The New Grain Valley Marketplace - Slight of Hand

The new Grain Valley Marketplace – 50,000 square feet of retail space for lease

Slight of Hand - now you see it on paper, now you don't ever see it built

S.G. Property Management is looking for tenants for this new retail space at Interstate 70's interchange with Main St. (Buckner-Tarsney Rd.).

In the entire region of Eastern Jackson County in 2008, 554,498 square feet of new retail space was built (Eastern Jackson County by the Numbers 2010).

S.G. Property Management's figure is slightly less than one tenth the size of what was built in Eastern Jackson County during the real estate bubble year 2008.

What is going on?

Developers sketch out on paper configurations of retail strips and pads that someone could fit into area of land.  The Mayor is impressed.  The Aldermen are impressed.  But unless there are likely tenants and financing is available, what appears on paper will never be built.  Never.
The financing won't materialize until real tenants are lined up.  I should only live so long to see tenants for 50,000 square feet who are intending to do business in Grain Valley near the interchange.

Serious development starts out with a fifteen-year pro-forma calculation of income and expenses.  The initial income is not what you or I would call income.  It is what banks will realistically loan for the project, what investors will sink into the project, plus the proceeds from municipal bonds and tax credits for the development.  In the early years, the expenses are for purchasing land and construction and for beginning to pay interest to the banks for their loans and to pay dividends to the holders of the bonds.

In this pro-forma spread sheet, income must always equal or exceed expenses for these first fifteen years.  Otherwise, the project will never receive any bank loans.  Foolish investors may pony up money to invest in the project.  Silly public servants may issue municipal bonds.

Financed by these last two sources, bulldozers will appear and concrete might be poured.  And then construction slows and finally stops.  Taxpayers are left with the liability for paying back the bonds.  Some investors go bankrupt or, if they are luckier, write off the losses.

Along Roe Ave. in Leawood, KS, I watched a sign for retail leasing go up in 2008, and I saw bulldozers stirring up dust.  The city built a road extension that was in their master plan anyway.  Then the sign came down.  The land was leveled and planted with grass.  As I write, the land is kept mowed – economically dormant for who knows how long.  This development was planned for a stretch of Roe Ave. about one mile north of the huge Leawood Town Center Plaza and the Hawthorne Plaza Shopping Center.

Speculation, speculation, speculation.  Bust, bust, bust.

Consider that the land for Sni-A-Bar Community north of Sni-A-Bar Blvd. has yet to be improved, not to mention built.  This is 20 acres with a proposed residential plan which was supposed to be part of the Sni-A-Bar Community. 

Also, the Ryan Meadows development is less than half built-out.

For the next few years, though, the number of new residential households in Grain Valley is forecast to grow only about 1.4% per year.  See Grain Valley Vital Statistics - 2009.

Nine Acres for Sale in the TIF District

Seven Undeveloped Parcels within the TIF District Total About 9 Acres

At the northeast corner of Buckner-Tarsney Rd. (Main St.) and Interstate 70 in Grain Valley, interchange improvements have bumped Outer Rd. away from the highway.  Outer Rd. now encloses about nine acres of undeveloped land that is for sale.

What are the prospects for selling this land?

The primary consideration is whether commercial property is presently not available in the City of Grain Valley.  The answer is that commercial real estate is overdeveloped as part of the real estate fever that created a "bubble" of development without tenants lined up for leasing.  A commercial strip about one half a mile north of the Interstate sits almost empty.  Of the six units, only one is occupied.

In another area of town, Sni-A-Bar Plaza is not entirely leased.
Casey's built a new General Store, but the old one sits unoccupied.
Main St. has at least two vacancies – one is a restaurant that went out of business.

On top of these vacancies, S.G. Property Management is looking for tenants for the new Grain Valley Marketplace – 50,000 square feet of retail space for lease in a development which is supposed to be anchored by a theater.  This construction has begun north of the bumped out Outer Rd., across the street from the nine as yet undeveloped acres which are enclosed by the Outer Rd. and the Interstate. 

B&B Theatres, of Liberty, Missouri, will operate the theater.

Infrastructure (public works) for the development of vacant land north of the Interstate at the Grain Valley interchange is being financed by bonds that have been issued by the city.  The city's Industrial Development Authority (IDA) acts as a “conduit issuer” in order to carry out the annual appropriations pledge on the city’s bonds.  The bonds and interest are supposed to be repaid by Tax

Increment Financing (TIF) from the development district.
An Industrial Development Authority is a private corporation formed by a municipality.  Directors are appointed and approved by the mayor and the board of alderman.

If I understand correctly, the city's financing is spent only on public infrastructure which must be owned and maintained by the city once it has been completed.  These improvements include storm and sanitary sewers, road construction, curbing, sidewalks, grading, and other necessary site work such as a storm water retention basin.

See another post concerning which retailers will not establish themselves in Grain Valley and why not.

P.S.  Outer Rd. north of the Interstate is actually named McQuerry Rd. to the east of Buckner-Tarsney Rd. and Jefferson St. to the west.

Businesses Who Won't Be Coming to Grain Valley

Nathaniel's List

Price Chopper	already in Blue Springs
Wal-Mart	in Blue Springs & Oak Grove
HyVee Food Store	in Blue Springs
Target	in Blue Springs
Kohl's (with distribution center)	in Blue Springs
Ford Sales   (Blue Springs Ford)	in Blue Springs
Chevrolet Sales   (Molle)  (emerging from bankruptcy Sept. 2012)	in Blue Springs
Nissan / Hyundai Sales   (McCarthy)	in Blue Springs
Truck Stop   (Petro Truck Stop)	in Oak Grove
Westlake Hardware	in Blue Springs
Home Depot	Adams Dairy Crossing -   Blue Springs
Gap	Adams Dairy Landing -   Blue Springs
Walgreens	in Oak Grove
Other Businesses:
Missouri Innovation Park	already in Blue Springs
Conference Center	in Blue Springs
Bowling	in Blue Springs
Golf Courses	in Blue Springs,   Oak Grove, and   Independence
Horse Arena	in Oak Grove
Unnecessary:	all within a 15 minute drive
Movie Theater	already in Blue Springs, and   Independence

Inappropriate Establishment of a TIF District

It's Inappropriate to Establish a TIF District for the Development of Land That Is Empty

A city's economic development council (EDC) should establish a TIF district where economic activity already exists

It's inappropriate to develop the Grain Valley Marketplace northeast of the I-70 interchange using TIF funds.

This special taxing district is useful to existing business people because it spreads the costs of improvements over a repayment period of 15 to 20 years.  When the properties generate an increase in property taxes, the property owners in the district are assessed payments from this incremental increase to pay off the revenue bonds which the city sold for the district.

Instead, the City of Grain Valley is using the TIF district almost entirely for speculation that new businesses might establish themselves.  Only one existing (and successful) business, McShop, is within the TIF district.

In the City of Grain Valley, the authority for this district is the Grain Valley Industrial Development Authority, MO.  This public/private venture is an administrative organization.  It is financed by the City of Grain Valley, which bears the ultimate financial risk of development and redevelopment.

City taxpayers, though, immediately begin to pay interest to the investors who bought the bonds.  This is like your 30-year mortgage.  Your monthly payments are almost entirely interest.  You'll notice that you acquire equity in your home at a rate that is much slower than the actual monthly mortgage payments that you've been making.

Grain Valley - Gateway to Kansas City?

This is the city administration's vision for the future

Nathaniel's Commentary – recorded August 2, 2012

• Gateway to Kansas City – is this a sensible plan for the City of Grain Valley?
• Two trends indicate that Grain Valley will remain semi-rural for some time to come.
• Grain Valley could position itself as a day trip destination.
• This satisfies a market to get away from the city without spending a lot of money.
• It's an accomplishment based on the efforts of individuals who do what they do best and collectively marketed by the Chamber of Commerce and the Economic Development Council.
• This is not a budget breaking effort.
• As an overnight destination, Grain Valley has two motels and is the gateway to points east:
   °  the Battle of Lexington State Historical Site,
   °  the Confederate Memorial State Historical Site,
   °  a trail head for the cross-state Katy Trail, and
  Fort Osage.
   °  Lexington, Missouri, is an example of a town which has redefined itself with a vision of being an attractive destination.
   °  Could Monkey Mountain Nature Preserve be marketed as a day trip destination?
• What amenity is missing?  Fine dining near the interchange and the two motels.
• Instead, an eight-screen movie theater is being built to anchor new development.
• However, first run films are available for viewing at the Blue Springs Cinema – less than a fifteen-minute drive from Grain Valley, on 7 Highway.
• If the Grain Valley multiplex theater opens on time, in November 2012, patrons will find themselves next to heavy and dirty road construction for eleven months.
• The dirtiest part of the project to rebuild the I-70 interchange and relocate 40 Highway will only be finished in October 2013 – a full eleven months of dirt and noise after the theater has opened.
• A restaurant and another gas station had been adjacent to the Interstate – Apple Trail Restaurant, which has been demolished without plans to replace its services.
• Lit-up sign towers for gas stations are not especially pretty, but they are effective to bring in business from off the Interstate.
• McStop is to be rebuilt and improved as a nicer gas station and convenience store.
• A fine dining restaurant is, I believe, the best usage for part of the nine acres adjacent to the interchange which have been completely leveled.
• Real estate agents are presently trying to market these nine acres (about seven parcels).
• Blue Springs is the actual gateway to the Kansas City Metro by virtue of its extensive retail development – it has something for everyone, so to speak – even for Grain Valley residents.
• Grain Valley can invite people driving from the east to get off the Interstate to refill their gas tanks and freshen up before entering the Kansas City Metro itself.
• Below, I call this Grain Valley development at the Interstate's interchange a full service "oasis."
• Once drivers reach Blue Springs, they are probably inclined to continue driving straight through to their destination in the Kansas City Metro.
• Drivers see that the parking lot at the fine dining restaurant is busy.
   °  Locals stop by for coffee and pastries in the morning.
   °  Then, lunchtime brings in townspeople and workers for lunch.
   °  It's a coffee shop all day long, with a WiFi Internet connection.
   °  In the evening, two different crowds come in for dinner: those who want an ordinary dinner and those who want a slow, gourmet dinner with table cloths which is off separately on a side of the restaurant.
   °  How about entertainment on Saturday nights?
   °  The breakfast and lunch menus and take-out are available 24 hours a day.
   °  Local eateries pool their talents, becoming stakeholders in this fine dining restaurant.  They also advertise their specialties to encourage patrons to venture south to the Old Towne Marketplace through downtown Grain Valley.
• The two trends which indicate that Grain Valley will remain semi-rural and on the edge of the Metro for some time to come:
   °  Some people are beginning to prefer living downtown rather than in the suburbs.
   °  Young people are taking up specialty farming.

·  Conclusion:

• The eight-screen movie theater being built on the northeast corner of the I-70 interchange will fail – it's a really bad investment.
• If the theater opens in November 2012 as scheduled, nearby heavy reconstruction of the interchange will turn patrons away – for at least 11 months until the road construction is finished.
• Enterprises which are already in the city are its attractive amenities.
• The city's administration has lost touch with the essence of what Grain Valley has been.
• Life in Grain Valley flows at a slower pace than in the Kansas City Metro, and this is an attraction.
• City Administrator Alexa Barton says, "It's a good idea to take on bigger projects which impact the city as a whole."
   °  This is what I call the "big fix," as apposed to the idea of a couple of little fixes at a time.
   °  The "big fix" has never been shown to be a successful strategy.
• Residents contribute in their own ways, without a large investment of capital, to improve their own businesses and neighborhoods.
• The city provides services and engages in public works as traditionally done.
• This public/private partnership keeps taxes in line.
• The city's administration seems to not be aware of two national trends:
   °  Americans have started to move to cities from the suburbs, unlike the trend since the 1950s.
   °  The second trend is that young families are starting small scale farms with year-long production near big cities for local niche markets.
• My projection (for the next half dozen years or so) is that Grain Valley will remain semi-rural, somewhat slow-paced and quiet, with strong family values.
• Nevertheless, with thoughtful and careful planning, Grain Valley can become a day trip destination and an oasis for travelers driving from the east.

·  Afterthought – recorded August 7, 2012

• The city's Comprehensive Plan should, I belive, designate the area around the interchange with Interstate 70 as a traveler's oasis (especially on the north side of the Interstate, for travelers driving in from the east).
• Learn from the example of the oases on the Illinois Tollways around Chicago.
• Stalls for a variety of local and national eateries.
• Before rebuilding these oases for the 21st century, they had been anchored by Harvey House and Howard Johnson restaurants, then by Burger King, McDonalds, and the like.
• A dining area for people to eat, use their computers, read, and otherwise relax.
• Immaculate restrooms.
• All together, the inside of the Illinois oases are like a concourse in an airport.
• Drivers can choose to angle off first to a gas station with diesel fuel and its own small convenience store which stands on its own pad.
• The parking lot contains tree islands, and the entire oasis is tastefully landscaped.
• Travelers who are freshening up may choose to stay overnight at one of the local motels before actually entering the Kansas City Metro.
• The Grain Valley Oasis – a hospitality center – bespeaks prosperity and quality.
• "Oasis" is the marketing brand.
• This Oasis anticipates the possibility that MoDOT will close its rest stops as a cost saving measure.
• Full content blue signs on the Interstate, partly underwritten by the Chamber of Commerce and the Economic Development Council as necessary.
• Marketing, marketing, marketing.

°  Coming – Listen to these comments - 25 minutes

Fuel
McShop	Conoco
Casey's

Food
"Fine Dining"	Sonic
El Maguey	Gambino's Pizza
Anthony’s Italian Restaurant

Lodging
Americas Best Value Inn	Comfort Inn

Camping
Trailside RV Park

Grain Valley Life Styles

Rural and Small Town

Country Comfort – Country Comfort are filled with predominantly white, middle-class homeowners.  These Americans tend to be married, between the ages of 25 and 54, with or without children.

Middle America – This segment is filled with middle-class homeowners living in small towns and remote exurbs.  Middle Americans tend to be white, high school educated, living as couples or larger families, and ranging in age from under 25 to over 65.

Rustic Living – Rustic America residents have relatively modest incomes, low educational levels, aging homes, and blue-collar occupations.  Many of the residents, a mix of young singles and seniors, are unmarried.

Landed Gentry – The Landed Gentry social group consists of relatively wealthy Americans who migrated to the smaller boomtowns beyond the nation’s beltways.  Many of these households contain Boomer families and couples with college degrees, professional jobs.

from:  Claritas “PRIZM” Clusters Descriptions

"Liberty and Justice for All"

Liberty and Justice Promote Justice and Liberty

One fruit of liberty is that justice is possible in the United States.

In my opinion, the other side of this expression in the Pledge of Allegiance is that if we fail to achieve justice, we lose some of our liberty.

The way Grain Valley goes is the way the rest of the nation goes.

The City of Grain Valley's administration is not likely guilty of any crimes.

What I do see is arrogance, high-handedness, venality, and shameful behavior.