A plan for a $49 million senior living and retail development at 81st Street and Metcalf Avenue in Overland Park hit a snag this week when the city council did not back a sales tax break for construction equipment.
After a lengthy discussion, the council declined by 6-5 a motion to approve economic development revenue bonds for Avenue 81, a project on the east side of Metcalf near where the former White Haven Motor Lodge used to be. Council members debated whether the project was an appropriate use of the bonds, which are intended to seed development in areas that have challenges.
The action came about a week after the council’s Finance, Administration and Economic Development Committee declined to give its approval, also on a split vote.
Michael McKeen, president of EPC Real Estate Group, which owns the property, said the company will consider what the next step is to developing the area.
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The developer had asked for bonds that would have saved it $1.5 million on the approximately $17 million in construction equipment and furnishings it would buy. About $190,000 of its tax savings would have gone to the city.
Avenue 81 is about a $49 million project planned for the northeast corner of 81st and Metcalf featuring a three- and four-story building of about 73,000 square feet with retail on the ground floor and 157 residential units above. The housing will be a mixture of independent and assisted senior living.
Council members who voted against the bonds gave a variety of reasons. Council member Terry Goodman said other downtown projects have already provided the “seeds” that have made the whole area desirable enough that the incentive for this project is not necessary. He said the city should consider whether the project would go forward without the public assistance.
“I think what the developer is telling us in this case is, yes it will. It’s just a question of what it’s going to look like,” he said.
The council also got briefly tied up in the question of whether to require the developer to pay part of the cost of adding a “Z crossing” for pedestrians crossing Metcalf. A Z crossing is a type of landscaped walkway in which pedestrians cross two lanes, walk briefly at an angle in the protected median and then cross the other two lanes. It is considered safer and, at $1 million, is less expensive than an elevated walkway. The council briefly considered asking the developer to commit to paying half of a Z walkway before taking its vote.
Other council members supported the bonds, saying the city’s tax break for this project were small compared with other projects asking for tax increment financing and community improvement districts. Those types of assistance have not been requested by Avenue 81.
Council member Dave Janson said loss of the sales tax break may cause the developer to change the look of the building. “I don’t want a piece of junk on Metcalf,” he said.
“We’ve spent millions of dollars in downtown Overland Park, it’s paid off and I don’t want to see anything that is inconsistent with its neighbor.” he said, referencing the nearby Avenue 80 project.