Redevelopment of Metro North Mall important for Northland, R-3 school district

BRYCE MERENESS/Citizen photo Metro North Mall, located on NW Barry Road in western Clay County, has been closed since April of 2014. The property’s new owner has proposed a plan to level the iconic shopping center in an effort to rebuild and revitalize the area. A plan continues to redevelop Metro North Mall, and although the now-closed facility sits on the western edge of Clay County, the Platte County R-3 School District stands to benefit from potential revitalization.

The Kansas City Tax Increment Financing Commission held a scheduled meeting Wednesday, Oct. 14 with a chance to move forward on the proposed plan. IAS Partners, Ltd. bought the property from MD Management in March of this year, and working with developer Antioch Crossing, came up with a plan to demolish the existing facility and replace it with about 950,000 square feet of commercial and retail space another nearly 200,000 square feet of residential space.

To fund the project, paperwork filed asks for 100 percent abatement on property tax and 50 percent on sales taxes, likely for span of 20 or 23 years. Platte County R-3 superintendent Dr. Mike Reik, serving on the TIF commission for this project, said he supports the project but hopes to make the taxing entities involved more equitable partners.

“The real mechanical pieces and the details are a little premature right now,” Reik said, “but yes, it could be easy for someone in Platte City to not know this has an impact on their school district. As to how much concern they should have right now, we’re probably just not there yet, but knowing that it’s redeveloping and it does have an impact on the school district is something we want to make sure our public knows about.”

Tax increment financing (TIF) projects is a public financing method, allowing developers to use abated tax money as a subsidy for redevelopment, infrastructure and other community-improvement projects.

Currently, the R-3 school district receives property tax on the Metro North Mall complex, a 1.3 million square foot indoor mall opened in 1976 and shuttered in 2014. Currently, only Macy’s department store operates on the actual mall site, although much of the parking lot space is being leased out for vehicle storage. Valuation of the property continues to decline, and redevelopment offers the best chance to keep it from becoming blighted and condemned in the short term.

However, Metro North Mall once served as a hive of activity in the area, and it became passé in the span of about 25 years.

“Typically, these type of developments don’t have a long life,” Reik said. “I think you can reasonably say the possibility of this enjoying some popularity, high traffic and profit for a period of time is likely and then you’ll probably see a period of decline and then ultimately it will be declared blighted and then the chances of it being redeveloped again with tax incentives I think is a realistic concern that everyone should have when considering what type of revenue this will produce in year 23 and on.”

Antioch Crossing, which has already worked on mall redevelopment projects at the former Antioch and Blue Ridge malls in Kansas City, Mo., plans to bring an outdoor shopping center plan. Dubbed Metro North Crossing for now, the site would likely keep Macy’s as an anchor tenant while looking to add another anchor and a grocer — likely a specialty or niche store like Trader Joe’s or Whole Foods.

In addition, it would contain retail, entertainment and dining options, and the current Red Lobster and Olive Garden restaurants would be tied in to the site. An apartment complex would be included on the backside of the current lot but would not qualify as part of the TIF.

The problem with the TIF proposal for Reik comes with how the tax money collected would be spread around, even though Platte County R-3 benefits more than than any other property taxing entity.

For example, the City of Kansas City would gain more than $32 million based on a projections over the 23-year life of the TIF with Clay County at more than $15 million. The R-3 school district sits at $1.7 million, while entities such as Mid-Continent Public Library would stand to lose hundreds of thousands of dollars based on lost taxes and predicted increase in services brought on by the development. The projected increases in population and traffic in the area increase the potential cost of service for those taxing entities, giving them a reason to seek more of the income.

However, legal mechanisms exist that can allow portions of the sales tax collected by Kansas City and Clay County to be redistributed as payments to the other taxing entities in an attempt to make up the disparity.

“What you often hear, people argue, ‘You aren’t getting anything off of it now so let’s redevelop it. At least we’ll get a new retail amenity out of it,’” Reik said. “And that’s fine. I get that, to a certain extent, but having a new retail amenity like that is going to accelerate residential growth in our district beyond what it already has been. That’ll be a draw.

“That requires us to provide more service, and the cost of education isn’t paid for by residential development. It’s paid for by residential and commercial balance.”

The project would be similar yet different to what Zona Rosa did for the Northland and the Park Hill School District in recent years.

However, Metro North Crossing would have flanked by similar existing shopping districts, and there is some worry that the increased retail space would lead to empty store fronts as tenants attempt to pick the best location. In addition, Zona Rosa’s TIF project helped fund miles of road, infrastructure and safety improvements to the surrounding area, while Metro North Crossing’s TIF would solely fund site specific improvements.

Zona Rosa was constructed on previously undeveloped land, while the site modifications at Metro North Crossing require more financing to complete.

“Obviously, the developer thinks this development has a place,” Reik said. “I have some concern that they could cannibalize businesses that are producing the increment necessary to pay for those projects that have happened already and then fund additional projects in the future.”

Negotiations on how the tax revenues would be dispersed have been ongoing, but Reik believed there was a good chance the proposal could receive approval at Wednesday’s meeting. Eleven members vote with five appointed by Kansas City mayor Sly James and two from Clay County, meaning that if the biggest players in the project favor the plan, it will pass.

If it does, the matter would then go before the City of Kansas City City Council before work could begin on the iconic mall.

Predicting how the revitalization plays out in the distant future remains a bigger challenge.

While the Park Hill district has benefited greatly from the property taxes since the completion of the Zona Rosa TIF, that doesn’t guarantee this project will do the same. The trends for shopping remain fickle.

“When it becomes fully assessed (for property taxes), we are going to get whatever it’s worth at that time. That’s not going to change,” Reik said. “What I feel like my job is is to maximize the benefit of this redevelopment project for the 23 years it will be in the TIF district.

“Can you remember Antioch Center 25 years ago?” Reik said. “These types of developments don’t stay en vogue for very long. Independence Center has kind of hung on, and Oak Park Mall has kind of hung on. I don’t know how viable those malls are moving forward.”