Title
An Ordinance approving the Arborside Master Development Agreement between Land Reserve, Inc., the Arborside Community Improvement District, and the City of Lee’s Summit, Missouri, to implement the Arborside Land Clearance Redevelopment Authority (LCRA) Redevelopment Plan and the Arborside Community Improvement District, and authorizing additional actions in connection therewith.
(NOTE: First read by Council on November 3, 2026. Passed by unanimous vote.)
Body
Issue/Request:
This is an ordinance which approves the Master Development Agreement to implement the Arborside Land Clearance for Redevelopment Authority (LCRA) Redevelopment Plan and the Arborside Community Improvement District to fund the primary public infrastructure improvements which will serve the northern approximately 1000 acres of property owned by Land Reserve in the northern part of the City, east of I-470.
Key Issues:
Approval of an ordinance approve the Master Development Agreement to implement the long-term land-use planning and infrastructure funding for the northern approximately 1000 acres of the Land Reserve property in the northern part of the City.
Proposed City Council Motion:
I move for adoption of an Ordinance Approving the Arborside Master Development Agreement between Land Reserve, Inc., the Arborside Community Improvement District, and the City of Lee’s Summit, Missouri, to implement the Arborside Land Clearance Redevelopment Authority (LCRA) Redevelopment Plan and the Arborside Community Improvement District, and authorizing additional actions in connection therewith
Background:
On March 26, 2024, the City Council heard a presentation from City staff and representatives of Land Reserve, Inc., a Utah corporation (“Land Reserve”), regarding the development of approximately 4,203 acres of property within the City (collectively the “Property”). Land Reserve is under contract to purchase certain portions of the Property and anticipates purchasing the balance of the Property over time; after purchasing any portion of the Property, Land Reserve intends to sell such portions of the Property to third parties for usage and development.
The City Council approved Ordinance No. 9888 on April 9, 2024, which led to the execution of the Memorandum of Understanding between Suburban Land Reserve, Inc., and the City (the “MOU”). The purpose of the MOU is to coordinate for the planning, platting and zoning for development of the Property and the establishment of a funding plan for the construction of public infrastructure to serve development of the Property, as well as the attraction and inducement of certain private development to the Property. The Parties also seek to coordinate for the acquisition of portions of the Property for public institutional uses by the City and other governmental entities as the Property develops over time.
In August 2025, the City and Land Reserve teams provided a conceptual presentation to the City Council to introduce the structure of the funding plan for the north 1000 acres that has since been designated as the Arborside development area by Land Reserve.
On March 25, 2026, the City and Land Reserve teams make a presentation to the LCRA Board to give the Board a preview of the infrastructure funding plan that the City has developed in coordination with Land Reserve, and a preview of the upcoming proceedings to approve the LCRA Plan.
On April 14, 2026 the City Council approved Ordinance No. 10358 which approved the Cooperative Agreement between the City and Land Reserve for the Todd George Parkway Project. This Agreement governs the funding, design, engineering and construction of the Todd George Parkway project in the northern area of approximately 1000 acres of Property Reserve property. The project will be undertaken by Land Reserve, and reimbursed by the City up to the maximum amount of $24 million, as set forth in the Capital Improvements Plan for this project. This Agreement allows Land Reserve to accelerate the construction of Todd George Parkway, as compared to the schedule that the City would otherwise use for this project. The schedule calls for construction to commence no later than October 2027 and be finished by April 2030
On May 12, 2026, City and Land Reserve teams provided an update to the City Council regarding the ongoing work for this project, and a preview of the upcoming proceedings to evaluate and consider approval of the infrastructure funding plan for the Arborside area.
On May 14, 2026 the Planning Commission held two public hearings to consider an amendment to the Ignite! Comprehensive Plan and to evaluate the consistency between the Arborside LCRA Plan and the Comprehensive Plan. Thereafter, the Planning Commission approved Resolution 2026-4 which amended the Comprehensive Plan for the Arborside area; and approved Resolution 2026-5 which recommended approval of the LCRA Plan and recommended that the City Council find that the LCRA Plan is consistent with the Comprehensive Plan. This provided a recommendation to the City Council regarding the conformity of the LCRA Plan with the Comprehensive Plan by the City’s “planning agency” as required by the LCRA Act.
On June 4, 2026, the LCRA Board of Commissioners held a public hearing to consider the LCRA Plan. Thereafter the LCRA Board approved Resolution 2026-3 which recommended to the City Council approval of the LCRA Plan, including the factual findings required by the City Council to approve the Plan.
On July 14, 2026, the City Council approved the Arborside Land Clearance for Redevelopment Authority Plan (the “LCRA Redevelopment Plan”) through the adoption of Ordinance No. 10416 on July 14, 2026. ON the same date, the City Council approved the Arborside Community Improvement District through the adoption of Ordinance No. 10433 (the “CID” or the “District”).
City staff and Land Reserve have negotiated the Master Development Agreement since that time, and this agreement is now presented to the Council for legislative action.
Impact/Analysis:
Cost Benefit Analysis
The LCRA Plan is projected to have a positive impact on City tax revenues. A Cost Benefit Analysis was included in the packet which demonstrates that all of the real property taxing districts will receive substantial additional real property tax revenues as a result of development of the Arborside area.
Real Property Taxes
The LCRA Plan will allow the City to implement tax abatement on the Arborside property by placing the property in City ownership and leasing the property back to Land Reserve, which then may be subleased to site developers and end-users that build and operate the development projects.
Special Assessments: Certain portions of the abated taxes will be re-imposed as CID special assessments, which will generate CID funds to reimburse the appropriate parties for the primary infrastructure costs.
PILOTs: The property owner will make payments in lieu of taxes (PILOTs) for certain portions of the abated real property taxes, as set forth in the presentation slides. PILOT payments will flow to the real property taxing districts in proportion to their real property tax levy rates, as property taxes are normally distributed.
Abatement: A certain portion of the abated taxes will remain abated (no payment by the property owner), thus achieving an inducement incentive for industrial projects and residential development that is R-2 density or higher density.
Sales and Use Taxes
The LCRA Plan provides sales tax exemption on the purchase of construction materials which are used to construct the projects in the Arborside area. Sales taxes which are imposed by the State of Missouri, Jackson County, the City, the Zoo District and the Arborside CID will not be diverted or affected by the LCRA Plan, and will flow to the taxing district as normal. The only exception would be if the City Council later approves some type of additional discretionary incentive that results in sales tax redirection for the benefit of a landowner or developer for a specific project. The City team has not evaluated any type of sales tax diversion as part of this funding plan. The LCRA Plan will change the flow of real property tax revenues, but sales taxes imposed on retail sales in the Arborside area will flow as normal to the sales taxing districts that impose each sales and use tax after the LCRA Plan and CID are approved.
Arborside CID
The Arborside CID will use two funding mechanisms to reimburse Land Reserve for costs associated with the primary public improvements. The CID will impose a 1% CID sales and use tax that will apply to all retail sales within the District, including retail purchases by users in the District from out-of-state sellers which triggers the City’s use tax. The CID will also impose special assessments equal to a designated percentage of the abated real property taxes associated with each land use, as set forth in the presentation slides. This structure will be implemented through the Master Development Agreement. The LCRA Plan and CID work in concert to abate real estate taxes and impose special assessments for a portion of the abated taxes to generate funds to reimburse the Master Developer for public improvements costs.
MASTER DEVELOPMENT AGREEMENT
The Master Development Agreement (the “MDA”) which would be approved by this Ordinance will implement the financing plan arrangements which were discussed when the LCRA Redevelopment Plan and the CID were approved by the City Council in July 2026. The MDA has numerous attachments. A summary of the key features of the MDA are as follows:
General summary: The Arborside Master Development Agreement is an agreement among the City, the Arborside CID, and Land Reserve (the “Master Developer”). It sets out how the public infrastructure needed to serve development of the Arborside property will be planned, built and funded. Builders pay for the infrastructure up front. They are later reimbursed, with interest, from revenues the District collects within its boundaries.
Public Improvements. “Public Improvements” are the streets, utilities and other public infrastructure the City requires as conditions of approving development within Arborside. These conditions are called “Zoning Conditions.” Each improvement is built privately to City standards and then dedicated to the City or another public agency to own and maintain. The Agreement divides Public Improvements into two categories: Regional Public Improvements and Site Improvements.
Regional Public Improvements are the major backbone systems that serve the whole development. They are listed in Exhibit C of the Agreement and cover five systems: major transportation improvements include Todd George Parkway; Sanitary sewer improvements include sewer pump stations; stormwater improvements; major water mains; and electric improvements. The Master Developer is responsible for building the Regional Public Improvements. Master Developer can’t hand off that responsibility without the City’s written consent. Master Developer may, however, transfer to a Site Developer the right to be reimbursed for certain regional costs.
Local Public Improvements are the smaller improvements that mainly serve a single development project, such as neighborhood streets and utility connections within that project. They will be required through the Zoning Conditions for that project. Local improvements are usually built by the Site Developer that buys and develops that portion of the property. If they’re assigned to a Site Developer, the Master Developer is released from building them.
Requirements for Public Improvements (Section 2.2). Every Public Improvement must be designed, engineered, built and dedicated to the City’s standards, including the City’s Design and Construction Manual. Developers must meet these requirements: submit a construction schedule; receive City approval of preliminary designs and final plans before building; pay for all permits before work begins; allow City inspection throughout construction and achieve the City Engineer’s approval for any major design change.
Developers have these additional responsibilities: acquire needed right-of-way and easements; pay utility relocation costs; maintain the improvements until the City accepts them; and convey the improvements to the City free of liens. No building can be occupied until the required Public Improvements for that project are substantially complete.
Initial funding obligations. Developers pay all costs. The City’s only financial commitments are the Todd George Parkway agreement, the secured sewer pump station funds, and any other agreement the City approves separately.
Certification Process. A developer with a signed reimbursement agreement with the District may apply to be reimbursed for eligible costs of planning, designing, engineering and building Public Improvements under an approved Funding Plan. Costs must have been incurred and paid within 180 days before the application. Each application must include proof of payment, such as invoices, cancelled checks, receipts and lien waivers.
City staff review each application, normally within 30 days, to confirm it’s reasonable and consistent with the approved Funding Plan and reimbursement agreement. Staff then recommend amounts to approve or disallow. The recommendations appear in the next Quarterly Report, and the District Board may approve the certified amounts by resolution. Approved amounts are recorded on the public District Reimbursement Ledger. They begin earning simple (non-compounding) interest on the date of the Board’s resolution, at a rate no higher than the Prime Rate plus 1%.
District Meetings: Board, Quarterly and Annual. The District Board has five directors: two represent the City and three are designated by the developer. The Mayor appoints successors with City Council consent and may reject a proposed developer director for valid reasons. Every director must get notice of each meeting and be able to take part in person, by phone or by video. The District’s bylaws must include these protections.
Quarterly meetings are held on or near January 5, April 5, July 5 and October 5. At each one, the Board takes these actions: reviews the accountant’s Quarterly Report; approve certified reimbursement amounts; reviews the District Reimbursement Ledger; considers budget amendments as new projects are approved; authorizes payments, which are made on the following Quarterly Payment Date (the 10th of January, April, July and October).
Reimbursement Sequence. District revenues move in a fixed order: The CID sales tax and special assessments pay into the City account; the City releases funds to the District’s account when the District authorizes it; the District pays the approved Payees, meaning developers with reimbursement agreements. Before any developer is reimbursed, the District pays its own operating costs and the City’s administrative services fee. The Master Developer advances operating costs until District revenues can cover them, and it’s reimbursed for those advances and for the District’s formation costs under its reimbursement agreement. After that, revenues go to Payees under their reimbursement agreements, as described under CID Reimbursement Agreements below.
Payments follow a two-quarter lag. For example, revenues received in the first quarter are reported in the Quarterly Report due at the end of the second quarter and paid on the Quarterly Payment Date in the third quarter. The cycle repeats every quarter for the life of the District.
District Accountant. The District will hire an independent certified public accountant with municipal and special taxing district experience, reasonably acceptable to the City. The accountant has these duties:
Record all District revenues and tracks how they’re paid out.
Monitors sales tax compliance.
Prepares the annual special assessment statement.
Calculates interest owed on reimbursements.
Maintains the public District Reimbursement Ledger.
Prepares the Quarterly Report, which contains the following information:
Revenues collected by area.
The City’s fee and other District costs.
Amounts approved, paid and still owed to each Payee, with interest.
Amount to be released from the City account.
Payments to be made on the next payment date.
The accountant may view confidential sales tax data from the state on the District’s behalf. The accountant never holds or controls District funds; all money moves from the City to the District, then from the District to Payees.
Funding Plans. Before a development project goes forward, the Master Developer submits a Funding Plan to the District and the City. The plan describes how private financing will pay for the regional and local improvements the project needs, and how much reimbursement is expected from the District revenues the project will generate. Each Funding Plan will contain specific information about the project covered, the amounts expected to be funded for Public Improvements, the parties involved with the funding arrangement.
The City reviews each plan, and information from it is shared with the Planning Commission and City Council when they consider zoning approvals. The District Board approves each agreed Funding Plan by resolution, and the reimbursement agreements then put it into effect. City staff identify the Public Improvements that must be finished before occupancy, and those conditions are tracked from approval to completion on the public District Reimbursement Ledger.
CID Reimbursement Agreements. A CID Reimbursement Agreement is the binding contract between the District and a developer that turns an approved Funding Plan into an enforceable reimbursement obligation. The form of Reimbursement Agreement is an attachment to the MDA.
Reimbursement Agreement #1 (Master Developer). The first agreement is between the District and the Master Developer. It covers the Regional Public Improvements, the District’s formation costs, and the Master Developer’s advances for District operating costs. It will also itemize the $10.5 million in City funds secured for the sewer pump stations, once the City and the Master Developer sign a cooperative agreement for those stations. Under Agreement #1, all District sales tax revenues that aren’t specifically pledged to a Site Developer are permanently pledged to repay the Master Developer for regional improvement costs. Once a Site Developer has been fully repaid, the sales tax revenues from that Site Developer’s project also go to the Master Developer for regional improvements.
Later agreements (Site Developers). As the Master Developer sells portions of the property, each Site Developer that builds improvements may sign its own reimbursement agreement under an approved Funding Plan. These agreements normally cover the Local Public Improvements needed for that Site Developer’s project. They may also cover regional improvement costs whose reimbursement rights the Master Developer has transferred to that Site Developer through the sale. The District revenues from the Site Developer’s project, as set out in its Funding Plan, are pledged to repay that Site Developer. After it’s fully repaid, those revenues revert to the Master Developer’s regional reimbursement under Agreement #1. Each Site Developer agreement includes matching terms so all parties understand the arrangement, and it releases the Master Developer from any local improvement obligations the Site Developer took on. Every agreement, its original amount and its outstanding balance are tracked on the District Reimbursement Ledger, which is available for public inspection.
Timeline:
Land Reserve has indicated that it will pursue development projects promptly after approval of the LCRA Plan and CID Petition, and this Master Development Agreement, focusing on initial development in Phase I (central area, primarily commercial and residential development) and Phase II (southern area, primarily industrial development and park/recreational area). Land Reserve has indicated they are ready to sell land for development projects. Zoning applications and other required City permits and approvals will proceed as normal for each project that is pursued in the Arborside area.
Presenter
David Bushek, Gilmore & Bell. P.C., Economic Development Counsel for the City
Ryan Elam, Assistant City Manager