The city of Merriam has approved issuing up to $102 million industrial revenue bonds for the Merriam Grand Station development at the former Kmart site.
Why it matters: This is one of the first steps needed to kick-start the much-watched project, which is set to remake the long-vacant site on the prominent corner of Shawnee Mission Parkway and Antioch Road.
Background: The city council approved the Merriam Grand Station plan featuring apartments, retail, restaurants and public space back in July.
- Overland Park-based Drake Development is leading the redevelopment of the former Kmart, which closed there in 2013.
- While Block and Co.-affiliated companies have owned the site for years, nothing of significance has occurred there in almost a decade.
- Read the Post’s timeline of the history of the Kmart site here.
What are IRBs? IRBs, or industrial revenue bonds, are a way to finance “a new or growing business’ land, buildings and equipment,” according to the Kansas Department of Commerce.
- Cities can issue IRBs, the proceeds of which “are made available to enable creditworthy companies to purchase land and pay the costs of constructing” new facilities, according to the Department of Commerce.
- IRBs often offer property and sales tax exemptions, as well.
- This is the case in the Merriam Grand Station development: the IRBS approved this week give sales tax exemptions on commercial construction materials and a property tax abatement on the residential portion of the project.
Worth noting: Merriam made three separate approvals related to IRBs at its meeting Monday.
- First, the city council approved changing language in the original redevelopment agreement to reflect the city’s intent to issue IRBs in an amount up to $102 million — more than double the $50 million originally written into the agreement.
- That increase is due to developers not factoring in all the project’s costs when the $50 million figure was provided to the city, though the $52 million increase “does not change the city’s financing commitment to the project,” according to city documents.
What else: The city council also approved two other resolutions further breaking down the $102 million figure.
- One resolution approves the issuance of $93 million worth of IRBs for property tax abatement and sales tax exemption on construction materials for the residential portion of the project.
- The last resolution the city council approved lays out the city’s intent to issue $9 million worth of IRBs for sales tax exemptions on construction materials for the commercial part of the project.
How they voted: The council voted 7-1 to approve the change upping the total IRB amount to $102 million with Councilmember David Neal the lone “no” vote.
- “I’m going to vote no because I still don’t think this project makes economic sense for the residents,” Neal said as he voted against the amendment to the redevelopment agreement. “I just haven’t seen it.”
- Neal also was the lone “no” vote on the second resolution approving $93 million worth of IRBs for tax abatements and sales tax exemptions on construction materials for the residential part of the project.
- The council voted unanimously 8-0 to approve the third resolution to issue $9 million for sales tax exemptions for construction materials on the commercial part of the property.
