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The Kenig Konnection

February 2016 - Part 1

A New Year, New Opportunities

<<First Name>>,
I hope you had a wonderful holiday and Happy New Year. The holidays were definitely a welcome respite from a very busy end to 2015, and so I apologize for the delay in writing this newsletter - it was definitely not for lack of issues and items to discuss, as we've been busy on several matters at the city level. Work, travel, and issue research for the council has kept me fairly busy in the new year.

The Governing Body is meeting at City Hall once again now that the remodel of our chambers is complete. I encourage you to attend one of our meetings when you have a chance and check out the remodeled council chambers.

The benches have been replaced with chairs, to allow for more flexible uses of the room. Additionally, the old projection screens on the side walls have been replaced with large LCD monitors that face out to the audience, allowing citizens to better view documents, maps, and other visuals related to agenda items. Additionally, we on the Governing Body now have our own monitors up on our dais so that we can follow staff presentations more easily. Audio devices have also been upgraded and the chambers are video-ready so that we can consider live-streaming our council meetings online in the future. I appreciate that we provide recorded minutes of our meetings both in written and audio formats, but video of our meetings would have a major impact in introducing residents to their government, allowing them to put faces to the names, and to visually analyze how our discussions and debates play out (so much is lost without the visuals). Other cities that have introduced live-streaming video of their proceedings have seen substantial increases in citizen access of council proceedings and engagement on issues and agenda items. I believe in providing as much transparency as possible to how government works and giving citizens all the tools available to interact and petition their local government officials. The upgrades to our council chambers are a step in that direction; eventual video-streaming will be another step forward.

Lastly, I was very proud to work with city staff and chamber staff on the passage of updates to our SEED program to provide incentives to attract startups to Shawnee. This has been a longtime passion of mine as a technology entrepreneur myself and the work we have accomplished would not have been possible without the incredible time and effort by staff to make my vision a reality. All of that is detailed below, as well as a summary of the actions taken over the Vantage Apartment project, which has become a regional news item now.

The overview of our new city incentives for startup companies and the explanation of the voting process and issues regarding Vantage required much space, so I was forced to separate my update for this month into two separate newsletters. This is Part 1. Part 2 will be sent out within the next few days, covering upcoming city events in-depth and an update on the odor situation with the Deffenbaugh landfill.

Startup Incentives Launched

Shawnee incentives aim to attract startups

I'm very excited to announce that our city is now the only city in the entire KC metro area to have a unique set of incentives to attract and retain startups. As a digital marketing consultant and technology entrepreneur myself, I recognize the value in leveraging the arrival of Google Fiber in KC and in Shawnee along with the related surge in startup growth to ensure we capture and attract some of those innovators and entrepreneurs seeking friendly areas to locate and expand their business.

I began working with city staff, Shawnee Chamber of Commerce staff, and Shawnee Economic Development Council staff on some of these ideas starting last summer. Our Shawnee Entrepreneurial & Economic Development (SEED) fund provides incentives to companies to relocate to our city in the form of excise tax abatements, interest-free forgivable loans, and reimbursement payments for businesses that have received Small Business Administration (SBA) loans from the federal government. The SEED program is funded entirely from revenue generated by the landfill impact fee - payments to the city by Deffenbaugh Industries (now Waste Management) to offset the impact of lost tax revenue and development from hosting one of the largest landfills in the Midwest. SEED receives program funds from the city's economic development fund and does not rely on any taxpayer funding.

While SEED serves a very valuable purpose and has resulted in major industries relocating to Shawnee and creating thousands of new jobs, most of the existing programs appealed to larger, established, more mature firms - not startups operating in basements and garages seeking to transition into office space. After talking with many entrepreneurs, I crafted ideas to attract startups and worked with city and chamber staff to develop them out into sustainable programs that could be maintained long-term and efficiently managed.

The first program is the Property Tax Assistance Program, targeted towards startup businesses ready to purchase property (office space). Most startups, on average, do not become profitable until one year after receiving their first Angel investment, which can be 6 months to one year after conceptualizing their business idea and becoming operational, which means that it may be up to 2 years after incorporation before a startup becomes profitable. With this statistic in mind, we structured this program to provide an annual payment to eligible, high-growth businesses that will provide 100% reimbursement for property tax in Year 1, 75% reimbursement in Year 2, and 50% reimbursement in Year 3. The program is structured to provide maximum benefit in Year 1 when a startup is least likely to be profitable based on average startup profitability figures, and decrease gradually in subsequent years, aligning with a startup's potential to become more profitable over time. Additionally, startups are eligible for a fourth year of reimbursement at 25% of property taxes paid if they provide funding or space to another startup that is a client of The Device Shop (a Shawnee-based startup incubator and co-working space) or clients of the Enterprise Center of Johnson County. This directly incentivizes other startups to "pay-it-forward" and directly invest in other startups in our community, addressing the other challenge for startups in our community: capital investment.

  Property Tax Offset
Year 1 100%
Year 2 75%
Year 3 50%
 Year 4* 25%

*Optional Year 4 based on evidence of financial support or space allowance to another startup.

The second program, the Lease Assistance Program, appeals to startups who cannot afford to buy property, but want to rent office space, and move out from their home office or basement. Based on feedback I've heard from entrepreneurs, office rent is the most significant expense for startups who are operating in a very lean manner and trying to achieve profitability at a time when all revenues are going directly back into operating the business. This new program provides rental reimbursement offsets to eligible businesses in high-growth industries based on the number of employees:

Number of Employees Leasing Offset
2 20%
3-5 25%
6-10 30%

Eligible startups for both programs will forfeit funds if they leave Shawnee during the agreement period or do not remain in the city for one year following the agreement.

Both new program additions, together called The Startup Workforce Relocation and Expansion Program, passed out of council committee on Dec. 8th by a vote of 7-1 and garnered unanimous support at our Jan. 11th city council meeting, passing 8-0, indicating full support for attracting startups to our community. I'm thrilled that my fellow councilmembers recognize the value in this program.

The vast majority of new jobs come from small businesses - startup businesses - and these startups have the greatest potential to grow into large, regional employers.

These new programs have already generated positive press in many news outlets - I've included the links to the articles below, where you can find more information and details on the programs as well as read through my comments and recent media interviews on how this is a game-changer for our city.

Our city motto is "Good Starts Here." With our commitment to innovation and attracting new talent, I think we can also say "Good Business Ideas Start Here."

Many thanks to City Manager Carol Gonzales, City Finance Director Maureen Rogers, and Shawnee Economic Development Council Director Andrew Nave for their hard work and support in making these ideas a reality.

Recent Press:

Vantage Apartment Proposal

Project was recently voted down on 5-3 vote

This project has generated considerable news and controversy over the last several months. I'll attempt to explain both sides of the issue, how and why I voted as I did, shine a light on what might have seemed like a confusing voting process, and the impact this will have on our community.

The developer, America First MultiFamily Investors, approached Planning Commission with a request to rezone the vacant land at 62nd and Pflumm (land parcel to the north of the Hy-Vee on SM Parkway and Pflumm and just south of the Shawnee Civic Centre, library, pool, and park) from mixed use and mixed residential to solely mixed residential to allow for the construction of a market-rate, upscale, 312-unit, 14 building (three-story) gated apartment complex to be called Vantage at Shawnee. The vacant land had been previously zoned as agricultural prior to being rezoned for the Cobblestone development (a project that called for senior villas in an independent living community with light office and business development). That project had been incentivized through tax-increment financing, but the developer retracted his proposal for that project.

The Vantage project did not include any use of taxpayer incentives - a major improvement from the previous development proposal for the area - and the developers offered to pay for stomwater drainage improvements to the site, which the city (and our taxpayers) would otherwise have to financially support with most other projects proposed on the site. The market-rate, luxury apartment project would have been a gated community complete with amenities such as a dog park, walking trails, Starbucks coffee bar, individual washers and dryers, garages, and individually fenced yards in addition to basic amenities such as a pool, fitness center, and outdoor cabanas.

Several residents in the immediate neighborhood opposed the project, fearing an increase in crime, traffic, and concerns that the property could become subsidized housing at a later date. Residents generated a successful protest petition, which meant that by state statute, a super-majority of the Governing Body (7 of 8 voting members) was needed to approve the project.

The Planning Commission approved the rezoning for the project by a vote of 9-2 before it arrived before the Council on 12/14. After much spirited debate over the course of 5.5 hours, we voted on the proposal. The Governing Body held six different votes. There were not enough votes to approve the rezoning - that vote failed the first time on a 4-4 vote (I voted YES, along with Councilmembers Sandifer, Vaught, and Meyer). Yet just as there was a super-majority (7 vote requirement) needed to approve the rezoning, 6 votes were needed to override the Planning Commission and deny the rezoning (rather than a bare majority of 5 votes) but the vote to deny also failed, 5-3, falling just one vote short of the six votes needed to override the Planning Commission (I voted NO, along with Councilmembers Meyer and Vaught). After this, another vote was held to approve the rezoning which again failed, this time 5-3 rather than 4-4 (Councilmember Sandifer switched his vote). The only option left - since we were deadlocked - was a vote to remand the rezoning back to Planning Commission for reconsideration based on traffic issues. That initial vote failed 5-3 but on a second vote, deadlocked at 4-4 (with Councilmember Sandifer switching his vote once more and supporting the remand back to Planning Commission, after initially voting against it). Since the vote was tied, Mayor Michelle Distler had the opportunity to cast the tie-breaking vote, and voted to send it back to Planning Commission for reconsideration on traffic issues, so that vote was successful, 5-4 (with Mayor Distler, Councilmembers Vaught, Meyer, Sandifer, and I all voting YES).

The Planning Commission reconsidered the rezoning again at their January meeting and voted again to approve their original rezoning by the same vote margin - 9-2. The Governing Body reconsidered the rezoning for the final time at our January 25th meeting, and now the rezoning denial and override of the Planning Commission only needed a bare majority to pass rather than six vote threshold. The Council voted 5-3 to override the Planning Commission and deny the rezoning (I voted NO along with Councilmembers Meyer and Vaught).

I respect those who were opposed to the project and the concerns that they voiced. Ultimately, we had to vote based on what is termed the "Golden Factors" - how appropriate the development is for the site in question and how it conforms to our land-use guidelines - not existential factors such as general opposition to apartments or fears on what may happen regarding crime and residency years into the future. Our land use guide has specified medium-density development for this site since 1987. Although it has been zoned agricultural and was only rezoned for mixed residential and mixed used since the Cobblestone proposal last year, medium density mixed residential was always the intended use and was just contingent upon the submission of an appropriate project proposal by an interested developer.

Furthermore, I've heard from many friends and neighbors that Shawnee does not have enough upscale apartments to appeal to young professionals and recent retirees. One of the few apartment communities in the city that meets this classification is Tuckaway at Lackman and Blackfish Parkway, here in Ward 4, which also happens to be on my jogging trail, and I pass by it regularly. Tuckaway continually has waiting lists, indicating high demand for upscale apartment living in Shawnee, and since the complex's construction, homes in the immediate vicinity have only increased in value. A recently widowed neighbor on my street recently moved to one such community in Lenexa because Shawnee has little to offer in upscale apartment living (she had lived in Shawnee since 1988). Another friend and young professional in my ward indicated he may be downsizing and selling his three-bedroom home and opting for apartment or condo living on the Plaza, since Shawnee doesn't offer anything comparable.

Analysis by the city's traffic engineers demonstrated that this project would actually generate less traffic (not more) than the prior Cobblestone development due to the lack of an office and commercial component, and it should be noted that developers responded to concerns over the density of 10.89 units per acre and concern over the overall size and buffer from existing residential properties by proposing to reduce the density per acre to just 10 units per acre and reducing the number of units from 312 to 288, which reduced the project from 14 buildings to 12, extending the buffer zone to existing residences from 25 feet to 200 feet.

Yet the project still failed.

This project not only met the land use guidelines our city had in place for this site since 1987, it was a $35 million dollar investment directly into our city without the use of taxpayer incentives like the prior proposal. Additionally, as a Millennial myself, I realize that our city needs to provide diverse housing to attract and retain young professionals with minimalist tendencies, seeking upscale, high-amenity living in smaller spaces as well as provide maintenance-free living for retirees who do not want to continue to own a residence and do not want to relocate into senior living housing. If we do not grow our community and provide options for younger professionals, a greater portion of our city's property tax and sales tax burden will fall on our seniors, who are least able to afford it. That is absolutely unacceptable, and the only alternative is to grow and broaden our tax base.

Some have criticized the quantity of apartments in our city, stating we already have too many apartment homes. Only 24% of our housing stock is multi-family, compared to 31% for Lenexa and 38% for Overland Park. Average split for a healthy city with diversified housing options is 40% multi-family/60% single-family. We are nowhere near that, and even if we had well over 30% of our housing stock as multi-family, there is an argument to be made on quality vs. quantity, and the prevailing sentiment throughout Johnson County is that we in Shawnee simply do not compete and provide upscale apartment options compared to our neighbors, Overland Park and Lenexa. Overland Park just approved a 216 unit, 10K sq foot development near 80th and Marty called "The Vue", a $39 million project funded partially through an additional one-cent sales tax (the area was designated a CID, or Community Improvement District). A Market Lofts development was also approved for the same area. Lenexa has multiple new apartment projects in the area of I-435 from 87th Street to 95th street, which will be the site of the new City Center, where Lenexa's City Hall will eventually be relocated, already near several single-family residential developments. 

The density of the Vantage proposal - at 10 units per acre - pales in comparison with the density of many of these other developments, which have well-over 20 units per acre. In the case of Mission Farms apartment community in Leawood, the density is 61 units per acre.

Another issue I hear frequently from residents is dissatisfaction with the lack of upscale dining and retail options in our city and a desire for outdoor shopping establishments similar to Zona Rosa up north and Prairiefire down south. These projects do not happen organically - they require high-density residential development. Both Prairiefire and Zona Rosa have single family and multi-family communities in the immediate vicinity of their developments, and many developers continue to tell us that Shawnee needs higher density residential areas before we will become attractive for some of these top-tier dining and retail destinations.

I also respect and understand there were wide differences of opinion on this project, specifically with traffic concerns, some of which are independent of this project and will be a factor for any potential, future project. I've had conversations with several residents in the neighborhood about current and future traffic issues in the area and I agree that the city needs to take a more proactive approach in addressing the concerns, looking at signage and traffic flow alternatives to relieve congestion and alleviate the rate of automobile collisions.

Regarding this specific rezoning for Vantage, I received emails and phone calls both for and against this project. I received many emails from neighbors opposed, but I also received emails from Shawnee residents - home owners and apartment dwellers - who were supportive as well as area business owners who supported the project, stating that higher density and increased residential development in that area would provide economic gain in the commercial areas nearby.
I think we are share the same vision for our city - we want a healthy economy with sustainable growth, safe neighborhoods, efficient and responsive city services, and reliable infrastructure.
As with any project, I always weigh and balance citizen feedback with economic impact of the project, the property owner's rights, the developer's willingness to work as a partner with the city and citizens, city code and ordinances, land-use guidelines, the character of the area, appropriate use of the property in question, and real, immediate impact on the area in question. Having served three years on the Planning Commission prior to the Governing Body, it was a rare event to have a project proposed - residential or commercial - that did not generate opposition of some kind. This was a standard occurrence, and I was always careful to judge proposals based on the facts and likely, immediate impact - not just speculation on what may happen 10, 20, or 30 years later.
I approached this with an open mind and arrived at a decision I thought was best for our city overall - for the residents, businesses, and future growth. I do not believe there was evidence of any immediate harship or suffocating impact on the surrounding residences that would justify denying the property owner of his rights to sell his own property and denying the buyer of the rights to develop the property in accordance with our land-use guidelines. Furthermore, as a community, we must be willing to provide variety and diversity of housing to attract and retain residents of all ages and demographics, providing a vibrant community and a broad tax base, protecting our seniors, and ensuring we do not need to raise taxes in the future on those who can least afford them, as a response to continued growth.

I am discouraged when I read a Kansas City Business Journal headline that reads "Shawnee rejects $35 million apartment project" and I hear anecdotal evidence that developers may be apprehensive about investing in our city due to perceptions that we are not business-friendly and open to new development. I hope that sentiment is not widespread and that we can overcome that during the course of this year.
Finally, I'm pleased and encouraged that we all care so passionately for our city and I believe we all have Shawnee's best interests at heart. I will continue to work with residents, businesses, and interested developers on bringing economic development to our city and improving traffic issues where they exist to ensure we retain a high quality of life. We must remain an economically competitive location for development and an attractive residential option for KC transplants, seniors, retirees, young professionals, and young families seeking maintenance-provided housing alternatives that are now available around us and across state lines.

Next Issue

Watch for Part II in your inboxes in just a few days - I'll include updates on the Mayor's upcoming State of the City address, news on action taken to reduce odors from the landfill, and the city's resolution to the loud train horns that have plagued residents in the western part of the city.

Stay tuned!

  About Brandon

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Upcoming Events

Royal Ball - Daddy/Daughter Date Night - Civic Centre
City Council Meeting - City Hall, 7:30 pm
State of the City Address by Mayor Distler
- Old Town Hall, 11:30 am
TAKE Defense Course - CivicCentre,
10:00 am
New Businesses
Congratulations to the following businesses that have have recently opened in Shawnee. Welcome!

Brandon Kenig
Councilmember - Ward IV
City of Shawnee

Copyright © 2016 Brandon Kenig for Shawnee City Council, All rights reserved.

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