A proposal to use a special tax district to help redevelop the Ranchmart shopping area in Leawood is still alive, despite a lingering disagreement between city leaders and the developer over how funds from that tax should be spent.
A facelift for the stores at the northeast corner of Mission Road and 95th Street has been delayed for years as city leaders and the developer haggled. But the proposal came to life again Sept. 21 when council members, in an informal poll, said they’d allow special sales tax revenue to be spent on burying power lines at the site.
Council members said they could support funding of the power line work, which would be about $1.5 million. They also said they’d be willing to go above the 25 percent cap the city imposes on public funding of private development and that they could give the developer a more generous time frame of five to seven years to get work started.
But council members cautioned that final approval would still depend on specifics that haven’t been worked out. The city so far does not have an application for the special sales tax from the owners, the Regnier family, or their lawyer, John Petersen.
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The city gave full approval to a modest redevelopment of that corner in 2010. However, work had to begin within five years or the approval would expire. That time is nearly up and so far, no construction has begun.
Last April, the city planning commission approved a new, bigger plan that would be similar in architecture to the shops across the street to the south, which is in Overland Park. But the new plan has been pushed back repeatedly from full council consideration as the Leawood and developer have gone back and forth over the public financing.
The developer has been trying to negotiate a community improvement district for the area, which means an extra sales tax would be imposed to help pay some costs of development. The developers proposed a 1-cent sales tax for a 22-year term.
The disagreement has been in the details. Leawood’s development ordinance allows for special taxing districts to be used to improve aging shopping centers like Ranchmart. But taxpayer money can only go toward improvements that are visible to the public, said City Administrator Scott Lambers.
That means property owners can’t use it on for interior work on stores, for instance. That aspect of the city’s development ordinance sparked a disagreement with developers in another project. Recently, the city turned down a proposal for taxes to be used for interior work at a Hy-Vee at Leawood Plaza, 122nd Street and State Line Road. Hy-Vee eventually scrapped its plans and closed the store.
The council also balked when the Ranchmart developer asked for sales tax revenue to go toward interest payments on costs to bury power lines. But council members were told that it could be a deal breaker for the developer.
Buried power lines are required for Ranchmart’s latest redevelopment plan, adding to the cost. The city also has a policy to limit public investment to no more than 25 percent of the cost of the project.
But because buried power lines weren’t an issue in other recent redevelopments, like Camelot Court, council members said they would be open to loosening up that limit and allowing tax revenue to fund a bit beyond 25 percent. Because the plan is still being worked out, there are no figures yet on how much a 1-cent sales tax might raise in the shopping area or the total cost of the development, Lambers said.
The Ranchmart intersection is at the meeting point of Overland Park, Leawood and Prairie Village. Overland Park is also considering a community improvement district for improvements to its part of the intersection.
Some Leawood council members at the meeting said they’d like to see some work finally get done on Ranchmart.
“The tenants (of the center) are also the ones that are frustrated,” said Councilman Andrew Osman. “The residents are frustrated, we’re obviously frustrated given the package. I just would like it to come to a head.”
Mayor Peggy Dunn reminded the council that full approval will still depend on the specifics of the plan. But the power line burial could be a palatable use of city funds, she said, “assuming it’s an upgrading that is worthy of taxpayer subsidy because this is a public subsidy for a private development.”
The next step will happen after the council hears from the developers at its meeting Oct. 5. Petersen could not be reached for comment.
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