Title
An Ordinance authorizing the City of Lee’s Summit, Missouri to issue Taxable Industrial Development Revenue Bonds in a principal amount not to exceed $26,105,000 in connection with the Douglas Station Apartments Project and authorizing certain documents and actions in connection therewith.
(Note: First read by Council on December 2, 2025.)
Body
Issue/Request:
To authorize the City of Lee’s Summit, Missouri to issue Taxable Industrial Development Revenue Bonds for the Douglas Station Apartments Project, in the amount of and not to exceed $26,105,00.00.
Key Issues:
Approval of the issuance of Bonds for the purpose of the development of the Douglas Station Apartments Projects, pursuant to the Ordinance No. 10047.
Background:
The City previously approved a plan for an Industrial Development Project for the Douglas Station Apartments Project (“Plan”). The Plan proposed a multifamily apartment complex of approximately 150, one and two bedroom units consisting of five three-story buildings with masonry, lap siding, and board and batten facades, high-end interior finishes, with approximately 36 garage spaces, 15 electric vehicle charging stations, a swimming pool, integrated clubhouse, fitness center, leasing office, and lounge area (the “Project”), to be situated on approximately 6.4 acres situated to the south of the intersection of NW Sloan and NE Sycamore Street in Lee’s Summit, Missouri.
Pursuant to Ordinance No. 10047 passed on December 17, 2024, the City authorized the acquisition of the Project, once completed, using proceeds of industrial development revenue bonds to be issued under the Act after completion of the Project, which was anticipated to occur in 2028
Changes to Section 107.170 of the Revised Statutes of Missouri, as amended, that became effective on August 28, 2025, eliminated the need for the City to require a payment bond in connection with the Project, which removes an expense that would have otherwise been paid by the developer of the project, and which was the reason for the originally intended delay in issuing the industrial development revenue bonds until after completion of the Project in 2028.
The developer of the Project has requested to authorize the City to acquire the Project in its current state and arrange the completion of the Project using proceeds of industrial development revenue bonds to be issued under the Act (the “Bonds”).
Impact/Analysis:
The Project is expected to cost approximately $26.2 million. 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.
The sources of funds to be expended for the Project will be the proceeds of the Bonds in a principal amount not to exceed $26,105,000, 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.
For purposes of determining the impact of the sales and use tax exemptions for the qualified building materials on the affected taxing jurisdictions, it is assumed that the total amount of qualified building materials purchased will be $9,972,000 and that the situs of sale for the purchases will be as follows: 5.0% within the City, 22.5% within Jackson County but outside the City, 22.5% within Missouri but outside Jackson County, and 50% outside Missouri. The sales and use tax exemption is projected to be a savings of about $613,279 for the Developer, and the projected impact to the City from this exemption is approximately $150,827 which is about 25% of the total sales and use tax savings for Developer.
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 2025, for units under construction, pro-rated by percentage of completion.
(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 2025.
Presenter
David Bushek, Chief Council of Economic Development and Planning
Recommendation
Recommendation: Approval