JoCo city questions if New York developer has money to finally finish Mission Gateway

Rich Sugg/

As Mission City Council members have been asked yet again to consider expanded tax incentives for the long-delayed Mission Gateway project, the city’s top financial advisor on the matter says he does not yet have confidence to move forward until the developer proves enough financing has been secured.

During a special City Council meeting Wednesday night, elected officials reviewed the latest version of an incentive package proposed by New York-based developer The Cameron Group that would allow businesses there to collect an additional 2-cent sales tax and offer property tax breaks for 20 years. It is the fifth iteration of a plan still being forged after 16 years of false starts and broken promises.

The Cameron Group is relying in part on loans from two banks to pay for construction on the first leg of the estimated $268 million project. But Bruce Kimmel, the city advisor, said the full details of how those bank loans will be underwritten and what those loan amounts will be remain to be seen. Other financial considerations include a projected shortfall on a city bond issue, increased lending costs and months-old documents outlining the terms of private investment.

Though the banks have offered assurances that everything will be put in order, Kimmel advised the council to hold off on approving any incentives for the time being, saying a much clearer picture of the project’s financial readiness should come into focus by mid-October.

“I don’t think there’s anything that has fallen out of bed, so I don’t want to sound overly negative. I also can’t say that everything is ready to go,” said Kimmel, adding that he wished to provide a candid outlook on the financial state of the project.

‘Pretty thin deal’

For 16 years, the Mission Gateway project, located at Shawnee Mission Parkway, Johnson Drive and Roe Avenue has sat incomplete — an outcome elected officials, Johnson County residents and project investors agree is an undesirable one. Instead of a commercial and residential complex complete with retail shopping and an entertainment center, the site is a partially built parking garage next to an array of concrete pillars, surrounded by banners that promise a good thing to come.

Currently planned for the 17-acre site, once home to the Mission Center Mall, is a project proposed to be rolled out over two phases. First would be the construction of retail shopping, restaurants, a parking garage and an entertainment space, plus about 370 apartments. Second would be 100,000 square feet for offices or a medical center and a 200-room hotel.

Frustrations and distrust over the ill-fated project have led the city to propose strings aimed toward making Mission Gateway a success. As a condition of entering another redevelopment partnership agreement, Mission leaders want The Cameron Group to put up $3 million cash in escrow that would go to the city coffers if the first phase of construction is a bust.

Representing The Cameron Group during Wednesday’s meeting was Matt Valenti. He reiterated the position that Mission Gateway cannot be finished without the offering of tax-increment financing and a higher sales tax collection, set to the maximum allowable under Kansas law, through the community improvement district. The first phase of the project is expected to cost roughly $168 million, with between $18 million and $22 million expected to come from special general obligation bonds issued by the city.

On the financing front, Valenti acknowledged that Mission Gateway is a “pretty thin deal.” He also said the New York real estate development firm already has more incentive than anyone to see it fully built, saying they “won’t make a dime” otherwise.

A series of delays

Developers, who have reported $68 million in sunk costs so far, have blamed the years of delays on a series of misfortunes, including the instability of financial markets during the Great Recession and the COVID-19 pandemic. Unpopular ideas, including the inclusion of a Walmart Superstore to anchor the site, were met with disagreement that further kept the project in limbo.

To the excitement of many, buildings there began to take root in 2020 as cranes and construction crews arrived on the spot that had been dubbed by some as the “Mission Mudhole.” But it halted again that year with the onset of the COVID-19 pandemic.

More issues arose as the project became entangled in a lawsuit brought by contractors who claimed they had not been paid for work performed. At least a dozen liens were filed against the developer. And in 2021, the developer was also found to be in default after hundreds of thousands of property taxes had not been paid.

Nine months ago, the developer failed to meet a Dec. 31, 2021 deadline to complete construction. It cast the city and developer back to the drawing board again.

Long-held frustrations

Residents have long expressed frustrations over what many consider an eyesore that may not deserve any sort of financial backing from the city. They addressed those again during the public comments section of Wednesday night’s meeting, where only a few took the podium.

One was Andrew Blake, a 30-year-old Mission resident who recalled being excited about the prospect of Mission Gateway when he was still in high school. He said he and many others now lack faith in the city or the developer to get it done.

“I look forward here in a few years to us coming back and doing this exact same thing (for the sixth time),” Blake said sarcastically. “We’ll see what happens.”

Council members took no action on the tax incentive proposals Wednesday night — other than to extend a public comment period to be held on Nov. 21. City officials may consider the proposals again at that time, when a draft of a final redevelopment agreement is expected to be finished.

Speaking to concerns raised by residents, and others shared on the council, Mayor Sollie Flora said the delayed action on the project would extend opportunity for additional community input as city leaders weigh next steps.

“We’re working through the process to make sure we reach a decision that is fair, and that is well considered,” Flora said.

The Star’s Sarah Ritter contributed to this report.