The Redevelopment of
Independence, Missouri June 5, 2023
Presentation Agenda
Introductions Tri-Land Background
HUB – Project Vision Financial Overview Project Benefits
3
Who is Tri-Land?
44 years in Business Based in Chicago
Tri-Land currently employs 25 people Privately held Completed Over 50 Shopping Center Renovations in Eight States - Representing 8,600,000 Square Feet of Redeveloped Shopping Centers - With a Total investment of $670,000,000 Full-service Company: - Acquisitions - Leasing - Construction - Capital Markets
- Finance - Property Management - Accounting - Human Resources
4
What does Tri-Land do?
Tri-Land’s core business is to transform underutilized and underperforming retail centers into vibrant shopping environments. 90% of Tri-Land projects are supermarket anchored.
5
Tri-Land’s Kansas City Redevelopments Cherokee South
SWC 95th and Antioch Overland Park, KS
Ten Quivira
NWC Shawnee Mission and Quivira Shawnee, KS
Devonshire
127th and Mur-Len Rd Olathe, KS
Blue Springs
NEC Highway 7 and Highway 40 KC, MO
6
Cherokee South – Overland Park, KS Before
After
7
10 Quivira Plaza – Shawnee, KS Before
After
8
The Hub Shopping Center “ As Is” Information
Year Built / Remodeled
Price Chopper – (1972 Woolco/Walmart) / 1996 Small Shops - 1972 Firestone - 1990 Burger King – 1990
Building Size
161,423 SF
Total Site Area
15.92 acres
Occupancy
92%
Tenants
11 tenants, 2 vacant spaces, effective 3/1/22
Buildings
3 9
The Hub Shopping Center Existing Site Plan
10
The Hub Shopping Center - Existing 9/20/2022
11
Future of The Hub
12
The Hub Shopping Center – Redevelopment Plan
•
Building Façade Renovations and new, more visible tenant signage
•
Replace roofs, parking lots, sidewalks
•
Organize traffic flow and reconfigure the parking lot to include new curbed islands
•
Add new high-impact landscaped areas
•
Add new shopping center identification signage
•
Add four new outlot buildings (two facing Hub Drive and two more fronting 23rd St)
•
Downsize the existing Price Chopper store and create a new 17,000 SF tenant space
•
Add new high-intensity LED site lights and building lights
13
3 8
38
11
307
22
60
55
49
38
37
11
The Hub Shopping Center Redevelopment Site Plan
8
16
14
Price Chopper – Building Reduction
15
The Hub Shopping Center – Proposed Redevelopment
16
Price Chopper – Proposed Redevelopment
17
Price Chopper – Proposed Redevelopment
18
The Hub Shopping Center – Proposed Redevelopment
19
The Hub Shopping Center – Proposed Redevelopment
20
The Hub Shopping Center – Repositioning Statement
The renovation of The Hub will: • • • • • •
Improve the appearance of the shopping center Create a more appealing environment for its existing customers and tenants Attract new customers and tenants Provide additional businesses at which to shop, eat and work. New businesses will generate increased sales and sales tax revenue. The new buildings will increase the real estate tax revenue to the City, setting a new benchmark for other development projects and acting as a catalyst for future investments in other local properties.
21
Hub Shopping Center Redevelopment By The Numbers 22
The Hub Shopping Center – TIF
Why is TIF Needed to Make the Project Possible?
23
Financing of the Project • Delivering the project requires an estimated investment of $36 million • The project’s estimated return without incentives is 0.53%, resulting in a gap to financial feasibility
• Tools needed to fill the “Gap” •
• • • •
Tax Increment Financing (TIF) • 50% of Payments in Lieu of Taxes (PILOTS) • 50% of Economic Activity Taxes (EATS) CID & TDD Sales Tax CID Special Assessment City Fee Waivers Chapter 100 Sales Tax Exemption on construction materials
• Using these tools, the estimated rate of return is 10.20% with incentives 24
Sources of Funding ▪ Total Investment in the Development = $36 million
TIF PILOTS & EATS $2.6MM 7%
▪ Approximately 7% of the project budget funded by redirected taxes. ▪ Approximately 93% of the project budget funded by addons and private investment.
PRIVATE INVESTMENT & CID/TDD $33.4MM 93%
25
Sources of Funding
7% 26%
67%
$2.65 million
TIF
$4.17 million
CID Sales Tax (EATS/Non-EATS)
$0.73 million
CID Special Assessment
$4.45 million
TDD Sales Tax (EATS/Non-EATS)
$24.08 million
Private Investment
$36.08 million
Total
26
Benefit to Taxing Jurisdictions Total taxes available to taxing districts during TIF term Taxing District
Benefit with Redevelopment*
City
$
24,591,839
Benefit without Redevelopment* $
19,463,291
Net Benefit of Project* $
5,128,549
County
13,008,644
9,465,109
3,543,535
State
47,046,987
30,905,344
16,141,643
Mid-Continent Library
268,798
169,417
99,380
Jackson County Mental Health
82,215
52,006
30,209
Jackson County Board of Disabled Services
78,295
37,695
40,600
Metropolitan Junior College
185,281
112,597
72,684
School District – Independence School #30
3,756,162
2,435,595
1,320,567
Kansas City Zoological District
1,151,147
913,893
237,253
All Taxing Districts
$
26,614,420
* Benefits over a 23 year period 27
Benefit to Taxing Jurisdictions Annual taxes available to taxing districts after TIF term Taxing District City
$
New Annual Benefit After TIF 634,633
County
$
314,426
State
$
995,307
Mid-Continent Library
$
10,516
Jackson County Mental Health
$
3,228
Jackson County Board of Disabled Services
$
2,340
Metropolitan Junior College
$
6,989
School District – Independence School #30
$
151,175
Kansas City Zoological District
$
29,418
All Taxing Districts
$
2,148,031
28
City Benefits Over $36MM in Total Investment
Only 7% funded by TIF
$180,000 in New Annual Tax Revenues
$1MM toward 23rd Street Corridor Project
Redevelopment and Revitalization of a key shopping center and grocer of the community for decades to come
$5.1MM in Direct City Tax Revenue Benefit Over 23 Years
Creates over 150 Construction Jobs Creates and Retains Permanent Jobs
$800,000 in Retained Annual Tax Revenues for the City
$600,000 in New Annual Tax Revenues for the City of Independence after the TIF Term
29
Benefits •
Allows development of a blighted property that may otherwise continue to decline
•
Over $36,000,000 in Total Investment
•
Over $380,000 in new annual tax revenues for local taxing districts
•
Over $180,000 in new annual tax revenues for the City of Independence
•
Over $10 million in total new tax revenue over 23 years for local taxing districts
•
Over 150 construction jobs
•
Retains existing jobs and produces opportunities for additional jobs
•
Preserves and revitalizes an important grocer for the community
•
Seizes on the critical and urgent need for redevelopment of the shopping center
•
Results in $1 million of funding for the City of Independence toward the 23rd St. Corridor Project!
30
The Hub Shopping Center – Advantages of the Proposed Plan
• Does not call for the City or any Taxing Jurisdiction to be responsible for any payment of debt service for the financing! • Does not create any payment risk of any kind to the City or any Taxing Jurisdiction! • Does not require the City or any Taxing Jurisdiction to guarantee any revenues!
• Does not call for the City to issue any bonds (bonds would instead be issued by the industrial development authority or another issuer)! • Aligns with the Economic Development Policy of the City!
31
The Hub Shopping Center – Advantages of the Proposed Plan
• Maintains current levels of tax revenues to the City and all Taxing Jurisdictions and ensures the City and all Taxing Jurisdictions enjoy a share of the increased tax revenues by providing for 50% of the increase in sales taxes and property taxes to flow to the taxing jurisdictions during the term of the TIF! • Relies on TIF Revenue to fund less than 8% of the costs of the redevelopment, far below the 15% - 20% maximum established in the Economic Development Policy! • Has been subject to independent review by advisors hired by the City of Independence to verify the need for the requested support from the City!
• Facilitates the redevelopment of the Hub Shopping Center in a fashion that assures its long-term viability and creates a community anchor in this portion of the City of Independence! 32
Request
• We respectfully request the City Council’s support of the Redevelopment including the actions before you tonight.
33
Thank You We Welcome Your Questions & Comments
34
Supplemental Slides Only
35
36
The Hub Shopping Center – Three Scenarios Explored
Scenario 1 Statutory TIF (100% PILOTS / 50% EATS) + TDD; CID; Sales Tax Exemption
Scenario 2 Tax Abatement; Sales Tax Rebate + TDD; CID; Sales Tax Exemption
Scenario 3 (proposed financing plan) Revised TIF (50% PILOTS / 50% EATS) + TDD; CID; Sales Tax Exemption Note: Detailed analysis of each scenario is available 37
The Hub Shopping Center – Scenario 1
Scenario 1 Statutory TIF (100% PILOTS / 50% EATS); TDD; CID; Sales Tax Exemption Advantages • Gap Solved • Incentive Capacity Generated Could Be Spent Issue • 100% PILOTS request is in excess of City policy
38
The Hub Shopping Center – Scenario 2
Scenario 2 Tax Abatement; Sales Tax Rebate; TDD; CID; Sales Tax Exemption Advantages • Eliminates TIF Request • Uses Other Incentive Tools Issues • Gap remains unsolved by $3.6MM • Without TIF, there are insufficient eligible costs to spend all of the incentive dollars generated 39
The Hub Shopping Center - Scenario 3
Proposed financing plan Scenario 3 Revised TIF (50% PILOTS / 50% EATS); TDD; CID; Sales Tax Exemption Advantages • Gap Solved • Incentive Capacity Generated Could Be Spent • Request Inline with City Policy Issue • Justify Need for TIF 40