Archive for Monday, July 2, 2012

Bonner council gives preliminary support to new financing district

July 2, 2012

The Bonner Springs City Council last week gave preliminary support to a second tax increment financing district in the city.

In a workshop prior to its regular meeting, the council reached a general consensus of support for the proposal of a second Community Improvement District. It would cover the rest of the shopping center for which the city’s first district was approved, on the southwest corner of Kansas Avenue and Kansas Highway 7. The district would help the same developer, David Christie, purchase and renovate the remainder of the shopping center.

“What we’re asking to gain tonight is consensus for Mr. Christie before he takes the plunge and moves forward with this, so he has some assurance that he could get this incentive,” said Marcia Harrington, the city’s community and economic development director.

Harrington explained the basics of how CIDs work, allowing property owners to use additional property or sales taxes to fund improvements to their property.

In January 2011, the city approved a CID for a portion of the shopping center including the former Cummins Tool building, which was redeveloped for Nuts and Bolts True Value Hardware; the retail strip center on the south; a pad site that is to be developed with a restaurant; and McDonald’s.

At the time, the council was told that Christie hoped to purchase and redevelop the rest of the retail center, which includes The Dollar Tree, the Goodwill Store, the space formerly occupied by Aaron’s Rents and another vacant space.

Harrington said the total project costs are $3.4 million, and the CID request would be for $1.22 million to be paid through sales and property taxes generated in the district until that amount is met or within 15 years, whichever occurs first.

Like the first district, the district application was for an additional 1 percent sales tax within the district, meaning the sales tax rate in both districts would be 10.05 percent, and 50 percent of the city’s 1 percent sales tax, though only for any businesses that would locate in the two currently-vacant spaces. The developer also would recoup incremental property tax.

While some council members noted how good the improvements in the first district looked, George Cooper, Racheal Haas and Jack Knight remained unsure if they wanted to support another CID, while Eric Freeman said he would not support it.

Mayor Clausie Smith reminded the council that the city would continue to receive the current amount of property taxes it was receiving, as Christie would get only the increment once the property was improved. John Helin, city manager, added that the developer was paying all the up front costs out of his own pocket, so none of the city’s money was at risk.

Councilmember Tom Stephens noted that the additional sales tax wasn’t forced upon the residents, because they could choose to shop elsewhere, and the three undecided council members agreed they would give the district their support, though Freeman continued his opposition.

Councilmember Rodger Shannon did not attend the meeting.

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