Title
An Ordinance approving the first amendment to the Redevelopment Agreement among the City of Lee’s Summit, Missouri, the Cedar Creek Community Improvement District and Enterprises Cedar Creek, LLC, and approving the First Amendment to the Cedar Creek Land Clearance for Redevelopment Authority Redevelopment Plan, to implement the incentives for the Cedar Creek Shopping Center Redevelopment Project.
(Note: First read by Council on July 13, 2021.)
Body
Issue/Request:
An ordinance to approve amendments to the Redevelopment Agreement and LCRA Plan to authorize reimbursement of project costs associated with redevelopment of the former Pizza Hut site for a new restaurant.
Key Issues:
Adjustment to reimbursement now that plans for redevelopment of the property at 1103 SW Oldham Parkway (former Pizza Hut site) is moving forward.
Proposed City Council Motion:
I move for adoption of An Ordinance approving the first amendment to the Redevelopment Agreement among the City of Lee’s Summit, Missouri, the Cedar Creek Community Improvement District and Enterprises Cedar Creek, LLC, and approving the First Amendment to the Cedar Creek Land Clearance for Redevelopment Authority Redevelopment Plan, to implement the incentives for the Cedar Creek Shopping Center Redevelopment Project.
Background:
The Cedar Creek Community Improvement District (the “District”) was formed on September 29, 2020, by the adoption of Ordinance No. 8973 in accordance with the Missouri Community Improvement District Act, Section 67.1401, et. seq., of the Revised Statutes of Missouri, as amended. This CID authorized reimbursement for redevelopment of the southern portion of the Cedar Creek shopping center (not including the Hy-Vee grocery store property) and the property at 1103 SW Oldham Parkway which is the former Pizza Hut site. This property was used for Covid testing during the Covid emergency period.
The Cedar Creek LCRA Redevelopment Plan (the “LCRA Plan”) was approved by the City Council on January 5, 2021 through the adoption of Ordinance No. 9042. The LCRA Plan authorizes sales and use tax exemption on the purchase of construction materials that will be used in the redevelopment project at the Cedar Creek shopping center and the property at 1103 SW Oldham Parkway.
The City, the District and Enterprises Cedar Creek, LLC (the “Developer”), executed the Redevelopment Agreement on February 17, 2021 to implement the incentives provided through the District and the LCRA Plan (the “Redevelopment Agreement”). The maximum amount of the incentives provided through these incentive tools was about $1,499,000.
Developer has proposed a preliminary development plan (PDP) for redevelopment of the property located at 1103 SW Oldham Parkway, within the boundaries of the District, through demolition of the existing building and the construction of a new restaurant building and related improvements on the property. The PDP is currently being processed through the Development Services Department.
The Land Clearance for Redevelopment Authority (the “LCRA”) Board of Commissioners may approve modifications to the LCRA Plan pursuant to the authority granted in Section 99.430.1(10), RSMo. The LCRA Board of Commissioners has delegated all of its power and authority to implement the LCRA Plan to the City Council pursuant to LCRA Resolution 2020-1 which was approved on December 1, 2020. The City COuncil therefore has the authority to amend the LCRA Plan by ordinance.
Impact/Analysis:
Reimbursement data for the original redevelopment project:
$9.430,000 Total project costs
$1,499,000 Approved reimbursement amount
15.9% Original reimbursement ratio
Reimbursement data for the revised redevelopment project:
$10,630,000 Total project costs
$1,949,000 Reimbursement amount
18% Reimbursement ratio
The reimbursement ratio for these types of redevelopment projects has historically been roughly between 10% and 30%. The costs savings associated with the LCRA Plan is approximately the same at about 1% of total project costs.
Timeline:
If this amended reimbursement is approved, the real estate closing will occur promptly after the contract amendment is approved. The redevelopment work at the Shopping Center is projected to be completed in 2022. The Developer has not provided a timeline for construction of the new restaurant at 1103 SW Oldham Parkway, and the PDP application process is under way now.
Other Information/Unique Characteristics:
The amendment facilitates redevelopment of the former Pizza Hut property and adjusts the budget for the construction of a new restaurant at that property.
Presenter
Curt Petersen, Polsinelli law firm
David Bushek, Chief Counsel of Economic Development & Planning
Mark Dunning, Assistant City Manager
Recommendation
Staff recommends approval of the requested amendments.
Committee Recommendation
The LCRA Board of Commissioners recommended approval of the original LCRA Plan. This amendment to the LCRA Plan did not require a new hearing before the LCRA Board and is only implementation of the original LCRA Plan.