Title
Presentation: Conceptual Economic Development Incentive Request for Hyundai Automotive Dealership at 1231 NW Ward Road; Victory Hyundai of Lee’s Summit, applicant
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Issue/Request:
This is an incentive request for a proposed Hyundai dealership which would be located at 1231 NW Ward Road, which is to the northeast of Summit Fair and north of the Summit Tech campus. The request comes to the City from Townsend Capital, LLC, as seller to Victory Automotive to operate a Hyundai dealership on the property to deal with unexpected site acquisition costs and public improvement costs.
Key Issues:
Conceptual presentation to receive feedback on the incentive request under the City's Economic Development Incentive Policy. The applicant is making this request for assistance with unexpected site development costs and public improvement costs.
Background:
This property has an extensive history regarding incentives for development that did not occur.
The Summit Fair Tax Increment Financing Plan (the “TIF Plan”) was originally approved on August 24, 2006 for the Summit Fair shopping center project. The City Council approved the Amended and Restated TIF Plan (the “TIF Plan”) on April 17, 2008. The full history of the Sum
The Redevelopment Area of the TIF Plan was expanded on May 14, 2014 to include the property located to the northeast of the Summit Fair shopping center to include the property north of Ward Road that was planned for a project called “Summit Place.” Summit Place was originally planned to include a Cabella’s store and a Sam’s Club store, along with other retail and commercial uses.
The City executed the Tax Increment Financing Contract with RED LSE, LLC on August 7, 2014 (“TIF Contract”). The TIF Contract includes certain land use restrictions that limit development of the property, including a list of restricted land uses and a prohibition against selling the property to a non-profit entity. TIF revenue collections for the Summit Place project area was activated on July 21, 2016.
The Summit Fair CID was also expanded on May 15, 2014 to include property in the Summit Place project. At that time, the CID and the TIF Plan were active over the Summit Place property, even though the Summit Place project did not happen. In 2017, Cabella’s was purchased by Bass Pro, which effectively blocked the Cabella’s store from being constructed in Summit Place. Sam’s Club followed by pulling out of the project, and thus the project was never constructed.
Summarized, the key dates associated with Summit Place are:
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Approve Original Summit Fair TIF Plan |
August 24, 2006 |
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Approve TIF Plan expansion for Summit Place |
May 15, 2014 |
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Approve CID expansion for Summit Place |
May 15, 2014 |
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Approve PMIX Zoning |
July 10, 2014 |
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Execute TIF Contract with RED LSE, LLC |
August 7, 2014 |
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Extension of TIF Contract Schedule |
July 2, 2015 |
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Approve TIF Projects and activate 23-year TIF Clock |
July 21, 2016 |
Townsend Summit, through subsidiary companies, owned the Summit Place property after these Council actions. In 2021, Townsend indicated that it would like to proceed with sales of the former Summit Place property, but was hindered by the TIF Contract restrictions discussed above. Townsend approach the City to request that the TIF Contract be terminated. RED Development, as the party to the TIF Contract with the City, was agreeable to this course of action. RED requested that, as part of the TIF termination, the CID should also be terminated on the Summit Place project area.
On November 9, 2021, the City Council passed three Ordinances which accomplished the following:
(1) Terminated the CID over the Summit Place property (Ordinance No. 9277)
(2) Terminated the Summit Place CID Agreement (Ordinance No. 9277)
(3) Terminated the TIF Contract for Summit Place (Ordinance No. 9278)
(4) Terminated the TIF Redevelopment Projects 2A and 2B on the Summit Place property (Ordinance No. 9279)
Rezoning: On April 9, 2024, the City Council passed Ordinance No. 9883 which approved a preliminary development plan (Phase 1) and a conceptual development plan (Phase 2) for development at 1151, 1201 and 1231 NW Ward Road, called “Summit Orchard North.” The proposed auto dealership at 123 NW Ward Road, which is the subject of this incentive request, was include in the PDP approval.
Impact/Analysis:
The tax impact analysis for this incentive request is set forth in the slides for this conceptual presentation.
Other Information/Unique Characteristics:
This request was made by the applicant after the rezoning for the project was approved by the City Council in April 2024.
Presenters
Ryan Westhoff, Dentons law firm, for applicant
Austin Duree, Managing Partner of Victory Hyundai of Lee’s Summit (available for questions)
Steve Rich, Vice President - Development, Townsend Capital, LLC
David Bushek, Chief Counsel of Economic Development & Planning