Some Mission city leaders want to “set the bar a little higher” for an apartment developer seeking public incentives for a new project off Metcalf Avenue.
The Mission City Council last week during the monthly finance and administration committee meeting pressed local firm Block Real Estate Services, LLC, on affordability and sustainability plans at an apartment project proposed for 5665 Foxridge Dr.
This comes as Block seeks public incentives in order to help finance construction of the proposed 307-unit luxury apartment complex.
Block’s plan envisions a five-story building with underground parking on the site of the former JC Penney call center on Foxridge, just off Metcalf and a couple of blocks north of Johnson Drive.
No action was taken by the city council last week, but the project is headed before the city’s full governing body for a public hearing on Nov. 20.
Beyond that, the city council is expected to take action on several items related to Block’s tax increment financing request — including the document that outlines the specific deal for the incentives — at its Dec. 18 meeting.
What does the incentive request currently look like?
Tax increment financing is a type of incentive that uses increased property or sales taxes generated by a new development to reimburse the developer for some eligible costs, according to the Kansas Department of Commerce.
Bruce Kimmel, the city’s financial advisor with Ehlers, Inc., told the city council last week that it the Foxridge project is unlikely to move forward without public incentives.
Still, he said he believes that there is room for the city to negotiate how the developer and the city split the increased tax revenues the project is estimated to generate.
For the Foxridge project, the developer wants a 20-year tax increment financing deal with the following terms, according to city documents:
- 95% of the newly generated taxes are reimbursed to the developer for the first five years. The other 5% goes to the city as tax revenue.
- 90% is reimbursed to the developer for the second five-year period, with 10% going back to the city as tax revenue.
- 85% is reimbursed to the developer for the third five-year period, with 15% going back to the city.
- 80% is reimbursed to the developer for the last five-year period, with 20% going back to the city.
Kimmel said if the TIF starts at a 95% reimbursement rate for the first five years, dropping by 5% every five years, then the developer will receive an estimated $16 million in generated tax revenues from that site over the 20-year period.
The city, in turn, would receive an estimated $2.4 million during that same time period.
The city’s portion of tax revenue increases if the city and developer can negotiate a lower starting percentage for the reimbursement rate, Kimmel said.
If the city can negotiate a starting reimbursement rate of 90% for the first five years and keep the 5% rate drop every five years, then the city could see $3.3 million over the 20-year period of the project. The developer would receive about $15.1 million in that same time period under this staggered split, Kimmel said.
Developer proposes $250K in cash in lieu of affordable units
For other apartment projects like Sunflower Development Group’s The Lanes at Mission Bowl, developers set aside a certain number of units in the project for lower-income residents.
Aaron Mesmer, executive vice president for Block Real Estate Services, told the city council last week that the rent range for the Foxridge project is still $1,600 to $2,800 for regular units.
At the top end, 10 penthouse-style units are projected to cost between $4,000 to $4,800 a month.
Mesmer said the company plans to make a $250,000 cash contribution to an affordable housing trust for the city in lieu of setting aside any units for lower income residents.
As far as sustainability, Mesmer said the plan is still to achieve a one globe rating under the Green Building Initiative plan. The Green Building Initiative is a certification system that measures the environmental sustainability of buildings.
‘Set the bar a little higher’
Councilmembers, along with Mayor Sollie Flora, pushed Block representatives to do more for the city’s affordability and sustainability goals.
Still, Councilmember Lea Loudon said the idea of developing in that part of the city excited her “because there is kind of a gap there with nothing going on.”
Loudon also asked about the traffic impact the project could have and whether public art is something the developer would consider including in the project.
As she has done in previous discussions about this project, Flora again encouraged the developer to take a look at increasing sustainability efforts from a one-globe rating to two globes. Mesmer responded, saying a one-globe jump would cost about $2 million.
Additionally, Flora said she thinks there will not be “a strong appetite” to move forward with public incentives if the project is going to sit untouched for a long time. Previously, Block officials have discussed construction on the Foxridge project not starting until 2027.
In response to Flora last week, Mesmer assured the council he had “seen the Mission Gateway movie” — alluding to the notoriously stalled development down Johnson Drive — and said Block wanted to avoid that.
Councilmember Ben Chociej said the city council needs to think about what Mission is getting from a development in return for investing public dollars.
Chociej said he sees value in doing something in this particular area of the city, but that he personally wants to “set the bar a little higher” for developments in Mission.
“We’ve been pretty interested in not just making the numbers make sense, but setting an expectation that a development brings a certain kind of quality to Mission whether it’s sustainability, affordability, walkability,” Chociej said.
Next steps:
- City Administrator Laura Smith said that city staff plans to take the feedback from the Nov. 6 meeting and work with developers on incorporating it into the “deal points.”
- Smith said a fully developed recommendation from city staff is more likely to come before the city council at the Dec. 18 meeting.
- Still, the public is able to provide input on this project and the public incentive requests at the Nov. 20 and Dec. 18 meetings during public hearings.
- City council meetings start at 7 p.m. at City Hall, 6090 Woodson St.
Go deeper: Watch the city council’s entire discussion during the committee meeting online here, starting at 2:01.
