If you’ve been shopping recently in the Overland Crossing Shopping Center and noticed an extra charge applied to your receipt near the sales tax, that’s a private fee.
The fee — that appears on a Whole Foods Market receipt in the center as “OVRLAND GIF” — is a private general improvement fee, or GIF, of 1% on each purchase.
What is the Overland Crossing GIF for?
Dave Claflin from Legacy Development said the GIF functions similarly to a Community Improvement District or a Tax Increment Financing District, in that the revenue generated by the extra fee pays for improvements within a set area.
These private financing arrangements are sometimes called a public improvement fee, and have been used elsewhere in the U.S.
In this case, the GIF is paying back improvements Legacy Development did on the Overland Crossing Shopping Center as part of the district’s redevelopment effort, including parking lot improvements, new parking lot islands and new walkways.
Claflin said the fee could also be used to help pay for improvements to the shopping center in the future, like HVAC replacements or more parking lot replacements.
“That stuff’s an ongoing concern for all shopping centers,” he said. “But especially bigger ticket things that you typically run into when you’re really renovating a center like we did, that’s when you really need it.”
Overland Crossing GIF is not a tax
Unlike with a CID or a TIF, the city has no authority over the administration of a GIF.
Instead, a third party is collecting the fee revenue and administering its distribution to pay back bondholders, Claflin said.
“It basically just takes that idea of the TIF and takes the city out of the equation and relieves them of the responsibility of administering it and puts it in the third party’s hands,” he said.
City officials stress though that the GIF isn’t a tax. (Though shoppers’ pocketbooks may feel the GIF in the same way they feel taxes, taxes are technically revenues raised that go strictly towards government entities.)
“There is no city CID or (Transportation Development Districts) for this development,” said Overland Park Communications Manager Meg Ralph in a text message to the Post. “The GIF is a fee privately assessed based on legal agreements with tenants in this development.”
Additionally, Ralph said she’s unaware of any other GIFs in shopping centers across the city, but many shopping centers have used TIFs and CIDs over the years.
The Overland Crossing GIF has no expiration date
In a CID or a TIF, there is typically a set expiration date, but that’s not the case for the Overland Crossing GIF.
The agreements for the private improvement fee are part of the leases for each of the spaces in the shopping center, Claflin said. And, for example, the Whole Foods Market lease is for 20 years.
Claflin said Legacy Development intends to keep the fee in place throughout the rest of the shopping center’s life.
Overland Crossing has undergone multiple recent changes
- Last year, a new Whole Foods opened in the shopping center, replacing an old store down 119th Street.
- A new Nordstrom Rack location opened at 12050 Metcalf Ave. last year as well.
- Texas-based chain 151 Coffee intends to open a new drive-thru spot in the shopping center soon too.
- Plus, other new tenants are expected to arrive in the coming months.
Keep reading: New Overland Park Whole Foods opens
