UG backs Lanier plan to replace Reardon Center with apartments, retail
17 Apr 2023
This article was originally shared by the Kansas City Business Journal.
By Nicole Dolan – Staff Writer, Kansas City Business Journal
Lanier United LLC initially wanted to replace the Reardon Center and an adjacent property to the east, at 510 and 520 Minnesota Ave., with a 15,016-square-foot center retaining the Reardon name; a six-story, mixed-use building with 94 apartments and 12,000 square feet of ground-floor commercial and fitness space; natural-turf multipurpose athletic fields; and a new surface lot at 600 State and 645 Nebraska avenues.
Lanier had until December 2020 to buy the site from the UG, but the sale never closed. After recently winning approval for an amended and restated development agreement from the Unified Government, Lanier now has 270 days to close on the property, or the development agreement will terminate.
Once the sale is complete, Lanier will have 60 days to begin construction and then 18 months to finish. If the developer misses that mark, ownership of the site will revert to the UG, according to documents filed with the UG.
The UG has agreed to convey title to the Reardon Center site to Lanier United. The UG will take a 50-year ground lease for the portion of the site needed for construction.
The ground lease will provide the UG access to the site for at least 10 events a year at 50% of standard rental fees. In exchange, the lease agreement will provide for a one-time contribution of $1 million from the Reardon Center maintenance fund to pay for hard construction costs.
Although the latest development agreement didn't disclose the potential amount of industrial revenue bonds, here's a breakdown of the $25 million project's other proposed public funding sources:
- $4.2 million in tax increment financing revenue from a district established in March 2020.
- $3.3 million from a community improvement district created in 2013.
- The UG will pitch in $2 million: $1 million from the Reardon Center maintenance fund and $1 million in transient guest tax generated in the CID to reimburse Lanier for demolition and site improvements.
What's new in this development agreement is the inclusion of $884,207 in pursuit costs for design, predevelopment and structure financing before the project stalled a year ago. Lanier has carried these costs and now wants the UG to allow him to recover them on a similar but more specific schedule than previously articulated in the development agreement.
Specifically, Lanier asks that the UG reimburse him for 37% of his pursuit costs ($325,000) after all of the conditions are satisfied and he closes on the Reardon Center site, an additional 37% ($325,000) after he gets four months into his construction and the remaining 26% ($234,207) after he gets eight months into construction. The reimbursements would come from existing CID proceeds the UG previously collected and is holding; they would be included in the CID cap amount.
Before construction begins, the UG must amend the established TIF district and plan, which will happen at a future meeting date.
Lanier could not be reached for comment.
Lanier's development will supplement other recent downtown revitalization efforts, including The Merc Co+Op at Fifth Street and Minnesota Avenue, across the street from the project site; the apartment/retail project at the former UMB Tower at 601 Minnesota Ave.; and The University of Kansas Health System's renovation of the vacant former Environmental Protection Agency's Region 7 headquarters into a behavioral and mental health center.