PAOLA — A developer stepped forward in 2019 and announced plans to purchase and develop a 36-acre tract of land along Paola’s primary entryway near the intersection of Baptiste Drive and Hedge Lane.
The proposed development is being called Paola Crossings, and it was made possible thanks to an incentive package provided by the city.
Paola city leaders spent several months working with Chris Williams of Highlands Development to iron out the details of the incentive package.
The current proposal includes the creation of a Redevelopment District, which would involve the utilization of a Tax Incremental Financing (TIF) policy that the city revised last fall in preparation for this project, as well as the creation of a Community Improvement District (CID) that would generate additional sales tax revenue for the developer.
TIFs divert future property tax revenue increases from a defined area or district toward an economic development project in the community. The existing property tax base on the property will remain unchanged. The developer will only capture the incremental property tax increases on the property during the TIF’s 20-year time frame.
The city won’t be issuing any bonds to fund initial excavation or infrastructure work. Instead, the developer will be utilizing a pay-as-you-go approach in which he will put up the initial development costs and then be repaid with the incremental property tax increases from the land as it develops.
Other categories of property tax revenue, including the state mill levy designated for schools, also cannot be captured by the developer, per state statute.
In addition to the TIF incentive, the proposal also includes the creation of a CID within the boundaries of the project. The district gives the developer the ability to establish a special sales tax for the development, as well as capture a portion of the city’s general sales tax.
The current proposal is 1.25 percent, which means shoppers will pay a higher sales tax for products purchased within the boundaries of the CID.
Williams said the current design plan calls for the creation of a south entrance into the development off Baptiste Drive, along with two entrances from Hedge Lane.
The Paola Crossings development will be split into five phases. Williams said the first phase, which would focus on six lots covering 9.6 acres near the corner of Baptiste Drive and Hedge Lane, will likely involve retail and commercial. It is also the most expensive phase, with an estimated development cost of $14.6 million.
Paola City Council members unanimously supported the planned Paola Crossings development following a public hearing in October. The project also received support from the Miami County Commission and Paola school board.
Williams has also shown interest in developing the other side of Baptiste Drive across from the proposed Paola Crossings project.
In November, the Paola City Council held a public hearing and adopted an ordinance establishing a CID on a 1-acre lot on the other side of Baptiste Drive next to Arby’s. The CID would also allow for an additional sales tax of 1.25 percent, but it would not be part of the Paola Crossings TIF.
During a special meeting in December, council members approved a redevelopment project plan for the Paola Crossings District. City officials said that once the agreement between the city and developer is signed, work on the project can begin.
Dirt work is expected to begin in early 2020.