Overland Park OKs tax breaks for $1.12 billion Black & Veatch mega development

The Overland Park City Council voted unanimously Monday night to approve sweeping tax incentives for a new billion-dollar project in Overland Park off 115th Street and Lamar Avenue.

Global engineering firm Black & Veatch proposed a redevelopment plan for its headquarters and the surrounding area, including plans for multiple forms of housing, retail and a park.

Monday night marked the first public hearing to focus on the tax incentives – in particular, establishing a tax increment financing (TIF) district for the development. More hearings on specific project plans and other special taxes in addition to the TIF district are to come.

The project proposal includes 612,000 square feet of new space for the company’s world headquarters and 1,884 new housing units in a mix of apartments, townhomes and condos. The company also proposes an additional 550,000 square feet of retail space, a 160-room hotel, parking structures for the development and surrounding area, and a new public park in the center of the development.

The plan would create more than 20 new buildings across the 80-acre site.

Black & Veatch is one of the largest employers in the metro, generating $4.7 billion in revenue last year, according to Forbes. Its engineering, consulting and construction work focuses on developing infrastructure for the energy, water, oil, gas, mining, cybersecurity and transportation industries.

Funding sources for the project

Initially, Black & Veatch proposed a mix of public and private financing for its $1.12 billion project. The company would cover $893 million of the project’s costs (about 72% of the total) and requested $227.7 million in bonds to be paid back through the TIF.

Additionally, the company wants to establish a community improvement district (CID) to garner $19.9 million from an added 2% sales tax and requested a sales tax exemption on construction materials.

The CID area where the special sales tax would be added would include areas Black & Veatch doesn’t own, including areas west of Lamar Avenue, which have approved plans for multi-family residential improvements. Any requests for projects in these areas will require associated amendments with the current development agreements.

City Council’s support for tax breaks

Governments use TIF districts to help pay for projects in areas needing development. In most cases, the money is issued in bonds and then paid back from increases in property tax revenues that would not have occurred without the development.

At Monday’s meeting, assistant city manager Jack Messer said the TIF district for Black & Veatch’s project is “intended to catch (a property) in its decline and move it to a period of growth.”

The approved district will cover the project area, which is bordered by Glenwood Street on the west, College Boulevard on the north, Nall Avenue on the east and 115th Street on the south, according to a conservation area analysis.

City staff recommended the council approve the incentives.

After an open public comment session during which no one spoke, the council unanimously passed the ordinance.

Mayor Curt Skoog said he hopes residents know “this is more than just building Black & Veatch’s new headquarters.”

“This is really the first step in implementing FrameworkOP, our new comprehensive plan,” Skoog said, adding that the plan focuses on implementing developments to ensure industry is successful.

Next steps

Just because the ordinance passed does not mean TIF funds are guaranteed. Johnson County and the Blue Valley School District have 30 days to find the TIF district to be having an “adverse effect,” according to a staff report. If they raise no concerns, City Council has to approve TIF project plans at a future public hearing.

Council member Melissa Cheatham said her support for the TIF district Monday does not necessarily indicate future support. That will depend on the details of the project plans. She said she will consider the sustainability of buildings and attainability of housing, among other things.

“I’m going to be looking at those project plans very carefully in the future, but I’m glad to be moving forward,” Cheatham said.

The developers are currently scheduled for a zoning meeting with the city’s planning commission in September, Messer said.

Staff said their next steps include negotiating the development agreement with Black & Veatch and finalizing the CID petition.

The city could work with Black & Veatch and the adjacent Galleria property owners to establish a CID and transportation development district that bring funding both to those private developments and city properties. Preliminary discussions with developers indicate general support for the plan, according to city staff.