By Stephanie Edwards
Members of the Lee’s Summit City Council discussed approval of a plan proposed by M150 Echelon Land Development, LLC for the construction of a multifamily complex near M150. The proposed development is known as the Residences at Echelon. The preliminary development plan was approved for the project in an earlier council meeting.
The developer appeared before the council in December to set the amount of fixed PILOT payments but Assistant City Manager Mark Dunning explained that the public hearing was needed after the council directed the applicant and staff members to revise the proposal at the December meeting. “We looked at establishing fixed PILOT payments in lieu of tax amount for this program,” he said. The previous PILOT amount was set at $935 per door. The amount was revised to $1,051.
The new PILOT amounts were based on county assessments of multifamily projects. The county has increased assessments for all multifamily apartment complexes in the city. He said that he felt that the council should be advised of the changes at the previous council meeting. There was a 30 percent increase in county assessments between 2014 and 2015. The change in the PILOT amount reflects that jump, he explained.
Councilmember Moreno asked whether or not the city was aware of the jump in county assessments last summer, when similar projects were passed. PILOT amounts for two comparable projects, The Residences at New Longview and Summit Pointe Square had been set at $935 per door over the summer.
Moreno raised concern over the jump compared to the other recent projects and wondered whether or not the change would put the developer of the Echelon project at a disadvantage.
Dunning said that if the private sector businesses are not adjusting lease rates to reflect the changes in the county’s assessment at the end of the Chapter 100 term when the properties go on the tax rolls there could be an impact. He agreed that the Echelon project was being treated differently so that there would not be a big change between PILOT amounts and assessments.
Moreno said the change meant a half-million-dollar difference in project estimates for the developer. He said he felt the change could be made for future projects. “I feel like this totally blindsides the applicant,” Moreno said.
Councilmember Greg Faith asked Evan Fitz, an attorney with Polsinelli Law Firm representing the developer, if he was blindsided.
“It’s fair to say we were a little surprised,” he said. He was not aware of the change in the PILOT amount until about ten minutes before the December 15 meeting, he said.
Councilmember Diane Forte suggested splitting the difference between the $935 the developer had anticipated and the amount that we raised, $1,051. She suggested a new PILOT amount of $993.
Councilmember Binney said he had never been a part of a discussion to reduce the amount of PILOT taxes for a project. “I can’t be in support of this,” he said.
Moreno said he agreed with Binney’s point but felt that it was unfair to raise the amount for the developer right before they came into the meeting.
Forte added that she was not aware that the amount of $1,051 per unit actually reflected a reduction of $72 from what it could have been.
Moreno moved to amend the PILOT amount to $935 per unit. The amendment failed.
Another motion was made by Councilmember Faith to change the PILOT amount to $993, as suggested by Councilmember Forte. The motion passed 5-3.
Councilmember Binney revisited the issue during the Council Roundtable portion at the end of the meeting. “I think we broke our own incentive policy tonight,” he said. “I don’t know what the idea was of lowering the requested amount of the incentive but I think we did what our policy says we don’t do. We basically found a way to incentivize residential development.” Not only was a half million dollars given back to the developer, he said, but a bad precedent was set for the next developer that comes forward.