Shawnee Mission district gives TIF more scrutiny
Shawnee Mission School District officials acknowledge that in recent years they haven’t paid much attention to the influx of development projects in Johnson County receiving tax incentives.
That is changing as a wave of new developments could potentially bring hundreds of new students to the district but virtually no additional revenue to accommodate them.
“The impact on us in relation to student enrollment is a very significant question,” Superintendent Jim Hinson said Wednesday during a school board meeting to review two new developments on Metcalf Avenue.
The board ultimately elected not to oppose tax incentives proposed for the mixed-use projects at 95th Street and at 91st Street.
The Overland Park City Council last month approved creating redevelopment districts for the sites, making them both eligible for tax-increment financing, or TIF.
TIF is considered a tool to encourage development by allowing developers to use taxes generated by a new development over a certain number of years to pay for the construction of roads, storm drains and other necessary public infrastructure on the site.
During that time, government taxing bodies like the school district can’t use that tax money to cope with new growth or normal expenses.
Lane4 Property Group plans to demolish the Metcalf South Shopping Center and the K-Mart shopping center at 95th Street and Metcalf Avenue, replacing them with a $320 million mix of boutique and big box shops, office space and up to 400 apartments.
At the northeast corner of 91st Street and Metcalf, developers envision a $100 million redevelopment of the Gateway Plaza shopping center with commercial areas and more than 400 apartments built in two phases.
While the apartments on the two sites aren’t expected to attract many new families, Deputy Superintendent Ken Southwick said they could have a “halo” effect, attracting nearby homeowners and providing room for new families to move into the area.
Southwick met with developers of the two projects and told the board that they are pursuing TIF agreements with Overland Park officials that could withhold all or part of all new taxes generated on the sites for up to 22 years. Under law, the school board could have vetoed those agreements.
Instead, board members agreed that revitalizing those areas of Metcalf would ultimately benefit the community.
Hinson noted that the current school financing formula actually rewards the district with additional operational funds if assessed property values decline, so the district wouldn’t stand to gain much revenue from improvements on the sites anyway — an arrangement even he acknowledged “doesn’t make sense.”
But the district would lose out on additional capital outlay dollars generated by improvements on the sites.
Combining projects either being discussed or under construction in Lenexa, Westwood, Prairie Village, Merriam, Shawnee, and elsewhere in Overland Park, Hinson said the district could see “multiple thousands of new units” attracting families with little way to pay for additional capacity other than through existing bonds.
“Our ability to construct buildings or have additions for the increase in student enrollment does not exist,” he said, adding that some schools in the district are already full.
Board member Cindy Neighbor expressed concern that residents may cry foul at having to pay the cost of growth while the developers do not.
“I’m not anti-business, I’m not anti-growth, but it’s a question I see coming from people who say, ‘Enough is enough,’” Neighbor said.
This story was originally published April 20, 2015 at 12:53 PM with the headline "Shawnee Mission district gives TIF more scrutiny."