The City of Prairie Village Answers Common Questions About the TIF District and Proposed Project as of October 9, 2015

Facts about the proposed Meadowbrook TIF project

• The basic premise of TIF is to capture the incremental taxes generated by the planned redevelopment for a maximum of 20 years and to reinvest those incremental taxes into the project itself. Unlike other TIF projects, the additional taxes generated by the Meadowbrook project do not go directly to the developer. Instead, those TIF funds will be applied toward the park purchase and/or public amenities.
• The Meadowbrook redevelopment will include a mixed-use development, with senior housing, luxury apartments, maintenance-free townhomes, single-family homes and a boutique inn. More importantly, the redevelopment will preserve more than 80 acres of open space to be maintained as public parkland for generations to come.
• The SMSD currently receives approximately $60,000 per year from taxes generated by the Meadowbrook property and the District will continue receiving the same amount of funds throughout the course of the TIF period.
• At the conclusion of the TIF, projections estimate the SMSD will receive in excess of $1 million dollars per year once the TIF debt is paid. In this specific instance, the taxes generated by the development will be used to purchase the park and associated amenities.[est. based on the total SMSD mill levy rate of 35.911]
• The City of Prairie Village is committed to using any excess TIF funds to be applied towards the annual debt service in anticipation of paying off the bonds in a reduced time period.
• Projections indicate that incremental taxes generated by the development will pay for the park and amenities without increasing local residential/commercial property taxes.

How does TIF work? 
The basic premise of TIF is to capture the incremental taxes generated by the planned redevelopment for a maximum of 20 years and to reinvest those incremental taxes into the project itself.  In this specific instance, the taxes generated by the development will be used to purchase the park and associated amenities. 

Does TIF provide a tax break for homes and businesses within the TIF District? 
No. Taxpayers inside the Meadowbrook TIF will be taxed at the same rate as their Prairie Village neighbors directly adjacent to the TIF. As those taxes on new homes and new businesses within the TIF District are collected by Johnson County, they are segregated and returned to the City to pay TIF-eligible costs.

Is tax abatement the same as TIF? 
No. With tax abatement, the value of the property is reduced to $0 for the life of the abatement. With TIF, the value of the property in the year the TIF is created is frozen for the life of the TIF and property taxes on that base year value continue to be distributed to each taxing entity over the life of the TIF. The new taxes generated by the new development (which would not have happened without the TIF) are captured and made available to pay eligible TIF costs.

The basic premise of TIF is that it is self-funding: without the provision for TIF, the project would not be developed; without the development of the project, no new tax revenues would be generated. The TIF captures only the new taxes generated by the project.

How will taxes captured by the TIF be used?
Kansas law limits the use of TIF proceeds to land acquisition, site clearance and preparation and construction of public improvements. With the proposed redevelopment, TIF proceeds would be used to acquire the parkland, construct park improvements, construct public infrastructure to support the park (streets, stormwater management infrastructure, street lighting) and pay for the costs of issuing TIF bonds.

With this project, the TIF benefit will accrue to the public, rather than directly to the developer.

Would the project proceed without TIF? 
No. The current property owner of Meadowbrook has indicated that plans for the use of the Meadowbrook property would change significantly without the ability for the City to access TIF and that public parkland would not be part of their development plans.

Who pays for the TIF?
Every governmental entity that levies property taxes in Prairie Village will participate in the TIF by foregoing net new property taxes on the redevelopment over the life of the TIF. Together, the Prairie Village and Johnson County levies represent nearly half of the property tax captured by the TIF. The table below shows the relative share of the impact of the TIF capture, based upon 2014 levies as published by the Johnson County Records and Tax Administration Department.

SMSD........................... 36%
Johnson County^†............ 23%
City of Prairie Village....... 20%
Other Agencies.............. 21%

† includes the Johnson County Library and Johnson County Parks and Recreation District

What is the benefit to the public from the TIF? 
Unlike many TIF projects, the Meadowbrook TIF proceeds will be retained by the public sector for investment and preservation of over 80 acres of open space for Johnson County residents and for public infrastructure.  The TIF will permit the development of a unique mixed-use project in Prairie Village, generating an expanded tax base benefitting all taxing entities that levy taxes in Prairie Village. Private investment in the development is expected to exceed $100 million.

Can’t someone else buy the parkland? 
No. Neither Johnson County, the City of Prairie Village nor the Johnson County Parks and Recreation District have not budgeted funds for the acquisition of the parkland without the availability of the TIF.  More importantly, the current property owner has not offered the parkland for sale except in the context of a larger TIF redevelopment.

Will SMSD be harmed by the creation of the TIF?
No. SMSD, along with all other taxing entities, will continue to receive tax income on the 2015 value of the Meadowbrook property over the life of the TIF and will be “held-harmless” through the structure of the project.

SMSD, along with other taxing entities, is being asked to forego net new tax income for the duration of the TIF that does not exist now and that will not exist without the construction of the project. Once the TIF expires, each taxing entity will benefit fully from the taxes generated on the redevelopment.

What is the potential benefit to SMSD from the redevelopment? 
Based upon preliminary redevelopment plans, the City projects SMSD’s property tax income to increase nearly twenty-fold from current levels after the TIF expires.

According to Johnson County records, SMSD imposed seven separate property tax levies on its taxpayers for 2015:

† According to SMSD’s FY16 adopted budget, the District anticipates remitting $60.5 million to the State for the 20.000 mill uniform levy and receiving $176.9 million from the State in state aid. SMSD will continue to benefit from these taxes annually for the life of the TIF (assuming constant levy rates).

The table below reflects the City’s projection of (a) 2015 taxes generated by the Meadowbrook district and (b) the taxes generated by the proposed development in the year after the TIF is expected to be retired.

What organizations are involved in the proposed redevelopment? 
The planned redevelopment is a unique multi-party public-private partnership that balances the abilities and needs of each of the parties involved. The parties have executed a “memorandum of understanding” outlining their expected roles and responsibilities.

VanTrust Realty, LLC owns the Meadowbrook property and is willing to sell approximately two-thirds of the site to the City for use as parkland if the City agrees to create a TIF and approve a higher density mixed-use development on the remaining third of the property. The City will require VanTrust to purchase approximately $7.5 million in TIF bonds issued to support redevelopment of the project. VanTrust will build the private improvements (the mixed-use development at its cost), including development and maintenance of infrastructure within the private areas of the development. In exchange, VanTrust benefits from a unique development in a park setting, unlike any other development in Johnson County.

The City of Prairie Village has the authority under state law to create the TIF, to issue TIF bonds and to approve a rezoning of the property. The City anticipates purchasing the parkland from VanTrust and conveying it to the Johnson County Parks and Recreation District at no cost, but subject to covenants that the property be maintained as public parkland in perpetuity. The City will actively participate in the design of the park. The City will sell—and provide its ‘Aaa’ bond rating to—approximately $10.6 million in TIF bonds issued to support redevelopment of the project. The City will maintain streets and other related public infrastructure in perpetuity.

Johnson County has the authority to permit the Meadowbrook property to join the sewer district and will construct downstream sewer improvements to accommodate the mixed-use development and to alleviate other sewer problems in the area.

The Johnson County Parks and Recreation District will accept the transfer of the 80-plus acre park from the City and agrees to support the projected $400,000 annual maintenance costs of the park in perpetuity. The County is currently administering a public process at its cost to determine the potential uses of the park and will commit approximately $4 million from its 2016 capital budget for park improvements, including renovation of the current golf clubhouse for use as an Activity Center.

All taxing entities benefit from the “halo effect” of increased property valuation from being adjacent or near to public parkland. The Johnson County Parks and Recreation District commissioned a recent study that indicates that this halo effect could increase property values for adjacent homes by as much as 20%. Any such incremental tax valuation from the halo effect will not be captured by the TIF and will be immediately available to all taxing entities.

Has the City involved the public in its plans for Meadowbrook?
Yes, the City has hosted both informal open house-style community meetings, attended by more than 800 individuals and businesses, as well as formal public hearings on the creation of the TIF District and the potential redevelopment project. In addition, the Johnson County Parks and Recreation District has hosted open house-style community meetings to seek public input on the design of the proposed Meadowbrook Park.

The response of the public to the preliminary development plans has been overwhelmingly positive.

A number of additional approvals are required, each providing the opportunity for substantive public input. The Prairie Village City Council will consider rezoning of the property, the approval of a TIF Project Plan and a development agreement with VanTrust and the issuance of TIF bonds. The Johnson County Commission will consider an agreement with VanTrust permitting the Meadowbrook property to be included in the sewer district. The Johnson County Parks and Recreation District board will consider the design plan for the parkland and will be asked to accept the City’s transfer of the parkland subject to certain restrictions.

Who can I contact at the City should I have more questions?

City Administrator – Quinn Bennion  #913-385-4601  qbennion@pvkansas.com

Assistant City Administrator – Wes Jordan  #913-385-4621  wjordan@pvkansas.com