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Bill coming due for roads and sewers on Parkville land that hasn’t developed

A group of property owners in Parkville formed special districts in 2006 to assess themselves to pay for infrastructure improvements to spur development. The single development constructed since that time is a gas station/convenience store called The Station. The city is responsible for any assessments not paid for the bonds that were issued to finance the improvements.
A group of property owners in Parkville formed special districts in 2006 to assess themselves to pay for infrastructure improvements to spur development. The single development constructed since that time is a gas station/convenience store called The Station. The city is responsible for any assessments not paid for the bonds that were issued to finance the improvements. Submitted photo

Back in 2006, several people who owned property at Missouri 45 and Interstate 435 in Parkville voted to form special districts to pay for new infrastructure they saw as a way to develop their 337-plus acres.

It seemed like a good idea before the Great Recession arrived, but looks very different now.

Since 2006, only one business has been constructed on the land, even though the sewer and road improvements have been completed. But now it’s payback time, and some property owners say the yearly cost is stifling the growth that the infrastructure was supposed to promote.

It’s possible that the city will be stuck with part of the bill.

The property owners who formed the Neighborhood Improvement Districts worked with the city to finance the new infrastructure through limited general obligation bonds. The landowners are responsible for paying back the money in a series of annual assessments over 20 years.

The first of those payments is due Dec. 31.

For individual property owners, the annual bills range from a few thousand dollars to almost $360,000, according to a city document. For all 10 tracts of property, the annual assessment is $669,894.74.

The nature of the public bonds is such that Parkville is liable for the assessments if the property owners do not or cannot pay. The city has established a $1.3 million emergency reserve fund, should it have to pay some of the costs.

“The bonds are backed by the full faith and credit of the city of Parkville,” said City Administrator Lauren Palmer, adding the bonds are a common financing method for this type of development.

Palmer said some assessments have been paid, but she did not offer a specific dollar amount.

The city’s interest in the project is its desire “to accommodate appropriate development to support community growth and to aesthetically signify the entrance to Parkville,” its website says.

But because of the recession and other factors, “private development did not occur as envisioned or scheduled by the original owners,” the website states. “The majority of properties are now bank owned or controlled.”

Parkville Mayor Nan Johnston said the city will probably have to work with the banks and other property owners “on some sort of incentives” to encourage development because economic conditions are different now.

Earlier this month, the Parkville Board of Aldermen discussed the lack of development at the intersection, the potential financial consequences to the city and possible incentives the city might offer.

Sean Ackerson, Parkville’s assistant city administrator/community development director, said the board gave staff “direction to continue to work and negotiate with the property owners and parties interested in the properties.”

The mayor told The Star late last week that the property owners assessed themselves and that the banks knew about the assessments when they lent money to those previous owners.

The assessments “do make it more difficult,” she added.

But, she said: “I think the property owners will pay the assessments and everything will be fine.”

The single development constructed since 2006 is a gas station/convenience store called The Station, owned by Alan Hoambrecker. He also owns the land where the station, which opened in June 2010, is situated.

“It has been a good business for me,” he said, adding he was part of the planning process during the creation of the Neighborhood Improvement Districts.

“I drove by (the area) for 20 years and I always felt there was a need out here (for a station and store),” he said. The closest one, he said, is four miles east.

Nothing has happened with the other properties, though.

The Bank of Blue Valley, based in Overland Park, owns three tracts subject to NID assessment totaling about $225,000 a year.

Bob Regnier, president of the Bank of Blue Valley, said: “As a general statement, I think Parkville is a great city … and it is a wonderful intersection.”

However, Regnier added, the NID assessment is a real impediment to development. The bank has made some payments, he said, but “we are suggesting to the city ... it is going to be difficult to develop without some sort of assistance by the city in some shape or form.”

Although Parkville is considering incentives, Regnier said, the city does not have “flexibility” on the NID assessments.

The infrastructure project made sewers accessible to all corners of the intersection, Regnier said, “but at a very high price.”

“The world was different in 2006,” he said. “The reality of the development is … it was put together by a previous owner.”

The bank is trying to sell the land and might even lend the money for construction, he said, but many developers are looking for less expensive properties that do not include the additional assessment costs. He said it might be an “extended period of time” before someone is “optimistic enough” to develop the land.

The tract owned by Overland Park-based Peoples Bank, 45 Park Place LLC, has an annual assessment of $359,909.32.

Mike Bates, vice president of special assets for Peoples Bank, said by email Monday that the bank has asked the city to reduce the assessment. He said bank officials had not made a decision on this year’s payment.

The property is for sale and “we have had some interest,” Bates said last week, but the assessments make it very difficult for a developer.

A “high-end” residential development abuts the property, Bates said, and more residential growth might be the way for the area to develop.

The city’s master plan envisions the entire NID acreage as a combination of commercial, office and residential uses, with the highest density development near the highway interchange.

Recently, the city completed a study on the feasibility of a sports complex and other uses and the Parkville Economic Development Council appointed a task force to explore and promote development of the intersection.

“The task force concluded that a soccer complex, or some similar youth sports facility, may potentially be a viable economic development project for the southeast quadrant of the intersection,” the city said on its website.

However, the study concluded that a sports complex “would not generate the level of associated economic development desired.” It said the most likely successful development is upscale apartments.

Assistant City Administrator Ackerson said the city has approved rezoning, plats and development plans for some of the properties, but The Station is the only new construction in the NID area.

Hoambrecker, the gas station owner, said there are several residential subdivisions in the area, including Thousand Oaks, Hidden Valley and Countrywood.

“More rooftops will bring more development out here,” he said.

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