Mission Gateway: Project proposals come and go, but construction never starts

Before wrecking balls tore through the Mission Center Mall in 2006, the shopping center at Shawnee Mission Parkway and Johnson Drive brought customers by Ray Hanf’s business.

Hanf, owner of Johnson Drive clothier Mission Fresh Fashion, said the mall’s customers would spill westward to small businesses along Mission’s main commercial strip.

It’s going on 12 years and still nothing has replaced the old mall, despite several promises from Tom Valenti, owner of the 16-acre property known as Mission Gateway.

“When that mall came down and people didn’t have to come to the area, our business went down quite a bit,” Hanf said. “If there was something there that would bring people to Mission, it would pretty much benefit everyone around here.”

He said businesses and customers on Johnson Drive have moved on after years of promises.

“You get to the acceptance phase,” Hanf said.

Valenti, a principal with Syracuse, N.Y.-based development firm Cameron Group, has not moved on. He’s due before the Mission City Council on Aug. 16 for a public hearing on his latest plan, which now includes a 75,000-square-foot office building.

City records indicate Valenti is in negotiations with a potential office tenant at Mission Gateway, which would fill out a proposed mixed-use development that also includes apartments, a hotel and retail development.

Valenti declined to identify the company, or characterize its type of business. Valenti had always left the door open for an office tenant, but negotiations have him “confident about office being included sooner rather than later.”

While the possibility of a major new business coming to Mission seems exciting, Mission leaders know to believe it when they see it.

“I’m very optimistic — I’m not counting on it,” said Mission Mayor Steve Schowengerdt.

Valenti has faced several obstacles since 2005 — the collapse of capital markets during the Great Recession, a highly competitive market for office and retail businesses, and community backlash to Walmart, which was once his anchor retail tenant.

But in the meantime over the last 12 years, myriad other developments have occurred in all directions in the Kansas City metro area .

Valenti said earlier versions of his Mission Gateway proposals sought office tenants that did not materialize and incorporated an unusual retail design for a suburban setting — putting a retailer above a Walmart — that dashed those plans.

“I hope so,” Valenti said, when asked if he thinks this latest version will be viable. “I hope so.”

The old mall site in Mission remains a craggy landscape of overgrown vegetation and dirt that year over year occupy what’s unquestionably the most prime piece of real estate in Mission, arguably in Johnson County.

“I have a lack of trust,” said Mission City Councilwoman Debbie Kring. “It’s based on going into infinity on this project.”

Fits and flops

Kring has served on the Mission City Council since 1999, which gives her a long view of the Mission Gateway project.

“I’ve been on this since the very beginning,” she said.

The beginning was October 2005 when the Cameron Group and GFI Financial Services bought the struggling Mission Center Mall from a Kansas City real estate firm then known as Copaken White & Blitt. The year before, Walmart had tried to buy the mall and turn it into a supercenter, but residents were not keen on the idea and the City Council scuttled the plan with zoning requirements that made big-box retail impossible.

The mall, like many similar enclosed shopping centers, had been slowly losing tenants and customer traffic. Dillard’s had shops at both ends of the mall, but occupancy had dropped to 30 percent by the time Valenti and his partners put ink to paper to buy the mall.

Cameron Group at the time had promise; the development firm had achieved success with retail developments in New York suburbs. Cameron Group had a well-heeled finance partner in GFI, which is based in Manhattan, N.Y.

Initial plans were heavy on residential and retail construction. Residents were skeptical of initial plans for a 16-story residential tower, which would stick out in an inner-ring suburb unaccustomed to such heights.

By 2007, the project had already started scaling down. Original plans for 350 condo units became 145; the 16-story tower became a six-story hotel. Valenti hoped to re-energize Mission Gateway with plans to open a massive aquarium by teaming up with U.S. Aquarium Team, based in Guam. The aquarium would have required sales tax revenue (STAR) bonds that allow for a developer to get money upfront for the project, which is then repaid through local and state sales taxes generated over time.

The aquarium idea appealed to Kring and others on the City Council at the time.

Then 2008 happened. Wall Street crashed. The housing market crumbled. And capital for projects like Valenti’s vaporized.

Still, Valenti kept up his habit of suggesting the start of construction was right around the corner.

“I’m hopeful in the spring we can build the whole thing,” he said late in 2008.

But a spring 2009 kickoff for Mission Gateway got pushed back to 2010. A continuing lack of consumer confidence in the global economic crisis pinched the appetite for retail.

So Valenti switched gears and sought a development plan that was heavy on office space in 2010. Kansas City’s real estate market at the time was hungry for office tenants, with both Kansas and Missouri ready to toss major incentives to companies willing to move across the state line. Politicians could take credit for creating jobs.

Valenti said he sought two major office tenants that were in play at the time — the Polsinelli law firm and AMC Entertainment Inc.

Neither panned out. Polsinelli, which traces its origins to the Country Club Plaza, stayed there and was never likely to jump to a suburban location. AMC went past Mission on Interstate 35 when it moved to Leawood’s Park Place development.

“We went down the road on a development plan that was more heavily concentrated on office,” Valenti said. “We had two key tenants that we were focusing on. In the end, it didn’t happen.

“So we came back to the city with a plan that included Walmart,” he said.

Valenti called Walmart “the rocket fuel” that would get Mission Gateway off the ground.

But the retailer instead ignited frustration from a community that had already fended off Walmart in 2004. It also stoked a political fracas with Roeland Park, whose city leaders were annoyed that a STAR bond project could wind up poaching that city’s largest retailer barely a mile away on Roe Avenue. The loss of Walmart, Roeland Park leaders said, would gut their municipal budget from the loss of a big sales tax generator.

Valenti saw a different problem with Walmart. He tried an unusual design where he would stack another retail tenant on top of Walmart. There are Walmarts that exist with a second-story retail on top, but it’s in more urban locations like New York and Chicago.

Valenti said he got close to inking a willing tenant that he would not name, but it backed out after Valenti made numerous concessions.

“We went above and beyond,” Valenti now says. “They said they were an at-grade, suburban tenant.”

Sprout’s, a grocer that had agreed to go to Mission Gateway, also backed out.

By 2014, the aquarium idea was gone and frustration with attempts at a Walmart mounted. A Mission City election that year resulted in two candidates who campaigned against a Walmart winning voter approval, which stacked the city council against Valenti’s plan.

In 2016, Walmart was out after the retailer decided to remodel its Roeland Park location.

A last attempt?

Valenti earlier this year made a pledge: He would start working on building apartments along Johnson Drive at Mission Gateway even without having received development incentives. It would be a show of good faith that he would finally get work underway.

It’s almost July, and no work has started. And Valenti is changing his plan once again.

He is also behind on his property taxes on the project.

“I’m a little concerned about taxes that haven’t been paid up,” said Nick Schlossmacher, one of the council members who reached office in 2014 by campaigning against Walmart. “They’re still behind.”

Valenti said he plans to catch up on the property tax bill once he secures a loan for the project.

It doesn’t inspire confidence among some members of the Mission City Council.

“I think something will get off the ground,” Kring said. “My question is: Will it be this developer, or some other developer?”

This story was originally published July 3, 2017 at 7:00 AM with the headline "Mission Gateway: Project proposals come and go, but construction never starts."