As part of a months-long effort to review its economic incentive policies, Overland Park is now tackling two that tend to use sales tax to encourage specific types of development and redevelopment.
These two economic development tools are community improvement districts and transportation development districts, more typically referred to as CIDs and TDDs, respectively.
Overland Park’s approach to economic incentives is shifting
- Recently, the Overland Park City Council Finance, Administration, and Economic Development Committee has taken up a number of these economic incentive policies for revisions.
- The committee has also worked with city staff to draft a new policy to encourage reinvestment housing projects.
- These conversations follow the adoption of a new comprehensive plan, called Framework OP, that sets out strategic investment areas in Overland Park, primarily located along the Metcalf Avenue corridor.
- The idea is to focus the use of incentives of all types on projects that fall within these strategic investment zones.
How do CIDs and TDDs work?
In both CIDs and TDDs, revenue to reimburse some development costs is raised through an extra sales tax applied on all purchases in a defined area for a set amount of time.
A maximum reimbursement amount is usually set in an agreement with the jurisdiction approving incentives — like a city — and a developer.
Only specific costs are reimbursable in each type of district, according to these agreements.
For example, in Lenexa, customers dining and shopping in the Central Green building for the next 20 or so years can expect to pay an extra 1% in sales tax due to a CID in existence there. Developers for that project can recoup no more than $2 million in costs during that window.
Overland Park Assistant City Manager Jack Messer said that revenue can also be created through other means within CIDs and TDDs. In particular, an extra property tax assessment can be levied inside specific geographic boundaries, as well, that would also come with a set expiration date.
Currently, Overland Park has eight active TDDs and 19 active CIDs. See this map of all economic development zones in the city today.
Those projects include the parking structures at both the Edison District in downtown Overland Park and Oak Park Mall, as well as shopping center improvement projects across the city.
Proposed policies lay out new development priorities
- While many of the proposed changes in the policies are procedural, they also lay out a new set of priorities the city is striving for in projects that would use these incentives.
- Specifically, under the new planned policy for CIDs, Overland Park is hoping to target developments that would bring certain types of public infrastructure work.
- That includes streetscape improvements, complete street projects with bike and/or pedestrian access, infrastructure for transit and the burying of utility power lines underground.
- Councilmember Melissa Cheatham also suggested adding language about the city’s sustainability and environmental goals to its policies for approving CIDs.
- For the TDD policy, the city has proposed no specific revisions, but Messer said the changes will be based on the updated CID policy.
Next steps:
- The finance committee is expected to take up the CID and TDD policies again in August for more discussion and a vote.
- Then, before the amended policies can take effect, the full city council will have to vote on it.
- In the last several months of workshopping these ideas, city staff have indicated there will likely be a city council Committee of the Whole meeting for further discussion about any proposed revisions.
Keep reading: Overland Park moving ahead with developer incentives for housing projects
