Council postpones vote on final plans for Mission Gateway project

Council postpones vote on final plans for Mission Gateway project

MISHN, Kan. — Final plans for the Mission Gateway project will be delayed again as developers try to secure an additional $19 million in private financing.

During a special meeting Monday, the Mission City Council approved a preliminary development plan for the Mission Gateway project, but final plans are not expected to be approved until next year.

The council voted 6 to 2 to approve the new preliminary project development plan. That updated plan would reduce the proposed eatery space by about 14,000 square feet and incorporate it into a new apartment building at the corner of Johnson Drive and Rowe Avenue. This will increase the total number of units offered to 372, i.e. by 121%. compared to the plan approved by the council back in 2016.

Council members Ken Davis and Hillary Parker Thomas voted against the development plan.

“I believe that this project plan and its elements, its aesthetics and its phasing, are not appropriate for what I consider to be an entrance to the Mission. We’ve been waiting a long time for a decent project on this site, and I don’t think this is it,” Thomas said.

The council also voted 7-1 Monday night to approve a bond extension for the project, with only Councilman Thomas voting against.

In 2018, the city issued industrial revenue bonds (IRBs) for the project to give the developer, Aryeh Realty, a sales tax exemption for construction materials. The repayment of these bonds is scheduled for the end of this year.

“By providing for the expansion through this amendment, it provides a simpler and more cost-effective way to maintain this incentive. There are no other structural changes in the bonds. The developer will still pay it without the city being responsible,” said Kevin Wempe of Gilmore and Bell.

City Administrator Laura Smith said that based on updated terms from the developer’s primary lender Bank OZK and mezzanine lender Bentall Green Oak (BGO), the developer will need to secure an additional $19 million to offset the overall reduced loan amount.

“The biggest change that was noticed when reviewing the updated terms was that OZK Bank offered to finance the same amount of project costs as before, BGO reduced the proposed loan amount. It’s really a factor of those market conditions,” Smith said.

Smith said final action on the proposed project will be presented by January to give the developer time to secure additional financing.

“I think we will do everything we can to try and raise the remaining capital shortfall before January, but it will be hard work. Especially not having the TIF and CID in hand to show these investors,” said Matt Valenti of Cameron Group, the parent company of Aryeh Realty.

In 2023, the council is expected to vote on a renewed Mission Gateway redevelopment agreement.

“The redevelopment agreement does include a commitment to maintain 10% of the total housing units as affordable housing at 60% of Area Median Income (AMI) for the full 20-year term of the TIF,” Smith said.

The board will also consider an application by the developers to reinstate tax credits previously approved for the project.

In 2017, the city approved a tax increment financing (TIF) plan for the Mission Gateway redevelopment project. This 20-year TIF collection period for the project began in January 2019. Since then, the developer has filed a fifth amended TIF redevelopment project plan that, if approved, would reset the TIF levy period.

The Gateway project is currently within an established Community Improvement District (CID). A developer has filed a petition to increase the CID collection of real estate sales tax from 1% to 2%. According to city records, CID collection will begin in 2024 and last approximately 22 years.

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