Lenexa council OKs two taxing districts to help fund hotel and conference center

04/17/2014 10:50 AM

04/17/2014 10:51 AM

In what Mayor Mike Boehm described as a “watershed moment,” for Lenexa’s City Center development, the City Council this week approved two special taxing districts to help fund construction of a hotel and conference center.

The districts will pave the way for a 127-room Hyatt Place hotel and adjacent conference center and meeting facility, plus a 6,500-square-foot upscale restaurant in City Center East, near Interstate 435 and 87th Street. Proceeds from the taxes will go toward some expenses for developing and building on the site.

“It’s a watershed moment for Lenexa and for the City Center East,” Boehm said. “We will be able to host things here that we can’t host in the city now.” Boehm said the conference center will fulfill a need for meeting room space in Lenexa. And residents have consistently said they want more sit-down restaurants, Boehm said.

The area is just west of the interstate, between 87th and 89th streets, with Ryckert Street its western boundary.

The council approved both a Community Improvement District and a Tax Increment Financing District to raise money for the project.

The CID involves a one-percent sales tax in that area beginning in 2016 and lasting 22 years. It is expected to raise around $214,000 per year.

The TIF district sets aside parts of the expected increases in taxes in the area for financing over a 20-year period.

The 8.6 acres in question are owned by the city, but part of it is under contract to be sold to the two developers of the site. Groundbreaking on the project is set for May 6.

The council approved the agreement unanimously and with little discussion. No one spoke at either of two public hearings. Council member Tom Nolte said the hotel and conference center will provide a distinctive gateway from the interstate into Lenexa.

“This is the space we’ve wanted,” he said. “When we have city events and chamber of commerce events we can have them on city property.” The mayor’s recent state-of-the-city speech was held in Overland Park.

The complex financing agreements may not be the city’s last on the project. Boehm said another CID will likely come before the council in a few months for another corner of City Center East.

Nolte and others at the meeting noted that the most recent agreements represent an improved outlook for development in that area, which has had fits and starts over the years. The city has been trying to develop along nearby Renner Road since the first plan for an office park in the 1980s. By 2000, city leaders decided to go for a from-scratch mixed-use development, focusing on apartments, businesses, office space and walkability.

But things slowed down during the Great Recession. An unfinished parking garage sat in the area as recently as 2012 and eventually was torn down.

Now the development finally seems to have gained traction, city leaders say. Perceptive Software is set to move in to another part of the area in early summer, more apartments are going up and street work at the intersection of 89th and Penrose Streets is expected to be completed soon.

“I’m pleased with the outcome,” said Nolte of the financing agreements the council approved. “There were some moments when it could have been different.”

Google update

Also at the meeting, the council heard a brief update on Google’s progress on bringing high-speed internet to the area.

Rachel Hack, community manager for Google, said work will start soon on the first stage of the fiber system in Johnson County, part of which will pass through Lenexa. Construction begins with a “backbone” line that branches off into the county, eventually to individual homes. So sign-up deadlines are still a way off, she said.

When it’s time to sign up, Hack said the county will be divided into regions with different sign-up deadlines. “Once it’s your turn, you won’t be able to miss us,” because of marketing campaigns, she said.

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