Despite coming down hard on a developer who has failed to meet several deadlines in revitalizing a blighted site off Shawnee Mission Parkway, an Overland Park council committee agreed to give him another shot.
Wes Grammer, who is redeveloping the Metcalf Crossing site at 7240 Shawnee Mission Parkway, is at risk of losing tax incentives approved for the project. Wednesday night, Grammer asked the city for a third deadline extension, explaining he can’t demolish two shuttered, crime-ridden hotels by the end of the month.
Saying the developer has lost his credibility and broken several promises, committee members refused to extend the deadline.
“I am concerned about the fact that I don’t know whether 60 days will bleed into six months or a year from now,” Councilman John Thompson said. “Time is still of the essence.”
But both sides worry that the site — which officials say is still attracting drug users and squatters — will remain vacant for years if the agreement falls through. So the city agreed to work with the developer on a new plan, directing city staff to reexamine tax incentives and the timeline for the project in the coming weeks.
If the site is not demolished by Oct. 1, the developer will be in default on the incentive agreement, and it will no longer be in effect. The developer will have 30 days to ask the city to reconsider.
“We understand that this Council, this city and this community want this hotel down. We want this hotel down. We don’t relish people trying to squat on our property,” said Korb Maxwell, an attorney representing the developer. “It’s expensive to hold a property like this. It costs (the developer) money every single day. We’re trying to move this forward as fast as we can.”
In June 2018, the City Council approved tax incentives for the revitalization of the 5-acre site, on the northwest corner of Metcalf and Shawnee Mission Parkway. Council members said the main goal was remediating blight, mainly brought on by the deteriorating, and now empty, Knights Inn and Ramada hotels, which generated numerous police calls and drained city resources.
Excited to see the hotels demolished, the City Council approved nearly $6 million in incentives, through tax increment financing, or TIF, and a 1% community improvement district sales tax levied on the site. Grammer agreed to build a $39 million commercial development, with a self-storage facility, restaurant and retail, plus a four-story hotel.
Under the agreement, the incentives would reimburse the developer for part of the cost of buying the property, demolishing the hotels and preparing the site for new construction. The funds are paid as developers incur costs, so they reap the full benefits only if they complete the project.
But the majority of Grammer’s plans have fallen through since then. Maxwell said he’s failed to attract any hotel to the site, so he switched to an office building. Most recently, the developer said he would build a car wash, rather than drive-thru restaurants and retail.
Maxwell said the developer has lost around $250,000 of the TIF reimbursement because the hotel will not be built. And it took until late August to secure a $2 million loan to cover the cost of demolition, Maxwell said.
“The promises you made in the past have severely undermined your credibility,” said committee chairman Dave White. “Frankly, I was under the impression that the developer had the resources to finance the demolition, and everything else was going to come after that. What you presented tonight was you were waiting for the lender to give you the money to let you do demolition. I’m sorry but that’s a personal problem; that’s not a city problem.”
Because project plans have drastically changed, the committee instructed city staff and the developer to draft a new agreement, including updated projections for the incentive reimbursements. The projections are expected to be much lower considering the original agreement included the expected sales tax revenue from the hotel and retail sites, rather than the now-proposed car wash.
Councilman Logan Heley also requested the developer hold a community meeting with neighbors to receive feedback on the plans.
The committee agreed to move quickly to rework the development agreement, worried about the deteriorating hotels sitting on the Metcalf Crossing site for much longer. A new agreement might be up for discussion as early as next month.