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Mission Council gets lesson in finance
The Mission City Council could apply for a degree in finance by the time the Gateway project turns its first shovelful of dirt.
Wednesday night the topic was internal rate of return and how the council can figure out if the deal it plans to make with the New York developer is reasonable for both parties. The city’s independent financial advisor, Bruce Kimmel, presented the council with a pro forma for an estimated rate of return the developer might expect with no public financing and another scenario with $30 million in public financing, a number that has frequently been discussed as a target.
With no public participation, the return is projected at 3.6 percent — not a figure that is sufficient to move the project forward, Kimmel speculated. With $30 million of public bonds, the rate rises to 12 percent, a number lower than current market rates on such projects (above 16 percent), but likely sufficient to get the project built, he told the council.
The city is still awaiting a number of reports and assessments on the project and real estate before it will have final figures to make its decisions. Those are expected to be completed in the next few weeks. Public hearings on creating the special financing districts are scheduled for Oct. 17. The city also is planning public meetings to explain the project when the final numbers are available.
The $158 million mixed use development is being built at Shawnee Mission Parkway and Roe Avenue.
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