Hunt Midwest and the city of Overland Park have settled several of the outstanding details and terms on the public incentive financing proposal for the mixed-use redevelopment project at the former Winstead’s site in the city’s downtown.
On Monday, the Overland Park City Council voted 10-0 to approve a redevelopment agreement with some concessions tied to the tax increment financing (or TIF) district for the apartments and retail development at 8036 Metcalf Ave.
Previously, the Overland Park City Council Finance, Administration, and Economic Development Committee had tabled the redevelopment agreement to continue negotiations between city staff and the developer, aiming to work out more details the two parties disagreed on. Then, last week, the committee unanimously recommended its approval.
“I think everyone came to a happy medium, and that’s what negotiation is all about,” Councilmember Chris Newlin, who chairs the finance committee, said on Monday. “I’m looking forward to this project.”
Councilmembers Sam Passer and Jeff Cox were absent from the meeting.
What’s planned at 8036 Metcalf?
Hunt Midwest, the developer, plans to build a six-story mixed-use building with about 225 apartment units, 5,000 square feet of retail space and a below-ground parking garage with some access for public parking.
In the past, the property at 8036 Metcalf was a Winstead’s hamburger joint until it closed in 2017 and later, a temporary bank location while UMB redid its downtown branch.
To help cover the expense of redevelopment, Hunt Midwest has requested the formation of a TIF district alongside a series of other public financing incentives, including a special sales tax.
Developer asking for $15.9M in reimbursement through TIF
In a TIF district, tax revenues generated from increased property values — called increments — are allocated to a specified third party, such as a developer, to reimburse costs incurred during the development of a specific project. For the 8036 Metcalf project, an estimated $15.9 million in reimbursement would go to the developer over the 20-year term of the district.
That being said, the redevelopment agreement the city council approved this week comes with some compromises from the city’s policies and practices on incentives.
For instance, typically, under city policy, a developer could get at most 90% of the increment, with the remaining 10% going back to the city. Initially, the developer had requested 100% of the increment, but after extended negotiations, the city held them to 95%.
Additionally, in the past, Overland Park has required developers to include attainable housing carveouts for the life of an incentive district, usually by setting aside a percentage of the planned units to be rented out below market rate.
However, under the terms of the redevelopment agreement, Hunt Midwest will need to contribute $5,000 a year for the life of the TIF to Friends of JCDS, a nonprofit constructing an apartment building nearby in downtown Overland Park for adults who have developmental disabilities and/or who are low-income.
On top of that, Overland Park will allow the developer to be reimbursed for land acquisition, design fees and other costs not usually considered to be eligible through the TIF district.
Though initially uncomfortable with making concessions like these, councilmembers on the finance committee last week said they were satisfied with the compromises because the city would see some of its priorities delivered through the project as well.
Most notably, the developer is including 48 new public parking spots in its plan and is redeveloping a key site right on Metcalf in downtown Overland Park, all points raised by councilmembers at the finance committee meeting and the full city council meeting.
“This project fits perfectly with the community vision that was established,” said Mayor Curt Skoog, referring to long-term planning efforts like Vision Metcalf. “This is an important project for the continued development of downtown Overland Park.”
Next steps:
- Both the finance committee and the city council will still need to vote on a TIF project plan for the redevelopment at 8036 Metcalf.
- Additionally, the developer still has to submit a Community Improvement District special sales tax petition for the city to consider.
- The exact timeline on all of that is unclear.
- Hunt Midwest has said the firm plans to start construction on the mixed-use project after the World Cup next year.
Looking back: Overland Park will use TIF to redevelop vacant site of former Winstead’s near downtown
