Title
Public Hearing: Chapter 100 Plan for the Milhaus Apartments Project; Hwy 150 & Ward Road, LLC, applicant
Body
Issue/Request:
This is a public hearing for the approval of a Chapter 100 Plan for the Milhaus Apartments and authorizing the issuance by the City of its taxable industrial development revenue bonds in the aggregate principal amount of not to exceed $64,200,000 to finance costs of the project to be constructed by Hwy 150 & Ward Road, LLC (the “Developer”), a single-purpose entity controlled by Milhaus Development, as the Developer of the Project. The Bonds will be issued pursuant to the provisions of Sections 100.010 to 100.200 of the Revised Statutes of Missouri, as amended, and Article VI, Section 27(b) of the Missouri Constitution, as amended (collectively, the “Act”).
Key Issues:
Developer is requesting that the City approve incentives through a Chapter 100 Plan to provide sales and use tax exemption on construction materials and a fixed schedule of payments in lieu of taxes (PILOTs) for 10 years for the residential portion of the project.
Background:
The Arborwalk / Raintree area has been the subject of discussion and prior City Council actions. The key dates associated with the overall Raintree Village project, which is generally located north of Highway 150 and west of Ward Road, and the incentives that have been previously approved by the City Council for the project area, are as follows:
• July 12, 2022 - City Council heard a conceptual presentation from Christie Development for the Raintree Village project, including a community improvement district for the commercial portions of the project a Chapter 100 plan for the Scenic Development senior care facility. Incentives for apartments was not part of the presentation or request.
• July 19, 2022 - City Council approved Ordinance No. 9463 which approved the preliminary development plan for Scenic Development senior care facility as part of the Raintree Village project.
• December 13, 2022 - City Council held the public hearing for the Chapter 100 Plan for the Scenic Development senior care facility.
• February 14, 2023 - City Council approved Ordinance No. 9606 authorizing the City to issue taxable industrial development revenue bonds not to exceed $35 million for the Raintree Village Phase 1 Senior Residential Project.
• March 24, 2023 - Milhaus Development sent a letter to Christie Development explaining the need for incentives for the proposed apartment project (included in packet).
• June 20, 2023 - City Council approved Ordinance No. 9702 which approved a preliminary development plan for three lots consisting of a convenience store (Casey’s), a day care facility and an oil change business.
• September 19, 2023 - City Council approved Ordinance No. 9756 which approved the Raintree Village CID.
• December 5, 2023 - City Council approved Ordinance No. 8909 which approved the Cooperative Agreement among the City, the Raintree Village CID, Martin City Partners LLC, and 150 Highway Lee’s Summit to implement the CID.
• December 20, 2023 - City Council approved Ordinance No. 9572 to approve the Chapter 100 Plan for the Scenic Development senior care facility.
At the May 6--, 2025 Council meetings, the City Council heard a conceptual presentation about the incentive request presented by Developer for the Project. A majority of the City Council expressed an interest in considering the incentive request presented by the developer team. The City Council did not vote or render any type of final or binding decision as part of the conceptual presentation.
The Project to be financed by the Bonds consists of an approximately 272-unit multifamily apartment complex spanning six three-story garden-style buildings and one four-story, elevator-serviced low-rise building (the “Project”). The Project will include approximately 458 parking stalls, a resident lounge and clubhouse, a swimming pool, bicycle storage area, fire pits, a grill station, a fitness/yoga studio, co-working space, and a pet spa, and units will include stainless steel appliances, tile backsplashes and in-unit washers/dryers. The Project will be located at the southwest corner of the intersection of SW Arborwalk Boulevard and SW Ward Road in the City (the “Project Site,” the approximate boundaries of which are shown in the map below).
The Project is expected to cost approximately $64,200,000. The investments are anticipated to be made primarily in 2025 through 2028, although the actual years of investment may vary based on Project implementation.
The Chapter 100 Plan has been requested to provide sales and use tax exemption on construction materials and fixed payments in lieu of taxes (PILOTs) starting at $1,600 per unit pursuant to Chapter 100 of the Revised Statutes of Missouri.
Impact/Analysis:
The Project is expected to cost approximately $64,200,000. The investment is anticipated to be made from 2025 through 2028as shown in the Cost-Benefit Analysis. Under Article X, Section 6 of the Missouri Constitution and Section 137.100 of the Revised Statutes of Missouri, all property of any political subdivision is exempt from taxation. Under this Plan, the City intends to issue the Bonds in 2025.
The sources of funds to be expended for the Project will be the proceeds of the Bonds in a principal amount not to exceed $64,200,000 to be issued by the City and purchased by the Company and, if needed, other available funds of the Company. The Bonds will be payable solely from the revenues derived by the City from the lease or other disposition of the Project. The Bonds will not be an indebtedness or general obligation, debt or liability of the City or the State of Missouri.
The Companies will make payments in lieu of taxes (“PILOTS”) for each component of the Project as follows:
(1) prior to construction, the amount calculated to equal the taxes that would have been due on the unimproved land were it in private ownership,
(2) during construction, an amount calculated from a starting point of $1,600 dollars per door, with an inflation adjustment of 3.0% in each odd year starting with 2027, for units under construction, pro-rated by percentage of completion, and
(3) from and after completion, for a period of 10 years, a fixed PILOT calculated from a starting point of $1,600 dollars per door, with an inflation adjustment of 3.0% in each odd year starting with 2027.
The total PILOT payments are estimated in the Cost-Benefit Analysis. The projected impact to the City for the real property tax exemption is summarized in the presentation materials that are included in the meeting packet.
Timeline:
If the Chapter 100 incentive is approved, the project is expected to begin in 2025 and the construction will last through 2028.
Presenters
Curt Petersen, Polsinelli PC, for Developer
David Bushek, Chief Counsel of Economic Development and Planning