Archive for UG News

Legends 14 Theatres to change ownership and operator

Redeveloper to purchase theater; AMC Theatres to become operator

Legacy Development announced today that it plans to purchase the Legends 14 Theatre at the Legends Outlets in Kansas City, Kan., according to a news release.

A spokesman for the company said it will pave the way for redevelopment of the property under the direction of a new theater operator, AMC Theatres.

Currently, the theater is owned by the Unified Government. It has been managed by Phoenix Big Cinemas LLC since it opened in 2005.

In the news release, Wes Grammer, chief development officer for Legacy Development, said “We couldn’t be more excited. The Legends is a great project and we relish the opportunity to deepen our involvement in it.”

A spokesman said the transaction is expected to close on Dec. 11, 2015, and the building will reopen Dec. 12 under AMC management. AMC, which is based in Leawood, Kan., currently operates five locations in the Kansas City metro area, and will renovate the theater in 2016, while remaining open to guests during renovations.

“Our investment in the theater as the anchor attraction to the surrounding Legends shopping center is an example of our commitment to provide an important amenity to this community,” said UG Administrator Doug Bach in the news release. “The sale of the theater paves the way for private sector reinvestment in the 10-year-old facility and ensures that both residents and tourists will be able to enjoy this asset for years to come.”

Deal to sell Wyandotte Plaza advancing through UG

The sale of Wyandotte Plaza, a bond refinancing and subsequent changes to the redevelopment agreement are advancing through the Unified Government.

The UG’s Economic Development and Finance Standing Committee on Monday night heard some of the details of the refinance. The topic is expected to come back to the full UG Commission at a later date, perhaps Dec. 17.

According to UG information, Wyandotte Plaza, at 78th and State in Kansas City, Kan., is being sold to Phillips Edison, a real estate investment trust that owns more than 270 properties, including many shopping centers with grocery store anchors. Bellemore Homes Inc. is a former owner of the Wyandotte Plaza Shopping Center.

The developer, Legacy Development, has a contract to sell most of the shopping center to Phillips Edison, and the sale is hoped to close before Dec. 31, according to UG documents.

As part of the recent $28 million redevelopment effort, a new Price Chopper was constructed at the shopping center, and new tenants such as Marshalls, PetSmart, Krispy Kreme, CommunityAmerica Credit Union, Advanced Auto Parts and others were added.

Dave Claflin, representing Legacy Development, formerly Red Legacy, the developer for the Wyandotte Plaza redevelopment project, told the UG committee on Monday night that Phillips Edison has some very nice quality shopping centers in the Kansas City area, including Quivira Crossings at 135th and Quivira in Overland Park, and Falcon Valley at 101st Street in Lenexa.

“The way we became familiar with this whole project was through Phillips Edison,” Claflin said. “They originally had this project under contract in 2011.”

When they learned Price Chopper wanted not just renovations, but a new store, Phillips Edison contacted Red Legacy for redevelopment, he said.

“They assigned the contract to us in 2011, and we pulled it across the finish line, and we feel like it is a successful project today,” Claflin said.

Lew Levin, UG chief financial officer, said in July 2012, the UG financed $8.1 million in initial financing to support land acquisition for the Wyandotte Plaza project.

The goal of the project initially was to provide bond backing, but the UG wanted to proceed with refinancing of the project after three years, once the project was completed, he said. The project now is essentially completed, for the most part, although there may be an additional pad development, he said.

After the refinancing, he said the UG will not be providing bond backing, which the UG staff regards as positive for the local government.

The project then will be supported by three revenue sources: incremental sales tax revenues, property tax rebates associated with the Neighborhood Revitalization Act program, and a 1 percent community improvement district, he said.

Todd LaSala, attorney, said the original development agreement has a 1 percent CID sales tax on it, raising sales taxes at Wyandotte Plaza by 1 percent. The UG allowed the developer to pledge that 1 percent CID to its lender as collateral, LaSala said.

At the time the property sells to a developer, that lender will be paid in full and at that point, the 1 percent CID could be pledged to the bonds that will be used to do the UG refinancing, LaSala said.

LaSala said the developer requested some other conditions Dec. 7. Among those other conditions are that the refinancing take place on or before April 1, 2016, and LaSala said the UG would prefer it to take place in February.

The second condition requested is that if there are excess revenues available from the refinancing, the developer would like access to a portion of them, LaSala said.

“We haven’t discussed that yet; we haven’t agreed to that yet,” he added.

He asked if he could negotiate with the developer about the conditions and come back to the full commission meeting having agreed to those conditions.

According to UG officials, as part of the original agreement, the developer was allowed to come back and claim excess revenues. The excess revenues could be available at closing, LaSala said.

Levin said in the original redevelopment agreement, the public funding part of the total project cost was about 50 percent, and the developer had the ability to capture slightly under $13 million in total revenues if that is available. Today, the UG has funded the developer $7 million, and the developers are looking to capture an amount based on the refinancing to that project cap, he said. The current projection is that the developer could receive about $5 million of that remaining amount, he said, but that has been contemplated since the start of the development agreement.

While the number is about $5 million now, a month from now it could turn out to be $4.8 million, Levin said. Currently the developer wants a guarantee that they would get that $5 million, and the UG isn’t ready to say with absolute certainty that they would be able to receive that $5 million, he added.

LaSala said, in answer to a question from Commissioner Gayle Townsend, that the buyer, Phillips Edison, would take on all the obligations about owning, operating and maintaining the shopping center. However, the financing commitments, bonds, repayment of money advanced, and the financial deal would remain with Legacy, not transferring to the new buyer, he said. The UG backing would go away with the refinancing, he added.

Commissioner Brian McKiernan asked if there was any risk to the UG from this refinancing. Levin said it was the UG’s intention all along to remove itself from the backing of the project.

“Our risk is if we don’t proceed, we’re responsible for that debt,” Levin said. “We do not have access to the CID revenues, and we’ll have to back the project by other revenue sources, other than the incremental property and sales tax revenues” (if the refinancing doesn’t take place).

Most of Wyandotte Plaza is in this amended redevelopment agreement. A separate sale and transfer for Advanced Auto Parts was approved in September of 2015. Also separate from the main shopping center agreement is Krispy Kreme Doughnuts, which is proposed to be sold to LAG Investments Kansas City.

UG Commissioner Ann Murguia said she was concerned that because the proposed changes to the redevelopment agreement were not released until Monday, the commissioners didn’t have a chance to read them before tonight’s meeting. While she said she knows and trusts the UG staff and attorney, she added this information needs to be released before the day of the vote for reasons of openness and transparency.

$865,000 Cricket Wireless amphitheater upgrade approved

An expansion at Cricket Wireless amphitheater was approved, without any discussion, during the Aug. 27 Unified Government Commission meeting.

Repairs and upgrades totaling $865,000 at Cricket Wireless Amphitheater in Bonner Springs are planned. The amphitheater is owned by Wyandotte County. Approved at the Aug. 27 meeting was a $750,000 bond issue plus a $115,000 payment.

The UG and Bonner Springs are to provide the additional $115,000 in cash to begin the project, according to UG documents. Bonner Springs had to approve this project, also.

The facility is in need of major capital improvements to address safety issues and improve the appearance of the grounds and buildings, according to UG documents.

Although the UG Public Building Commission, which could be used to issue the bonds, was scheduled to meet on Aug. 27, that meeting was canceled. The Public Building Commission now will meet at 11 a.m. Monday, Aug. 31, in the ninth floor conference room at City Hall, 701 N. 7th, Kansas City, Kan.

At an Aug. 10 UG Standing Committee meeting, Chris Fritz, manager of New West Presentations, the operator of the amphitheater since 2008, said that the last big renovations there were in 1991, when about $3 million was spent. The amphitheater has been operating since 1984 near 130th and State Avenue and was formerly known as Sandstone Amphitheater.

Fritz described business as good until the economy experienced problems in 2008, and touring declined nationally. After a difficult year in 2012, New West changed the structure at the amphitheater from one exclusive promoter. Now it has opened concerts to different promoters, he said. In 2013, the amphitheater held 14 events, and in 2014, it held 18, he said.

This year there are about 35 events scheduled for the amphitheater, including 11 concerts, 10 community events and 14 other rentals, Fritz said. A balloon race is scheduled there in late October.

“We’re building and really confident our numbers are going to go up,” he said at the committee meeting.

Last year the amphitheater saw under 50,000 paid tickets, and this year it will be close to 75,000, he added. The ultimate goal will be 120,000 paid tickets, he said.

Joe Connor, UG assistant administrator, said at the Aug. 10 meeting that the UG financing would be based on the operator’s ability to repay the debt.

He said the concrete infrastructure needs to be replaced and fixed, for basic safety needs. Parking and walking surfaces are inadequate, he said.

The plan is to repair and freshen up the buildings, including concessions stand and restrooms, and make them look better, he added.

There also are some new seats planned, he said. The resolution also lists improvements to the stage area, irrigation, a backstage pavilion, fencing and gate improvements, plumbing, lighting, insulation for the stage, and other necessary improvements.

The $750,000 bond financing was planned for a 10-year period, he said.

New West pays an annual fee to the UG, according to UG officials. The user fee paid to the UG was proposed to be $50,000, reduced from the current $90,000, Connor said. Bonner Springs would accept less for the ticket fee, at $15,000. Currently it receives an average of $23,000.

New West would make an annual bond and interest payment of $92,500 per year, so that means its total annual payments would be $157,500 when the fees to the UG and Bonner Springs are included, according to UG documents.

The New West payments were based on revenue from 52,500 tickets sold at $3 per ticket, according to officials. After a 52,500 minimum number of tickets is reached, New West would pay an additional 75 cents per ticket to the UG and 25 cents to Bonner Springs, according to UG documents.

According to Bonner Springs city documents, New West pays sales tax, liquor tax and a 50-cent per ticket amusement tax to the city from the amphitheater. Over the last five years, this revenue has totaled $465,430. But in 2012, according to Bonner Springs documents, this amusement tax was not paid to the city and it is being paid back in smaller amounts over a 36-month period ending in May 2016. Bonner Springs is still expecting these funds to be paid back, according to Bonner Springs documents.

Riverview-Turner Diagonal area light industrial park project

A resident brought up concerns about traffic, stormwater runoff, envioronmental impact, and effect on taxes to the nearby resident’s property in regards to a NorthPoint development at 6925 Riverview Ave. Project developers said they had plans that would take care of traffic, stormwater runoff and environmental effect.

The project is a light industrial park in the Turner Diagonal area. A change of zoning to light industrial and industrial park district was approved. The commission added a stipulation that NorthPoint would replace pipes along Speaker Road, as the developer promised at the meeting.

Bodyguard issue

The Wyandotte Daily News is unable to report if there are any changes to the UG bodyguard and personal security officers program for the mayor and other public officials, whether the $250,000 expenditure was changed, whether the commission decided to go with a less expensive private security firm for bodyguards, or a less expensive plan, as suggested at the July 20 budget meeting, because that meeting on Aug. 27 was closed to the public.