News on the proposals for the Green Space

In an open letter to the Mayor and the Board of Aldermen, Economic Development Administrator Tom Cole, CEcD discusses the downtown redevelopment. 

Many have asked about the status of the Downtown Redevelopment Project.  As such, please accept this as a brief update on the process.

The development process is lengthy, but I believe Flaherty & Collins will deliver a full/final proposal demonstrating all of the development costs (construction, design, engineering, etc) near the end of the first quarter of 2014.  Once those numbers have been established, I also anticipate having a full understanding of the finances they bring to the table in addition to the remaining gap that they would request the City to assist in filling.  This is typical of most large development projects.

We met with them last week and they are beginning to complete their due diligence on the property.  I also anticipate that our Joint Review Committee (Planning, Zoning, Codes, Public Works, Fire, etc) will meet with their team in the coming weeks to assure all parties understand the design guidelines and the process for developing in downtown Raytown.

In regard to incentives and rumors…at this point, we simply don’t know as we have yet to receive the real economics of the project.  Regardless, an evaluation of the incentives and the cost/benefit to the City for the project will be completed by a third party (unbiased) source once all of the data has been received.  The third party will likely either be Integra Realty Resources or Springsted.  They will do a thorough analysis and if there is not a tangible benefit to the City, we will either encourage the developer to reconfigure the project in a manner that is more beneficial to the City or simply dismiss the project all together.

In the Request for Proposal, we identified a number of incentives that are available under Missouri State Statutes.  Among them were Community Improvement Districts, Tax Increment Financing (the project area is within an existing, but unactivated TIF area), Chapter 353 and perhaps, if warranted, donation of the property.  It is critical to note that NONE of those items are guaranteed and that the Board of Aldermen has the ability to deny/dismiss any or all of them.

Again, until we know the values and economics of the project, the incentives really hold no value at this time.

Some have specifically asked about the workings of Chapter 353…if utilized in this case, the developer would pay property taxes on the real property value (the land), but not on the improvements to the property (the new construction) for a period of 10-25 years depending on the total investment.  The project area is also within a Chapter 353 designated area that I believe was approved in 2006/7.

I cannot stress enough that none of this is solidified or even in current negotiation.  The City HAS NOT offered a financial proposal to the developer and we will not offer a proposal to the developer until/unless we receive a full understanding of the economics of the proposed development.  In the event a positive cost/benefit is returned, and a third party deems it appropriate and positive to assist in filling a “financial gap,” I am only interested in assisting with the gap and not an excessive outlay of funds for an unnecessary duration.

Basically, I want to see a real shift in the economics and appeal of our downtown and the project before us has the potential to do that…of course, it all comes down to economics and we’re waiting for the numbers to be presented.

In regard to tenants, there currently are none as any potential tenant would also want to fully understand the economics of the development prior to expressing any level of interest.  I know there is concern in the community that Wal-Mart Neighborhood Market may come back.  Flaherty-Collins has never completed a project with Wal-Mart and they do not have a relationship with Wal-Mart.  I suppose stranger things have happened, but I would be quite surprised if the Neighborhood Market expressed any level of interest in again pursuing the same property.