Merriam greenlights incentives for apartment complex near new Trader Joe’s
In order to bring a multimillion-dollar redevelopment to life that will be home to a beloved grocery store, the Merriam City Council agreed to shuffle some incentive boundaries to make sure the developer can lift the housing portion of the project off the ground.
Last summer, the Merriam City Council approved a $102 million mixed-use development on IKEA Way, W. 62nd Terrace and Shawnee Mission Parkway proposed by Slater Investors LLC and represented by Overland Park-based developer Drake Development.
The development will feature more than 200 apartment units — with at least 18 affordable units for the first five years — over 12,000 square feet of retail space, and a new, 12,500 square-foot Trader Joe’s.
As part of the agreement, the project will be funded by an existing Tax Increment Financing District — a tool where the government agrees to divert future incremental gains in property tax on the site to reimburse developers for expenses.
Merriam pledged to contribute up to $13.7 million in TIF reimbursements for expenses related to the parking structure and the development will receive industrial revenue bonds to abate construction costs and a 10-year property abatement on the apartment complex.
But the City Council needed to approve a new ordinance on Monday that carves out the apartments from the encompassing TIF district.
“The reason for that is to provide property tax abatement,” Merriam Community Development Director Bryan Dyer told councilmembers on Monday. “You can’t provide property tax abatement for an item within the TIF (tax increment financing) district.”
The apartment complex, which will be known as the Serrano Apartments, and the two-level parking structure will be built in the same structure, but the incentives treat them as two distinct components — residential and parking, he said.
Kansas statute allows cities to do specific carve outs from a redevelopment district by passing an ordinance, Dyer said. With the new ordinance, the abatement could save the developer approximately $5.5 million, according to the redevelopment agreement.
If Drake fails to complete certain portions of the project by June 24, 2030, or if the developer doesn’t make at least 18 affordable apartment units for the allotted period of time, the city can suspend or reduce its incentive payments.
The City Council is scheduled to discuss the project again on Feb. 9 to issue industrial revenue bonds to help provide sales tax abatement on construction materials.