COMMITTEE SUBSTITUTE
FOR ORDINANCE NO. 180676
Authorizing and directing the City Manager to
execute a Master Financing Agreement to cause the redevelopment of the property
generally located in the vicinity of 3600 Broadway and referred to as the Broadway
Valentine Shopping Center.
WHEREAS, on December 23, 1996, by adoption of Committee
Substitute for Resolution No. 961542, the City of Kansas City, Missouri (the
“City”) established an urban renewal plan for the purpose of removing blight
from the historic Uptown Theatre located at the southwest corner of Valentine
and Broadway in Kansas City, Missouri (the “Uptown Theatre”) and the
surrounding area, including property generally located in the vicinity of 3600
Broadway and referred to as the Broadway Valentine Shopping Center (the
“Shopping Center Property”); and
WHEREAS, the Shopping Center Property is located in a
continuously distressed area with significant blight; and
WHEREAS, the Land Clearance for Redevelopment Authority of
Kansas City, Missouri (the “LCRA”) is the fee simple owner of the Shopping
Center Property; and
WHEREAS, UGA, L.L.C (“UGA”) is the fee simple owner of the
Uptown Theatre; and
WHEREAS, UGA currently leases the Shopping Center Property
from the LCRA pursuant to that certain Master Lease, dated April 1, 1998 (the
“Master Lease”) and uses the Shopping Center Property for parking for the
Uptown Theatre; and
WHEREAS, the City, UGA and LCRA desire that the Shopping
Center Property be redeveloped while maintaining parking for the Uptown Theatre
at the Shopping Center Property; and
WHEREAS, Uptown Development, LLC (the “Developer”) has
proposed, subject to the availability of certain public incentives, to
redevelop the Shopping Center Property with a mixed-use development project
(the “Project”) in two phases to include retail/commercial, multi-family
residential, and surface and structured parking (the “Parking”) as phase one
(“Phase I’), with an option for a hotel as phase two (“Phase II”); and
WHEREAS, the Parking is in a strategic area in Midtown
Kansas City which, in addition to providing parking for the Project, will
provide key parking for the Uptown Theatre and, if available, parking will be
offered for lease to other surrounding commercial, residential, entertainment and
retail properties; and
WHEREAS, on October 27, 2016, by adoption of Ordinance No.
160806, the City established the Uptown Community Improvement District (the
“Uptown CID”), which includes the Uptown Theatre and the Shopping Center
Property and which imposes a one percent sales tax to assist in various
purposes of the Uptown CID, including the removal of blight from Shopping
Center Property; and
WHEREAS, UGA has an option under the Master Lease to
purchase the Shopping Center Property from the LCRA; and
WHEREAS, there are certain disagreements amongst the City,
LCRA and UGA related to the Master Lease, including the amount of the purchase
option under the Master Lease, and various parties desire to enter into a
Master Financing Agreement (the “MFA”) to resolve such disagreements and to
cause the redevelopment of the Shopping Center Property with the proposed
Project; and
WHEREAS, the Project serves a primary public purpose in
that it will redevelop blighted property in a continually distressed area, preserve
much needed parking for the Uptown Theatre, promote attainable housing in
Midtown, provide places to dine, shop, play and stay in Midtown, create job
growth, create new tax revenues, and encourage additional investment and
development, all of which are essential components of the City’s economic
stability and growth; and
WHEREAS, the Project would not be developed but for the
incentives contemplated in the MFA and set forth below; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:
Section 1. That the City Manager is hereby authorized and
directed to execute the MFA for the purposes of establishing the general
framework for the transactions, construction and financing of the Project. The
MFA is approved in substantial form as attached hereto, subject to such
revisions as the City Manager shall determine to be appropriate for the
purposes contemplated herein.
Section 2. That the City supports
public incentives for the Project (collectively, the “Incentives”) as follows:
(a) Sales Tax Exemption on Construction Materials (“STECM”); (b) twenty five
(25) years (plus the construction period) of real property tax exemption or
abatement at 100% for 10 years (plus the construction period) and 50% for the
next 15 years; (c) the remaining existing revenues from the Uptown CID (the
“Uptown CID Funds”) will be assigned to the Developer pursuant to a
reimbursement agreement between the Developer and the Uptown CID, to reimburse
the Developer’s redevelopment project costs which are eligible costs of the Uptown
CID; (d) reimbursement of the redevelopment project costs for a period of
twenty (20) years pursuant to a sales tax reimbursement agreement between the
City and the Developer from fifty percent (50%) of revenues generated by the
one percent (1%) capital improvements sales tax and two percent (2%)
food/beverage tax generated within the boundaries of the Shopping Center
Property, and (e) subject to subject to further AdvanceKC review upon the
request of the Developer for Phase II showing an additional need then
forty-five percent (45%) of revenues generated by the seven and a half percent
(7.5%) hotel/motel tax generated within the boundaries of the Property provided
that the Phase II ADR is not less than 120% above the average ADR of hotels in
the City’s downtown market as described in the MFA.
Section 3. That the Project is
located in a severely distressed census tract that has continuously maintained
such status for not less than ten (10) years immediately prior to the request
for Incentive and meets the “Extraordinary Qualifications” definition set forth
in Second Committee Substitute for Ordinance No. 160383, As Amended.
Section 4. That the City will
cooperate with the Developer in the Developer’s efforts to implement the
Project and to effectuate the Incentives through the LCRA and/or the Planned
Industrial Expansion Authority of Kansas City, Missouri (the “PIEA”). By
adoption of this Ordinance, the City encourages the LCRA and the PIEA and any
other appropriate and/or necessary agencies to work with and support the
Developer in order for the Developer to move forward with the Incentives and
implement the Project.
Section 5. That the City’s support
for the Project is subject to the execution and recording of the parking
easement agreement (the “Parking Easement”) to benefit the Uptown Theatre
described in and attached to the MFA, which Parking Easement shall grant the
Uptown Theatre a non-exclusive easement for the passage and parking of not less
than 380 passenger vehicles on the Shopping Center Property at all times,
except for overnight parking uses for 99 years from the date of execution but
only so long as there is no substantial change in the use of the Uptown Theatre
property as described in the Parking Easement; provided further that during any
temporary period of time, when construction, reconstruction, repair or
maintenance is ongoing at the Shopping Center Property, the owners of the
Uptown Theatre and the Shopping Center Property shall cooperate with each other
in good faith to insure proper availability of not less than 150 parking spaces
on the Shopping Center Property or the vicinity.
Section 6. That the expenditure of the Uptown CID’s
revenues to fund the improvements contemplated by the MFA are reasonably
anticipated to remediate the blighting conditions and will serve a public
purpose.
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Approved as to form and
legality:
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Brian T. Rabineau
Assistant City Attorney