MISSION, Kan. —Final plans for the Mission Gateway project will once again be delayed as developers attempt to secure an additional $19million in private funding.
During a special meeting Monday the Mission City Council approved a preliminary development plan for the Mission Gateway project, but final plans aren’t 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 decrease 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. This would bring the total number of proposed units to 372, an increase of 121% compared to the plan approved by the council back in 2016.
Councilmembers Ken Davis and Hillary Parker Thomas voted against the development plan.
“I believe this project plan and its elements, its aesthetic and its phasing are not a good fit for what I consider to be the entrance of Mission. We’ve waited a long time for a worthy project on this site and I don’t think this is it,” Thomas said.
The council also voted 7-1 Monday night to approve a bond term extension for the project with only councilmember Thomas voting in opposition.
In 2018, the city issued industrial revenue bonds (IRB) for the project in order to provide the developer, Aryeh Realty, with a sales tax exemption for construction materials. Those bonds are set to mature at the end of this year.
“By providing the extension via this amendment, it provides a more streamline, cost-effective manner of keeping this incentive in place. There’s no other structural changes to the bonds. It would still be repayable by the developer with no city liability,” Kevin Wempe with Gilmore and Bell said.
City Administrator Laura Smith said based on updated term sheets from the developer’s primary lender Bank OZK and the mezzanine lender Bentall Green Oak (BGO), the developer will need to secure an additional $19million to make up for an overall decreased loan amount.
“The biggest change that was noted during the review of the updated term sheets was while Bank OZK has proposed to finance the same amount of project costs as previously, BGO has reduced its proposed loan amount. This is really a factor of those market conditions,” Smith said.
Smith said final action on the proposed project will be tabled until January to give the developer time to secure additional funding.
“I think we are going to do our best to try and pull together that remaining equity gap by January, but it’s going to be a heavy lift. Especially not having the TIF and CID in hand to be able to show those investors,” Matt Valenti with Cameron Group, the parent company of Aryeh Realty, said.
In 2023, the council is expected to vote on a restated redevelopment agreement for Mission Gateway.
“The redevelopment agreement does contain a commitment to maintain 10% of the total residential units as attainable housing at 60% of area median income (AMI) for the full 20-year TIF term,” Smith said.
The council will also consider the developers 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. That 20-year TIF collection period for the project began in January of 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 currently is within an established Community Improvement District (CID). The developer has submitted a petition requesting the city increase the CID sales tax collection for the property from 1% to 2%. According to city records, the CID collection would begin in 2024 and remain in place for approximately 22 years.