember Andrew Osman. “We’re trying to get office, retail, and residential and have that mix that may or may not be feasible.”

Still, some city leaders also pointed out that having offices in mixed-use developments helps bring customers to the retail parts of developments— both of which keep developments from being dominated by residential.

“We have listened to our residents, and they don’t want all residential,” said Mayor Peggy Dunn. “I think that was why they kept complimenting Oxford Promenade, because that’s what they liked. They wanted to see more non-residential in East Village.”

The city council is still discussing it

  • This served as the first of two city council work sessions over this topic.
  • At the second work session, the developers who wrote the letter will have the chance to address the city council in person.
  • That work session will take place on Nov. 6.

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