Merriam approves $9M issuance in bonds for Kmart redevelopment

The city of Merriam approved the issuance of $9 million of industrial revenue bonds for Merriam Grand Station, the Kmart redevelopment. Above, the Merriam Grand Station construction site. Photo credit Juliana Garcia.

Bonds for redeveloping the Merriam Kmart project are being issued.

The Merriam City Council on Monday unanimously approved an ordinance to issue up to $9 million worth of industrial revenue bonds for the Kmart redevelopment, now called Merriam Grand Station.

Merriam Grand Station is a $130 million redevelopment at the southwest corner of Shawnee Mission Parkway and Antioch Road. The mixed-use project features restaurant and retail spaces, civic space, a parking structure and two apartment buildings.

The $9M IRBs will go toward parking costs

This allows for sales tax exemptions on construction materials related to the commercial part of the project.
City documents show this is a two-part IRBs issuance, the first of which is up to $6.75 million for costs associated with surface parking for the commercial project.
The second part of the series calls for up to $2.25 million to go toward the parking structure for the commercial part of the project.
This parking structure will be connected to the residential part of the redevelopment plan, according to city documents.

The first Merriam Grand Station bond issuance was approved by the city council in August 2023. — The old Kmart sign is empty at the Merriam Grand Station construction site. Photo credit Juliana Garcia

Developers are required to pay the bonds

Joe Serrano, the city’s bond counsel, told the city council on Monday that the city is prohibited from assisting the developers in bond repayment.
That is because it would require the city to use taxpayer dollars to pay the bonds, which are used as a way to receive tax exemptions, Serrano said.
If developers miss a payment, then the city can “default the developer and unwind the transaction,” Serrano said.
This means the developers would no longer benefit from the exemptions the bonds offer, he said.

Merriam previously OK’d up to $102 million in IRBs

Last year, the city council approved a resolution of intent to issue up to $102 million worth of IRBs for the project.
The $9 million in IRBs the city council approved on Monday was part of that $102 million.
The remaining $93 million is for the residential part of Merriam Grand Station, and will go toward property tax abatement and sales tax exemption on construction materials.

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