Indian Springs development proposal moves forward after sparks fly at meeting

A Unified Government committee moved the $25 million Indian Springs development proposal forward after a contentious meeting tonight at City Hall.

The “flex-tech” proposal from Axis Point Developers LLC, formed by the principals of Lane4 Property Group, is planned for about 26 acres of old Indian Springs shopping mall site. The property is about 100 acres at 47th and State Avenue, according to officials.

During the meeting Commissioner Ann Brandau Murguia walked out, stating that she would not vote for this or any other development project until her 3rd District fast-food project is brought up on the agenda for consideration. She said she had been trying to get her project to move forward here for a year and a half; it had received a federal grant.

Developers stated at the meeting they are hoping to jump-start the Indian Springs redevelopment with this “flex-tech” or light industrial and office use on the south part of the property. They stated there was little interest currently from large retailers in locating there. With a “flex-tech” project, they can bring hundreds of employees onto the property, which they hope generates retail, housing or office space interest in the north part of the Indian Springs property from other developers.

While Hunter Harris of Lane4 said there was a company interested in being a “flex-tech” tenant of the building, he did not name the company, saying it was confidential.

Committee members voted 4-1 in favor of the Indian Springs project moving forward to the full commission, and some of those voting in favor said they were just interested in bringing it to the full UG Commission on April 6 for a discussion with two commissioners whose districts were in that area. In their remarks, the commissioners who voted in favor of it did not express their full support for the project tonight. The motions included a phrase that they were moving it to the full commission on April 6 for more discussion. A public hearing and possibly a vote will be held on April 27.

Board of Public Utilities member David Alvey, who serves on the UG committee, voted against the project. Alvey, who is running for mayor, said that selling the site for $750,000 when the UG has already invested about $16 million in it is like handing it over for free. The proposed project also has a 75 percent tax abatement for about 10 years.

He also mentioned the UG agenda documents about the project getting some price breaks from the BPU.

“The numbers don’t work for the BPU,” Alvey said. He also pointed out that although the project seems to be meant as a stimulus for the north side of the Indian Springs property, there is no bridge in place, so they are making this move without any guarantee development is actually going to happen on the north side.

While he usually votes with the consensus of the UG committee, this time he can’t do it because he is expressing the BPU concerns about it, and also he is concerned about this deal, he said.

Marlon Goff, UG economic development director, stated that the UG would retain ownership of the rest of the Indian Springs property, while it would sell about one-fourth of it under this proposal.

Doug Spangler, a former state representative from Kansas City, Kansas, and a former Edwardsville city manager, asked the committee many questions about the project. Harris confirmed that if the total cost is $25 million, with a total square footage of 350,000 square feet, the cost per square foot is $71.

“So you’re going to build a flex-tech building for $71 a square foot, is that, in your experience as a developer, $71 a foot, is that Class A?” Spangler asked. “Those numbers seem to me that they don’t pay for concrete and square footage.”

Harris responded that it would be indicative of a Class A flex-tech park.

“You won’t come back to the Unified Government and say, we had cost overruns?” Spangler asked.

Harris responded they have been asked to explore if there were BPU tap fees associated with the former mall that the development group could maintain. Other than that, they don’t get to come back to the UG for cost overruns, he added. All the risk is borne by the developer of the project, and he has never come back on any other project with the UG, he said.

The BPU fees will not be structured into the UG’s development agreement, according to the administrator, and Spangler then said there could be more public assistance to the project from the BPU.

“I hate to see repetitively where development agreements are advanced toward a commission on a timeline that’s not fast-tracked, that’s supersonic,” Spangler said.

Spangler also questioned whether this commercial development was entitled to a 50 percent or 75 percent tax abatement.

He said he would love to have a developer go to 7th and Quindaro and develop that area.

“Indian Springs has been so badly mishandled by the administration, not the politicians, it is terrible,” he said. “We have over $16 million of public money, and under this proposal, your calculation only recovers $259,000 a year. That’s totally unacceptable. I would take it back to the drawing board, and I don’t think this process complies with law as it relates to the disposal of property.”

He said he believed the UG needed to receive permission from the Building Commission, an ordinance to make that transaction.

Commissioner Melissa Bynum pointed out that the committee in January had asked Lane4 to come back with a proposal, which they did tonight. She also stated that Alvey and others had raised pertinent questions.

UG Administrator Doug Bach said the UG had invested a lot of money in Indian Springs, the decision was made over a decade ago to demolish it, and it wasn’t anything that Lane4 asked for. The UG is trying to recoup those dollars and make it a viable project, he said. He said there has been some other interest from developers, and this project was ready to go and was brought forward by Lane4.

Bach said the “flex-tech” project, after 10 years, would turn back about $3 million to the local community. After that, the project would be paying about $450,000 to $500,000 a year in property tax, he said.

Bach said the trouble with the Argentine fast-food project not getting on the agenda was that it took an investment of dollars from the UG’s bank to put it into place, and until they had a deal, he hasn’t brought it back. They have been working on it, he said.

In answer to a question from Commissioner Gayle Townsend, Harris said there was a potential to lose the “flex-tech” tenant if there is a delay.

Under the timeline presented by the developer, the project would go before the UG Commission April 27 for approval, and building would take place over the summer, with the “flex-tech” building up and running by September.

This year’s UG mayoral and commission elections include a primary in August and a general election in November.

To see earlier stories about the Indian Springs project, visit https://wyandotteonline.com/ug-to-consider-25-million-bond-issue-for-indian-springs-development-at-tonights-meeting/

and https://wyandotteonline.com/ug-changes-direction-on-indian-springs-development/.