Title
An Ordinance approving the Redevelopment Agreement and the Lease Agreement between the City of Lee’s Summit, Missouri and 1601 SE Hamblen Road, LLC (T&W Steel Company) to implement the 1601 SE Hamblen Road, LLC Land Clearance for Redevelopment Authority Redevelopment Plan.
Body
Issue/Request:
Approval of contracts to implement the LCRA Redevelopment Plan that was approved in March 2025 for the 1601 SE Hamblen Road, LLC industrial project, also known as T&W Steel Company, Inc. Industrial Project.
Key Issues:
Approval of the Redevelopment Agreement and Lease Agreement to implement the LCRA Redevelopment Plan to provide sales tax exemption on the purchase of construction materials and real property tax abatement for a period of 10 years for the 1601 SE Hamblen Road, LLC development, as a reimbursement source for the redevelopment costs associated with the project.
Proposed City Council Motion:
I move for second reading of an Ordinance approving the Redevelopment Agreement and the Lease Agreement between the City of Lee’s Summit, Missouri and 1601 SE Hamblen Road, LLC, to implement the 1601 SE Hamblen Road, LLC Land Clearance for Redevelopment Authority Redevelopment Plan.
Background:
On January 22, 2025, the LCRA Plan was presented to the LCRA Board of Commissioners, and the Board then passed Resolution 2025-1 which recommended approval of the LCRA Plan.
The 1601 SE Hamblen Road, LLC Land Clearance for Redevelopment Authority Redevelopment Plan was approved through the adoption of Ordinance No. 10084 on March 4, 2025. That ordinance was subject to the execution of a Redevelopment Contract and Lease Agreement to implement the Redevelopment Plan, and this ordinance will satisfy that condition.
The proposed development provides for the design, development, construction and relocation of a facility which will be approximately 53,600 square feet. The LCRA Redevelopment Plan also provides for associated onsite and offsite sitework and infrastructure, including, without limitation, utilities, stormwater management, street/drive and parking improvements, and landscaping.
To implement the LCRA Plan, the City will become the fee owner of the project through the life of the incentive period and lease the property to the 1601 SE Hamblen Road, LLC (the “Developer”). The Lease Agreement will accomplish this lease arrangement to implement the tax abatement incentive.
Impact/Analysis:
Some of the key features of the Redevelopment Agreement and Lease Agreement are summarized as follows:
• Abatement Implementation: Developer will make a Payment In Lieu of Taxes (PILOT) each year during the life of the abatement period, which is 10 years. The PILOT will be 75% of the taxes that would otherwise be due and payable on the property. In order to provide an established level of PILOTs during the payment period, the Contract provides that the County’s valuation of the property will be used to measure the 75% PILOT while development is occurring.
• Redevelopment Schedule: Developer is required to comply with the schedule of development that is attached to the Contract. Developer may request up to a one-year extension of time to commence and/or complete the development. Such request for an extension may be granted by the City Manager. Failure to comply with the schedule, as extended by the City, allows the City to terminate the real property tax abatement.
• Lease Safeguards and Protections: A significant number of protections are built into the Lease, which are summarized in the attachment “LCRA Lease Protections.”
Timeline:
Start: Construction of the project is expected to commence in June 2026
Finish: Project is expected to be completed in December 2027
Presenter
Ben Bigham, Polsinelli, P.C., for T&W Steel Company (Developer)
Ryan Elam, Assistant City Manager
Erin Kelly, Staff Attorney
Recommendation
The LCRA Board of Commissioners recommended approval of a contract to implement the LCRA Redevelopment Plan.