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Mission Gateway developers outline project revisions, alterations to TIF

Mission Gateway Project.png
Posted at 3:20 PM, Feb 04, 2022
and last updated 2022-02-04 23:18:36-05

KANSAS CITY, Mo. — Citing the pandemic and constraints in securing financing, developers of the dormant Mission Gateway Development project outlined a series of proposed changes Thursday during a Mission City Council work session.

The development team — which is led by Tom Valenti of the Cameron Group based in Syracuse, New York — also laid out proposed changes to the tax-increment financing, or TIF, agreement the city established in 2006 for the now $268-million project.

The Cameron Group is seeking a new development agreement for the scarcely completed project, which is located along Shawnee Mission Parkway north to Johnson Drive and nestled between Roeland Drive and Roe Avenue on the site of the former Mission Center Mall.

It’s now a two-phase project as opposed to the original plan, which called for all construction to be completed in a single phase.

“We are committed to this project,” Valenti said. “We are ongoing to see this to completion. It is going to be a great success. ... I can assure you that we have been as frustrated as you, but this is a great project in a great area.”

Among other major changes, a proposed 40,000-square-foot food hall in collaboration with celebrity chef Tom Colicchio has been trimmed to 12,500 square feet.

Project partner Andy Ashwal, vice president and senior asset manager for GFI Capital Resources Group, said it was “impossible to get financing for a food hall that large” after the COVID-19 pandemic.

He added that one local restaurateur, Spanish Gardens, has signed a lease for space at the property.

It would be part of 139,752 square feet of retail space in the revised development plan, which initially called for more than 195,000 square feet of retail space.

That space still includes the Cinergy complex, for which there is an existing lease agreement, that will include a 10-screen movie theater, bowling alleys, a large restaurant/bar area, arcade and additional space for entertainment options.

Developers describe it as “a Main Event meets movie theater with more interactive stuff.”

The proposal also calls for 377 apartments, up from 168 in the original plan, and 100,000 square feet of office space, an increase from the 75,000 square feet initially included.

“Within the greater economy, apartments are doing a little bit better than retail. Lenders and capital markets like it, and there’s definitely a need for housing,” Ashwal said.

Developers are asking for a new 20-year TIF as part of the revised proposal.

Under the new tax abatement plan, the developer would receive 100% of property tax revenues, 55% of sales tax revenue, and 90% of transient guest tax revenues from the on-site hotel to pay off the city-issued special obligation bonds that would underpin the Mission Gateway project’s financing.

Valenti’s team also asked for the Community Improvement District tax to be doubled from 1% to 2% with 100% of the proceeds going to the developer and industrial revenue bonds to dodge sales tax on materials purchases for construction.

Some of the changes to the plan are necessary to secure financing for the project, according to Valenti, who said lenders have signed off on term sheets for the revised project.

“Not to rewind the clock, but as we all know we’ve gone through fits, starts and stops, but we’re at the point now where we’ve got those commitments and we’re ready to proceed,” Valenti said.

The first phase of the project would include the 90,000-square-foot Cinergy complex and nearly 50,000 square feet of ground-floor retail space beneath apartments along with a 1,500-stall parking garage.

A 202-room Element by Westin hotel, for which an existing lease agreement already exists with Marriott, and the office space or a medical facility would be built in the second phase.

The revised project also includes a carve out for affordable housing for the first time. The proposal calls for 20% or the apartments, or 75 units, to be designated “affordable units” with 31 studio apartments at 80% of the area mean income (AMI), 34 one-bedroom apartments at 90% AMI and 10 two-bedroom apartments at 100% AMI.

Some council members questioned whether that was sufficient given that the Mission Bowl Multi-Family Residential Project requires 20% of its units at 60% AMI, but developers implied the “affordable housing” piece was critical to the financing agreement with Ashwal calling it “feasible for what can be done.”

Community amenities would include a pool and at least two interior courtyards to provide residents and visitors with green space.

Construction of the parking garage and Cinergy project would begin in late 2022 with construction of the retail and residential set to begin in early 2023.

The movie-theater complex could open during the fall of 2023, but the residential complexes aren’t projected to be move-in ready into the spring or summer of 2025.

The preliminary timeline for Phase II has construction set to begin by the middle of 2023 with the office and hotel opening roughly two years later.

The project would be built to the National Green Building Council’s bronze standard, according to the new development plan.

After defaulting on payments to some contractors in 2020, the developers have reached a settlement for all mechanic’s liens against the property, according to a letter from the Polsinelli law firm on behalf of Aryeh Realty.

The developers also were delinquent on $365,000 in property taxes until June 2021.

Long-delayed contstruction finally started in 2020, but quickly stopped on the project in mid-2020, leaving an eyesore of concrete pillars and rundown fencing on the property ever since.

The amended Mission Gateway Development Agreement, which received initial city council approval in 2017 and was modified in 2019, expired Dec. 31, 2021.

The city terminated the old development agreement on Jan. 5, 2022, so the revised plan will need approval from the Planning Commission and City Council before moving forward.