Mission Gateway debacle may go to trial, holding up any future plans for former mall site

The partially built structures at Mission Gateway could sit untouched for another year or more as the site’s future remains ensnared in court.

“We are in a situation where this case needs to be brought to a final decision,” Johnson County Superior Court Judge Robert Wonnell said during the site’s summary judgement hearing on Monday.

But instead of reaching a decision that would allow the site to be sold and future development plans to be considered, the judge suggested a trial may be necessary.

Two years ago, the Mission City Council approved a $268 million mixed-use project that would’ve included a 90,000-square-foot Cinergy Entertainment complex, 50,000 square feet of commercial or restaurant space, 370 apartment units and a parking garage. The second face would have included a 200-room hotel and 100,000 square feet of office space or a medical facility.

But the plans never materialized because of more than $449,000 in unpaid taxes and a foreclosure lawsuit. The city of Mission ultimately pulled the plug on its tax incentives and tossed its fifth iteration of a redevelopment agreement with the developer last February.

The developer, Aryeh Realty LLC, owes $26 million to Metropolitan Commercial Bank after it defaulted on its loan — which sparked the bank’s ongoing lawsuit in April 2023.

On top of that, claims from several contractors who were never paid for their work conducted on the site total about $10.5 million.

Judge Wonnell is now determining who’s first in line to get reimbursed, the bank or the contractors, although the debts are predicted to exceed the likely value of the property if the bank forces a sale. Aryeh — the development company that remains the property owner, according to city documents — will be on the hook for any remaining shortfalls.

Wonnell has to determine who worked with Aryeh first in the years-long saga, but he wasn’t ready to make a decision after this week’s three-hour hearing. More than a dozen parties are involved with thousands of submitted documents to read through.

Instead, Wonnell said that the case might move toward trial, an uncommon step in mortgage and foreclosure lawsuits. He said the move might be necessary to address ongoing questions about the priority order of the parties involved — which would determine who gets paid back first from the site’s sale — and the alleged promises Aryeh claims the bank made around its foreclosure.

Wonnell set trial dates for November and December, which are subject to change after attorneys meet in February to confirm the timeline or if the judge comes to a decision before the trial can begin. He said that he’d like to wrap the case up this year, but post-trial briefings could occur and push the case into 2026.

State of the Mission Gateway ruins

In the meantime, the city’s hands are tied. Mission isn’t a part of any of the litigation, and it has to wait until the site is sold and a developer comes forward with a new proposal before anything can change, according to discussion in a City Council meeting last week about the site’s zoning.

“As we await progress in the Johnson County district courts, the city’s efforts have been focused on consistently issuing code enforcement notices and abating issues when we can,” according to the council’s meeting packet.

The only way Mission could gain control of the property would be by purchasing it from the developer as part of a real estate transaction, or by using eminent domain to acquire the site for a public purpose, like a park. The city “regularly monitors” the site for any code violations, but if they go unaddressed, it “will abate where it makes sense from both a safety and cost perspective.”

“The city will continue to explore more aggressive ways to address the site condition, but we want to be careful not to spend hundreds of thousands of taxpayer dollars — which could take years to be repaid — to make the site more presentable,” the packet stated.

While officials can’t do anything about the site today, the City Council met to discuss what they would like to see happen at the site in the future — highlighting vertical, mixed-use development with retail on the ground floor and apartments above, and open green spaces or gathering spaces in order to promote walkability.

Mayor Sollie Flora said during the meeting that the city has had conversations with a few developers who might be interested in trying to pursue the site if it changes ownership.

“I think we view this as a generational type of opportunity for the city. It’s our largest undeveloped site,” Flora said. “I think I can speak for the group in saying we are not going to be so frustrated with the condition of the site and Gateway’s history so as to accept a bad project. We’re looking for a winning project for this site.”