The developer of the Mission Gateway project is asking that the city contribute $30 million in public funding toward completion of the approximately $160 million project. If the city agrees to the request, it is anticipated bonds would be financed by increased property and sales tax revenues generated by the mixed use retail and residential development at the site.
The city has set public hearings for 7 p.m. Oct. 17 on the tax increment financing redevelopment plan and the creation of a Community Improvement District.
The city’s independent financial advisor told the council that the $30 million in public money would be paired with $128 million in private funds raised by the developer. If the city approves the TIF funding mechanisms, the bonds that the city would issue would be paid off by capturing additional property tax revenue — the difference based on the site’s assessed value in 2005 and its projected assessed value after it is built out — and a current one percent city sales tax on transactions at the retail establishments. If it approves the CID, those bonds could be paid by an additional one percent sales tax levied on all of the transactions except those at Walmart, which would not be part of the CID.
The developer’s proposal suggests sufficient revenue is projected from the revenue sources to pay principal and interest on the bonds issued by the city. The city’s consultants are conducting an independent analysis of the financing options and cash flow predictions.
The city council two weeks ago was advised by its bond counsel to expect that some public financing would be required to complete a project of this size and the financial advisor Wednesday said even with public funding the project is not a “financial slam dunk” for the developer. The development at Roe Avenue and Shawnee Mission Parkway is planned for 430,000 square feet of retail space, which includes a 150,000 square foot Walmart as the anchor tenant. A Sprouts Farmers Market grocery also has signed on as a tenant and the proposal says a health club and multiple restaurants are planned along with other junior anchors. The residential component calls for 300 market rate apartments to occupy 310,000 square feet.
The suggested financing plan would also see revenues from the TIF and CID pay back $12 million in city investments in storm water improvements at the site, $6 million upfront and $6 million over time. The city council must decide first if it approves of the TIF and CID proposals; second, the amount of public participation on funding; and third, the appropriate mix of bond types.
