8801 Page Redevelopment

(Satellite Picture thanks to Google Maps)

At the last Overland City Council meeting (03/12/07) a public hearing was held to consider the redevelopment of 8801 Page, a section of unused (or at least "underutilized") land next to the QuikTrip near the Page and Highway 170 intersection. There was a also Council Workshop meeting covering this issue (03/19/07). So far there has been no official announcement as to when the next public hearing or meeting on this issue might take place.

The Developer is seeking a Tax Abatement from the City of Overland. If approved the Development Area would be subject only to Real Estate taxes on the unimproved land for 10 years and subject to only 50% of the total tax liability for the land and the improvements for the following 5 years. This would mean a significant savings to the property owner that could be passed along to future tenants, making the property more attractive for leasing.

I have no issue with development projects in Overland. Personally I welcome them, and I am glad to see Mr. Cozad and others take an interest in this property in particular. However, the proposal, as presented, is not "ready for prime time" in my opinion. That is not to say that we shouldn't move forward with this project in the future. We just do not have enough details to move forward with it at this time.

The Development Plan for 8801 Page, as presented does not include any specific detail of what will be built there. The closest it comes is on page 1 (2nd paragraph) where it says:

This plan is submitted to the Overland Redevelopment Corporation, a Missouri Redevelopment Corporation in good standing (the "353" corporation), to facilitate and incentivize the redevelopment for mixed commercial use of the Redevelopment Area which is currently vacant and underutilized. The redevelopment proposed by the 353 Corporation and its successors for the Redevelopment Area will additionally result in job creation and increased tax revenue, and will serve as a catalyst for future economic development efforts.

and Page 3, section B where it says:

This plan proposes the wholesale redevelopment of the Redevelopment Area including the completion of fill and finish grading of the entire site, installation of water service, sanitary and storm sewerage, installation of on-site parking and vehicular access, provision of landscaping and construction of new mixed use facilities consisting of retail, office and service commercial, supported by either multi-story hotel development or light industrial uses, based upon market demand and potential user interest for each such use (collectively the "Redevelopment Project").

Based on these descriptions, just about anything could be built there without risking the loss of the proposed Tax Abatement. On the up side, the property is approximately 15 feet below Page and needs a lot of work done before it is ready for development, so a Tax Abatement would seem reasonable here. On the down side, there seems to be no restriction on what the Developer can build there.

Normally, Cities give tax Abatements in an effort to convince a developer to bring something in that would benefit the City. Though this is entirely possible with this development, there are no guarantees. Of course any deal like this includes a certain amount of speculation and risk on the part of all parties. However, this deal is so open ended as to what might be built there we have no way of knowing how it would possibly impact the City.

At the Workshop meeting I asked Tom Cunningham (the Attorney representing the City on this project), what happens if hypothetically all of the developers best laid plans fall through and say a parking garage facility is built there (or something else of minimal value to the City). Mr. Cunningham responded by saying that the Agreement was "Self Policing". If the developer doesn't build they don't get the Abatement. That seemed like a reasonable answer at the time. However, after reviewing both the Development Agreement and the Development Plan the language is so open ended I am not entirely sure that there is anything the Developer could build there (other than some sort of Residential project) that would not fall into one of the definitions above. As a result, there seem to be few,if any, limitations on this Tax Abatement and few, if any, protections for the City.

Most Developers provide detailed plans to Cities when seeking tax abatements and the like. Development plans are typically highly detailed, include drawing and site plans. This proposal however has none of that. Though the developer did provide of folder to the Council that included drawings and the like, and does have those drawing and site plans on their web site for prospective tenants to review, they are not included in the Development Plan. If they are not in the Development Plan (or Agreement) they are not legally binding.

The Developer has explained the lack of detail by saying that they need the tax abatement now, as a selling point to bring in potential tenants. While I sympathize with the developers position, I am not convinced we need to sign off on a deal that is devoid of detail.

When people rent homes, they often sign a lease contingent on the property successfully completing the Occupancy permit inspection. In Real Estate, contracts with contingency arrangements are the norm. I would think that this developer could market the site to prospective tenants and sign leases contingent on the tax abatement proposal being approved. Then once he has a reasonable number of tenants lined up he could come before the City seeking the Tax Abatement. He would be negotiating from a much stronger position because he would have deals in place that depended on the Abatement. He would also be able to provide a much more detailed plans for the City to consider, as he would now have a better idea of what his prospective tenants seek as well.

At that point, I seriously doubt the Developer would have any issue receiving an abatement from the City. No one on the Council now, and none of the possible future Council members I have been able to talk to on this issue oppose the plan in general. However, several are leery of signing off on a deal when no hard details are provided. That is understandable. Think about it. If someone came to you and said they want to Rehab your house, but they are not sure exactly what they would work on. Maybe the bathroom, maybe the kitchen, maybe finish the basement. They won't commit to specifically what they are going to do but they assure you that whichever project they decide to complete, your property value will increase. Would you cut them a check and say go ahead?

I have no reason to believe that Mr. Cozad or anyone else involved in this deal intends to do wrong by Overland in any way. I would love to see this property developed, and I happen to like the look of the drawings that appear on Cozad Commercial Real Estate LTD.'s website promoting the site. I just can't see the City giving away its only bargaining chip on such an unknown. In my opinion, the City should ask the Developer to come back to them to revisit this proposal when he has more detailed plans available. Perhaps the Council could pass a Resolution stating that they are open to passing the Tax Abatement should the developer return with more detailed plans for them to consider. That might be a helpful sales tool for the Developer when negotiating with prospective tenants.

One other Issue I had with this arrangement was in the Development Agreement itself, page 4, section 11.:

Modifications to this Agreement. The Developer or any of the Developer's successors or assigns and any affected developer or sub-developer may make minor modifications to or departures from the Plan without the City's consent. Any modification that substantially departs from this Agreement or the Plan shall require prior approval by the Developer, the affected developers or sub-developers, and the City.

Looking into this provision I've found that it is customary in agreements like this. It is designed to streamline the process. For example, if the Development Plan calls for red striping on buildings and the Developer decides to go with blue instead that would be a "minor" change that the developer could make without seeking a vote of the City Council. That seems reasonable, and would be acceptable if there was any level of detail regarding this development in the Development Plan or the Development Agreement presented. With such a non-committal, open-ended plan I have to wonder, what would be considered a "minor" change? If a more typical, detailed development plan was presented to the City I probably wouldn't have an issue with this item. As it stands now, the lack of detail in the Plan and the Agreement calls the meaning of the word "minor" and this provision into question for me.

I believe this development has the potential to greatly benefit Overland. I just feel that the "plan" as it stands, is not ready for serious consideration. We are continuing to investigate various aspects of this proposal and will follow up and on any progress or new developments as they come up.

Ultimately there seems to be little reason to rush on this as the Development Agreement itself does not even require the Developer to have controlling ownership of all the land within the Development Area until December 31st, 2012 (Development Agreement, page 2, section 3.). I still welcome and support this Development Project and look forward to the time when the Development Plan is detailed enough to allow a successful vote of Overland City Council on this Tax Abatement (which will likely be be unanimous).

For your review here is the relevant documentation I've gathered on this project:

The Development Agreement:

Page 1
Page 2
Page 3
Page 4
Page 5

(The remaining two pages were simply signature pages. We did not post these pages because we didn't feel they were necessary. However, if you would like to see them please feel free to email me by clicking here and I will scan and email them to you)

The Development Plan:

Cover Page
Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Page 9

(additional pages were the exhibits, which included the Certificate of Incorporation for the Overland Redevelopment Corp., the legal definition of the Development Area and an extensive relocation plan for residents or businesses in the effected area (that is required by State statute to be included even though there is nothing needing relocation within the proposed Redevelopment Area). We did not post these pages because we didn't feel they were necessary. However, if you would like to see them please feel free to email me by clicking here and I will scan and email them to you).

Links to other information:

Overland Redevelopment Corporation Filings
Cozad Group Listing for 8801 Page
8801 Page Flyer from Cozad Group


If you know of any other information sources on this proposal feel free to let us know.