An out-of-town developer who wants to demolish an unused funeral home and a nearby home in downtown Overland Park to make way for apartments, townhomes and retail is seeking $12.7 million in public financing incentives.
Chicago-based 29th Street Capital has requested those incentives in the form of tax increment financing (or TIF) reimbursement for the nearly $73 million redevelopment project at 82nd Street and Metcalf Avenue, which the developer wants to break ground on as early as this summer.
This proposal would bring a new five-story mixed-use building with nearly 200 apartments, more than 7,000 square feet of retail space, as well as underground parking to the rapidly evolving Metcalf corridor.
Last week, the Overland Park City Council Finance, Administration and Economic Development Committee voted 6-0 to set in motion the multistep process to formally establish the redevelopment district for the project.
The committee vote also orders city staff to begin negotiating the terms of a redevelopment agreement that will detail the terms of the incentive package.
How they voted:
Here’s how members of the finance committee voted:
Holly Grummert: Yes
Drew Mitrisin: Yes
Richard Borlaza (filling in for Amy Scrivner): Yes
Gregg Riess: Yes
Andrew Payne: Yes
Christopher Newlin, committee chair: Yes
What’s in the incentive application for 82nd and Metcalf?
Under the application, 29th Street Capital is requesting $12.7 million in TIF reimbursement. The developer also recently acquired the Overland Station apartments at 79th Street and Santa Fe Drive.
In a TIF district, tax revenues generated by increased property values are remitted to a third party as property values rise, to cover or reimburse costs incurred in a defined development area over a set period.
Those who are critical of TIF district incentives say they divert tax dollars away from public use, including from local public schools. However, in Kansas, nearly half of the property tax collected by local school districts is exempt from TIF increment diversion.
Another common criticism is that these sorts of incentives don’t work as promised, or only incentivize development that would have occurred anyway.
Overland Park’s publicly available data on economic development investments show that, broadly, active TIF districts have worked as intended, and generally, their use is restricted to the city’s strategic investment zones. That includes Overland Park’s first TIF district, Cherokee South, which the city formed nearly 20 years ago at the corner of 95th Street and Antioch at a then-blighted and mostly vacant shopping center.
The TIF district 29th Street Capital is requesting is larger than some other TIF approvals for residential and mixed-use redevelopment projects in the downtown Overland Park area in the past decade or so, like Avenue 80 and the Edison District, according to city economic development data. However, it’s smaller than Hunt Midwest’s $15.9 million TIF reimbursement request for their seven-story apartment and retail building at 80th and Metcalf.
In addition to the TIF, the developer of the 82nd Street project has requested close to $72.6 million in economic development revenue bonds with a sales tax exemption on building materials and other construction expenses.
Apartments, retail to replace funeral home and single-family home
The plan includes a new building with 198 multifamily units, which includes a mix of apartments and attached townhomes. On the ground floor, there will be 7,300 square feet of retail space for shops and dining.
Below all of that, there will be a two-level parking structure with 265 spots for both residents and retail shoppers, with access from 82nd Street.
“I appreciate you coming and choosing to do more housing in our downtown,” Councilmember Holly Grummert said last week.
In order to make way for the redevelopment proposed at the southeastern corner of 82nd and Metcalf, the developer intends to demolish two buildings. Those include the existing 52,000-square-foot building that previously housed Overland Park Funeral Chapel, a sister location of Johnson County Funeral Chapel, as well as the single-family home at 8200 Travis St., which city documents indicated is vacant.
Earlier this year, both the Overland Park City Council and the city’s planning commission approved a certificate of conformity for the mixed-use redevelopment. Those actions essentially declared the project in compliance with the special zoning overlay in the downtown area called the Downtown Form District.
Next steps for 82nd and Metcalf redevelopment:
Now that the committee has voted to send the TIF forward, it goes to the full city council for consideration. On June 1, the city council will vote to schedule a public hearing on the matter, which is tentatively scheduled for July 6. After that, they will consider creating a formal redevelopment district.
Later, the finance committee, the planning commission and the city council will need to approve a TIF project plan before anything is finalized. Additionally, the committee and the city council will have to sign off on a redevelopment agreement, which sets the terms of the incentive package and covers things like sustainability requirements and affordable housing contributions.
Beyond incentives, Nikola Krcmarevic, 29th Street Capital’s vice president of development, told the finance committee last Wednesday that his firm is pursuing a fairly aggressive timeline, with plans to apply for necessary building permits as early as June.
If everything goes according to plan, Krcmarevic said, then construction could get going in late August.
Keep reading: Developer proposes replacing downtown OP funeral home with apartments and retail
