Meeting on Bluffton development fees ends without agreement

A three-and-a-half-hour negotiation between the town of Bluffton and a Kansas bank that foreclosed on the Village at Verdier, a residential and commercial project on S.C. 170, ended without agreement Wednesday on the bank's outstanding debts to the town.

Officials from the Security Bank of Kansas City, who are developing the 125-acre property, owe the town $184,000 in payments dating back to December 2008. That's because the area is in a tax increment finance district, in which the developers get special concessions from the town in exchange for annual administrative fees and fees in lieu of taxes.

Bank officials asked the town's Negotiating Committee to reduce that amount to $114,000 in exchange for a donation of three acres for the S.C. 170 widening project and other concessions.

The committee, however, held firm to the $184,000 amount outlined in the agreement with the original developer when the project was first negotiated in 2002.

The bank says the amount should be reduced because there has not been significant development on the property which would require the services the town provides in exchange for the fee.

"Our position is that the reason the fee in lieu began five years ... was because it was the intent of all parties that there would be significant if not complete development on the property," said Matt Rowe, the local representative of the Security Bank of Kansas City. "But we find ourselves at the same place when the original development was planned."

The committee offered to charge fees based on building activity rather than a flat yearly fee as development picks up, but only after the bank pays what the town says it owes.

"Other developers are not developing because of the economy so we just can't continue to go in to arrears," said committee chairman and mayor pro-tem Fred Hamilton. "This developer has some new life and has the ability to pay because they do have some activities that are coming on board."

To date, 20 residential units have been constructed on the property, two of which have been sold. There has not been any significant commercial development.

In exchange for reducing the amount owed, the bank also was prepared to agree to adhere to strict environmental standards where the property borders the Okatie Regional Park. It agreed to the town's request for 30,000 square feet of civic space and a public access trail to the park.

Th bank asked to use $50,000 set aside in an escrow fund for a traffic light as credit in paying off the debt and said they could write the check for the remainder as soon as today.

Both parties must come to an agreement onoutstanding fees before the bank can amend its plan for the property. The latest version includes more commercial development and less residential development than originally outlined.

The town's Growth Management staff and planning commission have recommended the bank clearly define public spaces and street networks in the Village at Verdier and include a road parallel to S.C. 170 to reduce traffic before town council approves the new plan.