Title
Public Hearing: Chapter 100 Plan for the Mid-States Project at 420 SE Thompson Drive; Summit DC Real Estate Holdings, LLC, applicant
Body
Issue/Request:
This is an incentive request for a proposed approximately $80 million expansion of the warehouse and distribution facility to be operated by Summit DC Real Estate Holdings, LLC, a subsidiary of Mid-States Distributing, LLC, on approximately 79 acres located at 420 SE Thompson Drive. Historically, the property is known as the location of the former Toys-R-Us distribution facility.
Key Issues:
The City Council of the City of Lee’s Summit, Missouri (the “City”) will consider an ordinance
approving this Chapter 100 Plan and authorizing the issuance by the City of its taxable industrial development revenue bonds in the aggregate principal amount of not to exceed $79,650,000, in one or more series (the “Bonds”), to finance costs of an industrial development project (the “Project”) for Summit DC Real Estate Holdings, LLC, or its assignees or designees (the “Company”), which is a special purpose entity affiliated with Mid-States Distribution, LLC. 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”).
Background:
Based on information supplied by the applicant, Summit DC Real Estate Holdings, LLC, is a limited liability company organized and existing under the laws of the State of Delaware and is affiliated with Mid-States Distributing LLC (“Mid-States”). Mid-States is headquartered in Fort Worth, Texas, and operates a network of farm, ranch and home retailers serving 32 states, with over 700 store locations. The Company operates a distribution facility on approximately 40 acres of property located at 420 SE Thompson Dr, Lee's Summit, MO 64082 containing approximately 650,000 square feet of space and 104 loading dock doors (the “Existing Facility”).
On November 4, 2025, the City Council heard a conceptual presentation from the Company regarding an incentive request to support the company’s planned expansion of the warehouse and distribution facility at the Project site. The expansion would occur on approximately 39 acres to the north of the Existing Facility. The City Council provided generally positive non-binding feedback about the incentive request.
The Company’s Existing Facility is about 650,000 square feet. The Project to be financed by the Bonds consists of an approximately 465,000 square foot expansion to the Company’s Existing Facility, together with the installation of equipment in both the Existing Facility and the expansion facility. The expansion of the new structure will be constructed on approximately 39 acres to the north of the Existing Facility, which, together with the roughly 40 acres on which the Existing Facility is located, collectively constitutes the “Project Site.”
The Project is expected to cost approximately $79,510,000, consisting of approximately $54,510,000 of real property and improvement investments, including land acquisition and the acquisition cost of the Existing Facility, and approximately $25,000,000 in personal property investments. The investments are anticipated to be made in the years shown in the attached Cost- Benefit Analysis, although the actual years of investment may vary based on Project implementation.
The Company has entered into a Real Estate Sales Contract with the City which allows the Company to purchase from the City a strip of property that is 50 feet wide and 1,234 feet long, along the northern boundary of the parcel that is occupied by the Company’s Existing Facility. The purchase of this land from the City will allow for the expansion of the building to the north.
Proposed Motion:
I move for second reading of
Impact/Analysis:
There are three components to the Company’s incentive request:
(1) Sales tax exemption on the purchase of construction materials used for construction of the expansion.
(2) Real property tax abatement through Chapter 100 in the amount of 75% of the incremental increase in assessed value (as determined by the County) for ten years.
(3) Personal property tax abatement through Chapter 100 in the amount of 50% of the assessed value of the new personal property only (as determined by the County) for five years, for three installment purchases.
If this Plan is approved by the City Council, the City intends to issue the Bonds in 2026. The Company will make payments in lieu of taxes (“PILOTS”) for each component of the Project as follows:
(1) during all years, a PILOT calculated to represent 100% of the taxes that would otherwise be due on the Existing Facility,
(2) during the construction period, a PILOT calculated to represent 25% of the taxes that would otherwise be due on the partially completed expansion component of the Project,
(3) in years 1 through 10 after Project completion, a PILOT calculated to represent 25% of the taxes that would otherwise be due on the expansion component of the Project, and
(4) in years 1 through 5 after each year in which personal property components of the Project are installed at the Project Site, a PILOT calculated to represent 50% of the taxes that would otherwise be due on such personal property components (on a rolling basis, meaning that each item of personal property will enter and exit the abatement program with a 5-year abatement window starting the year after acquisition).
The tax impact analysis for this incentive request is set forth in the Cost Benefit Analysis that is part of the Chapter 100 Plan. The tax impact is also discussed in the Developer and City presentation slides.
The sources of funds to be expended for the Project will be the proceeds of the Bonds in a principal amount not to exceed $79,650,000, to be issued by the City and purchased by the Company to pay costs of the Project and the costs of issuing the Bonds, 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 City will hold title to the Project Site under the Chapter 100 transactions. The City will lease the Project to the Company for lease payments equal to the principal and interest payments on the Bonds. Under the terms of the lease agreement with the City, the Company will have the option to purchase the Project at any time and will have the obligation to purchase the Project at the termination of the lease.
Timeline:
Developer has indicated that the project will commence in 2026. A timeline for the full Project is set forth in Developer’s presentation slides.
Presenters
Curt Petersen, Polsinelli, P.C., for the Applicant
David Bushek, Gilmore & Bell, P.C., City economic development legal counsel