FAQs: Frequently Asked Questions

Under Kansas tax increment financing (TIF) laws, cities can fund projects in two ways:

1. The City issues “bonds” to generate up-front cash necessary to do a project and then repays the bond over 20 years using TIF proceeds; or

2. The developer privately finances a project and then the City reimburses the developer on a “pay-as-you-go” basis as TIF revenues are generated and collected over that same 20 years.

    

There are differences between “public benefit TIF” projects (such as the one proposed by the City of Westwood) and “private TIF” projects. Most private TIF projects use the second approach, avoiding bonds.

In Westwood, Karbank did not request TIF incentives and has not asked that the tax increment go towards their private development costs. Instead, all of the TIF increment proceeds will fund a new City-owned park and related public infrastructure improvements. That is, a “public benefit TIF”.

Yet, for the City to pay for a new park, it must still generate the up-front cash in order to pay contractors, pay for play equipment, etc. Cities, however, are not permitted by law to obtain private bank loans in the same ways that private developers are.

For this public benefit TIF, the City would likely bond (borrow) the costs of the park project, similar to how residents may take out a loan to build or expand their homes. This will allow the City to fund the park immediately rather than waiting 20 years for TIF revenues to build.

Residents should not expect that their property taxes will go up to pay off bonds.

There are generally two types of bonds the City would consider issuing:

1. general obligation (“GO”) bonds which are backed by or paid off by City revenues; and

2. special obligation (“SO”) bonds which are backed by or paid off by revenues from specific projects (such as the Karbank project).

The City has not determined the exact structure of any future bond issuance (doing so would be premature prior to the Spring election).

While the City could issue GO bonds for the full scope of the project, the City anticipates instead that a bond issuance would include SO bonds which would be paid back by the Karbank project revenues, not general City tax dollars. The City may issue a combination of both GO and SO bonds in order to make the bonds more marketable and obtain more favorable terms (such as lower interest rates, which would reduce debt service, allowing for more dollars to be spent on the park and other public improvements).

This possibility is referenced in the City’s preliminary pro forma (published here), with the assumption that bonds would be “further secured by its general obligation pledge”. This is not unusual in municipal finance for public projects that provide public benefits and reflects the City’s conservative approach to financing. However, the City’s preliminary TIF pro forma indicates that TIF proceeds from the project will be sufficient to pay all debt service payments.

As an example, in 2016, the City of Prairie Village issued approximately $19.435 million in bonds in order to develop the Meadowbrook project, which included the new Meadowbrook Park. Of those, $8.135 million were in special obligation (SO) bonds, and $11.3 million were in general obligation (GO) bonds. However, since the TIF proceeds from the project generated enough value to make all payments on both types of bonds, in 2021, the City of Prairie Village refinanced all GO bonds into special obligation (SO) bonds.

Other revenues generated by the project (outside of the TIF), such as sales taxes, liquor taxes, and franchise fees, would be available for general City uses almost immediately after project opening. Building permit fees would also be generated for immediate City use upon construction commencement.

The City will closely follow the recommendations of its professional financial advisors in determining how the bonds should ultimately be structured.

Karbank cannot sell or lease the property to tax-exempt entities (such as KU Med) without City approval.

Even if the City did approve a sale to a tax-exempt entity, the new owner must make “payments in lieu of taxes” (PILOTs) to the City equal to the property taxes owed for the remaining term of the 20-year TIF agreement between Karbank and the City to ensure funding for the new park and other related public improvements.

The City is not aware of KU Med having approached the City indicating an interest in acquiring Dennis Park, 5050 Rainbow (the former church), or the former Westwood View site.

The City understands that KU Med is a strong and growing presence in the area. The City of Westwood is also quite proud to be the current home of the KU Cancer Center, the only National Cancer Institute (NCI) “comprehensive” cancer center in the State of Kansas. Every day, KU Med—including the Cancer Center—provides amazing care for our community.

In 2025, the KU Cancer Center also intends to break ground on a new cancer center located at its 39th and Rainbow campus in Kansas City, Kansas. The long-term future of the existing facility in Westwood is not yet known.

https://www.kucancercenter.org/unitedinhope-new-cancer-building

Concerns about potential tax revenue loss after the 20-year TIF term overlook that Dennis Park and 5050 Rainbow generate zero dollars in property tax revenue, sales tax revenue, liquor tax revenue, storm water utility fees, or franchise fees. Since the sites are already tax-exempt, any future exemption would not result in a loss—rather, the Karbank project would create new revenue during the TIF term, enabling the City to fund a new park.

All of Karbank’s buildings are proposed to be at least “Class A” buildings, and likely even “Class A+”. The Building Owners and Managers Association (BOMA) defines a Class A building as a “premier space with rents above average for the area.” Class A office spaces have newer, high-quality finishes along with updated systems and technology.

While the values for Class A and Class A+ office space across Johnson County vary significantly, County records reflect values on some new Class A buildings north of $180 per square foot and for Class A+ buildings north of $200 per square foot.

In addition, the County Appraiser values first-floor retail in mixed-use buildings differently than office space. In Johnson County, Class A values for first-floor retail generally range from $280 to $380 per square foot. In fact, the first-floor values for Woodside Village North exceed even that, being currently valued at $384 per square foot.

The City’s financial advisor took a conservative approach in the initial TIF pro forma, so as to not overpromise or oversell the TIF analysis. That analysis may be seen here. Given Karbank’s expected build quality for the site, the City is confident in the modeling, which establishes that TIF proceeds will be sufficient to pay off the City’s bonds without the City having to look to residents and their tax dollars.

The City understands the confusion surrounding demolition cost estimates. No formal bids have been obtained, but estimates vary: Multistudio’s 2022 assessment projected $1.7–$2 million, while the City’s Donation Agreement with Karbank lists $350,000. This discrepancy arises from differences in scope—Multistudio’s estimate included grading and sodding, while Karbank’s figure covers only school demolition.

This issue was noted in the August 28, 2023, Message from the Mayor regarding the Karbank and Park Development Project and can be referenced here.

Whereas Multistudio’s demolition estimates included “finish grade and sodding”, the $350,000 referenced in the Karbank Donation Agreement only applies to “the cost of the School Demolition” (not grading or sodding) (and the cost is not limited to $350,000—it is just a stated estimate).

To provide a balanced estimate, the City FAQ (direct link available here) referenced a $1 million demolition and grading estimate.

Although that was just an estimate used for illustrative purposes, and included “grading”, changing the demolition figure to $350,000 in the cost calculation shown in the FAQ linked above would result in a total net benefit to the City of $8,460,000.00, all other factors left as stated in the FAQ calculation. 

Even using the lower $350,000 figure, the Karbank contribution exceeds the highest appraisal for Dennis Park and 5050 Rainbow received by the City ($4.3 million), which appraisal was dependent on the property being rezoned for development and not remaining as it currently is, based on rezoning).

The City would also own 3.8 acres of land, compared to the 2.8 acres of land it has now, the City debt on the 5050 Rainbow property would be paid off, and the City would have new and future revenue streams for City operations and projects. 

No. Karbank cannot change the project to residential “at any time”. The property is zoned “Planned Commercial”, and offices and retail are the approved uses of the development. 

Should Karbank—or any other future owner—desire to change the approved zoning or use (such as to multifamily residential), they would need to follow the standard rezoning process and make application to the Planning Commission for consideration and approval by the City Council. This cannot be done without a public review and approval process, including a public hearing, with statutory notice to surrounding property owners.

Karbank recently announced its plans to construct a new three-story Class A office and residential building in Mission Woods, known as the “1957 Building”. Karbank’s zoning in Mission Woods allowed for this project and in May 2024, the Mission Woods Board of Zoning Appeals also approved the project. Karbank followed all Mission Woods requirements and obtained all Mission Woods approvals necessary.

If Karbank ever seeks to amend its approved development plan in Westwood, it would require City approval, including review by the Planning Commission, City Council approval, resident notification, and a public hearing.

The Karbank project cannot expand into the new City park. Karbank cannot develop City-owned land, and the City is entering into a Declaration of Covenants and Restrictions ensuring the site remains a park for over 40 years.

The City will own the new park. Karbank will not have a lien on it. 

Yes, appraisals were obtained by the City.

In 2022, JLL Valuation & Advisory Services—an international and Fortune 500 firm—established a combined market value conclusion of $1.57 million for the Dennis Park and the 5050 Rainbow (former church) sites. However, that appraisal assumed current land use and zoning (residential/park), not the ability to develop the site.

In the 2022 City Facilities Assessment and Feasibility Analysis, Multistudio estimated that the properties would have a value between $3.5 million and $4.3 million, but only if rezoned for development purposes.

The City and residents have explored various ideas for the area through planning efforts such as the 2015 Urban Land Institute (ULI) Technical Assistance Panel Study, the 2017 Comprehensive Plan, the 2021 ULI Study, and the 2022 City Facilities Assessment and Feasibility Analysis.

Perhaps most importantly, many options, ideas, and choices were presented to the residents of Westwood for their input.

Following the 2022 City Facilities Assessment and Feasibility Analysis, the City conducted resident surveys and held an open house, soliciting and obtaining very good feedback from residents on options the City might consider. That is, several conceptual choices were provided to Westwood residents, and residents were asked to provide their opinions on these choices from both a “land use” perspective and from a ”financial” perspective.

66% of survey respondents felt that the best approach to improving City facilities and amenities (such as increased park space) was to leverage available property to generate additional revenues. Of the various scenarios presented, residents’ top choices contemplated development on the site of existing Dennis Park and former church property. 

Ideas and concerns were also considered by the Planning Commission and the City Council during the nearly seven-month-long public engagement process that started in March 2023. Many public hearings and open meetings were held, several of which lasted for several hours as the City received public input and feedback.

As a result of this input, Karbank made a number of changes to its proposed project. These include the following:

• Reduced project size by 15%;

• Concentrated building height in the interior;

• Switched to muted earth-tone materials;

• Added more parkland and increased setbacks;

• Improved park access with dedicated parking.

The Planning Commission and the City Council determined that the Karbank proposal aligned with the City’s goals and objectives and the preferences of most Westwood residents.

The Karbank project and the new park are linked, with part of the development planned for the former Westwood View site. The City does not own that property—it is owned by Shawnee Mission School District.

In late 2022 and early 2023, the School District informed the City that it would soon market and sell the former Westwood View property, offering the City a chance to "match" the highest bid. However, the City lacked the funds to immediately purchase the property and match any expected bids.

When Karbank presented its proposal in March 2023, the City worked with the School District to exercise the City’s 2019 option agreement, pausing the bid process and allowing the City to consider the proposal. In March 2023, the City began a public engagement process, lasting seven months, to determine if the Karbank project was a good fit.

As a result, the City, Karbank, and the School District agreed on a $2.65 million purchase price, and the School District paused its marketing plans. Following public hearings and feedback, both the Planning Commission and City Council approved the rezoning and development plan.

Throughout the process, the project was adjusted based on public input, including changes to building placement, tree preservation, materials, traffic analysis, project size, and additional parkland.

The City has considered whether selling residential lots could fund park redevelopment, but this approach presents significant challenges. The City is not a developer of residential subdivisions.

In order for the City to sell homesites, the City would first need to purchase the former Westwood View Elementary site. The City cannot sell property it does not own to residential developers, or to anyone for that matter. The City does not have immediately-available money to pay the $2.65 million purchase price for the school site. 

Bonding (borrowing) even $2.65 million alone would require a 21% property tax increase (over 4.5 mills). Additional borrowing for demolition, debt repayment, upgrading both Dennis Park and 5050 Rainbow, and the like—millions of additional dollars of debt—would further increase taxes.

Furthermore, the previous option agreement with the School District expired in February 2024, and the site’s current appraised value exceeds $3 million.

Those costs would be on Westwood residents and businesses only. Westwood Hills and Mission Woods residents would not share in these costs.

This plan also assumes the City could successfully replat, develop, market, and sell lots at high values to quickly repay bonds. This is highly uncertain and risky for taxpayers. If the City is unable to do any of those things, then the lot sale revenues would fall short of the amounts needed to pay off any general obligation (GO) bonds of the City.

Finally, it is not appropriate to use the purchase price for recent tear-downs as a guide for establishing the value the City could get for selling new lots:

• The value of existing tear-down lots would not include the costs of survey and engineering fees for designing and engineering a new residential subdivision.

• The City would need to construct new streets, rights-of-way, curbs, gutters, storm sewers, sidewalks, and streetlights. Current lots in Westwood, even tear-downs, are priced as if the costs of streets and the related infrastructure serving them are already included.

• The City would need to construct and install (or pay for) utilities to the sites, such as electricity, gas, sanitary sewer, and fiber. Current lots in Westwood, even tear-downs, are priced as if the costs of bringing utilities to them are already included.

Those are costs—in millions of additional dollars—that are not accounted for when pricing lots according to existing tear-down values. The City and its residents would be responsible for these costs, including payments on general obligation (GO) bonds.

In contrast, the current public benefit TIF plan funds park development without raising property taxes, making it a more financially viable solution.

Traffic and safety improvements are a key part of the development, with a focus on pedestrian safety. This includes building a sidewalk on the north side of 50th St. between Rainbow Blvd. and Adams to help families avoid crossing the entrance to the Karbank shops (employee parking for the office tenants is not accessible via 50th Street).

The project aligns with the Rainbow Boulevard Complete Streets and Traffic Management Plan, which recommends new crosswalks at 51st Street and Rainbow and at 48th Terrace and Rainbow to allow students and families to cross safely at locations closer to their homes. This should reduce pedestrian traffic at the 50th Street and Rainbow intersection.

Taxes from the Karbank development are also intended to fund upgrades to nearby streets, including pedestrian access improvements and bike-friendly modifications on 50th Street and 51st Street/51st Terrace.

A traffic study of the Karbank development was conducted and reviewed by an independent third-party traffic engineer. Most traffic will enter the development south of the 50th Street and Rainbow intersection, as no garage access and no Rainbow frontage parking is accessible via 50th Street. The development will not have drive-throughs or street parking.

More information about the development’s traffic and pedestrian impacts can be found here and here.

The City is also reimagining the Rainbow corridor to reduce traffic lanes, lower speed limits, add bicycle lanes, and improve pedestrian access. More information on that initiative is available here.

Should the ballot measure pass, the City will move forward with the sale of the existing park to Karbank, who would then move forward with their approved plan for a mixed-use development at 5000 Rainbow Blvd.

The City would then also continue the planning process for the new feature park. Preliminary planning work for the new feature park can be viewed here. The next steps in that process would be:

1. Incorporate additional public feedback into the park proposal.

2. Finalize the park design recommendation for Planning Commission and City Council approval.

3. Complete engineering and site plan review.

4. Finalize financing options for the park.

5. Develop construction documents and select a contractor.

6. Begin construction (timeline depends on final design).

7. Hold a ribbon cutting ceremony. 

If the ballot measure fails, then the City would retain Joe D. Dennis Park and it would remain in place. Neither the Karbank development nor the new park would be built. The City would also continue to hold the vacant former Westwood Christian Church site (which is not officially part of Dennis Park) and approximately $275,000 in debt on that property.

There are not any current plans or funds budgeted for renovation or expansion of Dennis Park or the former church property. Dennis Park would remain as it currently is and continue to be used for park purposes. At some time, the City may need to determine what use—if any—should be made of the former church property, whether that be for park and green space or other uses.

The School District would likely seek another buyer for the old Westwood View school site, and the City would have no control over that sale. The City would not be in a financial position to purchase the property, and the City expects that the school building itself would remain in place until a buyer with a development plan having sufficient economics to permit demolition and development materialized. The property could remain vacant and perhaps fenced off until that time.

The City does not know what other types of projects could be proposed by future owners. If future owners of the site present their own development proposals, the City would review those under the City’s zoning regulations but would not otherwise have a say in them or participate in them.