MISSION, Kan. -Final plans for the Mission Gateway project will once again be delayed as developers try to secure an additional $19 million in private funding.
In a special meeting Monday the Mission City Council approved a preliminary development plan for the Mission Gate project, but the final plan is not expected to be approved until next year.
The council voted 6-2 to approve a new preliminary development plan for the project. That updated plan would reduce the proposed food hall space by roughly 14,000 square feet and incorporate it into a new apartment building at the corner of Johnson Drive and Roe Ave. compared to the plan approved by the council in 2016.
Council members Ken Davis and Hillary Parker Thomas voted against the development plan.
“I believe the plan of this project and its elements, aesthetics and phasing are not appropriate for what I consider to be a Mission entrance. We have waited a long time for a project worthy of this site and I did not expect this,” said Thomas.
The council also voted 7-1 Monday night to approve a bond term extension for the project with only council member Thomas voting in opposition.
In 2018, the city issued an industrial revenue bond (IRB) for the project to provide the developer, Aryeh Realty, with a sales tax exemption for construction materials. The bond is set to mature at the end of this year.
“By providing an extension through this amendment, it provides a more efficient, cost-effective way to keep these incentives in place. There are no other structural changes to the bond. It will still be repaid by the developer without the city’s liability,” said Kevin Wempe and Gilmore. and Bell.
City Administrator Laura Smith said based on an updated term sheet from the developer’s primary lender OZK Bank and mezzanine lender Bentall Green Oak (BGO), the developer must secure an additional $19 million to make up for the reduced loan amount.
“The biggest change noted when reviewing the updated term sheet is that while Bank OZK proposed to finance the same amount of project costs as before, BGO has reduced the amount of the proposed loan. This is a factor of the market situation,” said Smith.
Smith said final action on the proposed project will be tabled until January to give developers time to secure additional funding.
“I think we will do our best to try and bridge the remaining equity gap by January, but it will be a heavy burden. Especially not having the TIF and CID in hand to be able to show those investors,” said Matt Valenti with Cameron Group, Aryeh Realty parent company.
In 2023, the council is expected to vote on another redevelopment agreement for Mission Gateway.
“The redevelopment agreement does not contain a commitment to maintain 10% of the total residential units as attainable housing at 60% area median income (AMI) for the full 20-year TIF term,” said Smith.
The council will also consider the developer’s request to rerack tax incentives previously approved for the project.
In 2017, the city approved a tax increment financing (TIF) redevelopment project plan for Mission Gateway. The 20-year TIF collection period for the project began in January 2019. The developer has since submitted a Fifth Amended TIF Redevelopment Project Plan, which if approved would reset the TIF collection period.
The Gateway Project is currently under Community Improvement District (CID). Developers have submitted a petition asking the city to increase CID sales tax collection for properties from 1% to 2%. According to city records, the CID collection will begin in 2024 and remain in place for about 22 years.