February 16, 2018
The Shawnee City Council has approved issuing $48 million worth of industrial revenue bonds — an increase from an earlier estimate of $34.4 million — to help finance the Westbrooke Green mixed-use redevelopment at the northeast corner of 75th Street and Quivira Road.
The project’s developer requested the increase because “costs of materials and labor are increasing,” according to a memo Monday to Interim City Manager Vicki Charlesworth from Joseph Serrano, a partner with the law firm Kutak Rock LLP, the city’s bond counsel. The bonds’ increased amount could yield as much as $4.6 million in state sales tax exemption solely on the project’s construction materials, an increase from the prior maximum of $3.3 million.
The Shawnee City Council unanimously approved issuing the bonds at its Monday night meeting, without discussion.
This isn’t the first increase in the project’s cost or its council-approved public financing. The council approved the $113.2 million project, and $31.9 million in public funding for it, on Dec. 18 amid contentious discussion among council members and during the public comment segment regarding the amount of public financing being considered for the project.
The cost to build the project and the amount of public financing incentives the council approved Dec. 18 increased, and the amount the developer will spend on the project decreased, since the council’s Nov. 13 meeting, at which it established a tax-increment financing (TIF) redevelopment district at the site. The updated amounts:
Increased anticipated construction costs pushed the estimated project cost to $113.2 million from $110 million.
City-approved public funding increased to $31.9 million from $25.5 million. Of the city-approved funding, TIF increased to $21.5 million from $19.5 million for 20 years.
Community improvement district (CID) funding with interest included remains $10.4 million for 22 years through a 1.5 percent sales tax on businesses in the district.
The developer will spend an estimated $81.3 million on the project, down from the prior estimate of $85 million.
The project’s developer is Westbrooke North LLC, a joint venture of Mission Peak Capital, based in Kansas City, Mo., and New York City, and Extell Development Co., based in New York City. John D. Petersen, a lawyer with the law firm Polsinelli, represents the developer.
Westbrooke Green would occupy about 32 acres and contain about 529,500 square feet, with:
Eleven commercial buildings for office and retail use — 10 new and one existing — containing about 108,500 square feet;
Five new multifamily apartment buildings with about 530 luxury units;
Amenities including structured and surface parking, street parking, garages, an open courtyard space, a town square, an amphitheater, an outdoor dining area, landscaping, lighting, utilities, storm water improvements, water features, sidewalks and walkways, and streets and drives, according to the project plan.
The average rent for a roughly 800-square-foot apartment in the development would be about $1,100 a month, P.J. Ventola, managing director of Mission Peak Capital’s development team, said Nov. 13. New retail space would lease for $19 per square foot, and existing retail space would lease for $13 per square foot. The developer bought the land in February for $3.1 million.
The developer had anticipated starting the project in 2018 and completing it in 2020. As of Dec. 18, demolition on the site is scheduled to start in October 2018; the first phase of construction is scheduled to start in October 2019 and be completed in October 2021; and the second of two construction phases is scheduled to start in October 2022 and be completed in October 2024.
A CID is created by property owners who agree to tax themselves to finance improvements within a defined area. TIF is a public financing tool by which a developer of a blighted property is reimbursed for eligible development and infrastructure costs using the increment of new property or sales tax revenue generated by the development.
TIF is based on the “but-for” principle, meaning consideration is given to whether a development wouldn’t be financially feasible but for TIF.