ELLY GRIMM
• Leader & Times
Discussions to bring a Dairy Queen restaurant to Liberal have been going on for multiple months, and a major part of those discussions has centered on incentives for the developer.
At the Liberal City Commission’s first regular meeting this month, the commission directed Liberal City Manager Scarlette Diseker to start negotiations with the developers, which have been ongoing since then. Diseker provided some updates to the commission at a special meetinG Tuesday afternoon.
“There are 11 major incentive requests with this project, starting with the Neighborhood Revitalization Program, and the commission is willing to support and fund costs associated with the issuance and administration of the NRP, but that cost estimate is still being worked out. With the Community Improvement District (CID), the commission is in favor of establishing the CID for this development like with other projects. There would also be a cap of $350,000 in Infrastructure Assistance repayable through CID-generated revenue at 2 percent until the full amount has been recouped, and we estimate that will take about five years to be funded through the 1-cent sales tax. The commission is also agreeable to supporting the pursuit of Industrial Revenue Bond incentives. With the Façade Grant, even though those were originally meant to support revitalization of existing businesses, the commission is agreeable to offering this $10,000 benefit through the 1-cent sales tax. The $3,000 New Business Incubator Grant will also be in play, as will the Site Plan Review Fee since in July 2024, the commission approved a full waiver of those, which were $2,086. The commission will also support waiving costs associated with water and tap meter installation plus labor and will also relocate the fire hydrant from Sam's Packer Supply to the project site, and that cost is $10,000.”
However, there were a few things that will not be covered by the city, Diseker said.
“We did not agree to the Gilmore & Bell fee coverage since the previous term sheet showed the attorney fees were the responsibility of the developer. Building permit fees will also not be covered because building permit fees are budgeted to the General Fund and with the amount being $6,000, the commission won’t waive that. The application costs will also not be covered since the previous term sheet again showed the attorney fees were the responsibility of the developer.”
Diseker and the commission then went into more detail about some additional requests that had been put forth.
“With the CID structure, the commission is being asked to consider a 1.5 percent/0.5 percent split between the City of Liberal and the developer until the city has recouped its infrastructure contribution, after which the full 2 percent could remain with the city,” Liberal Mayor Jose Lara said.
“I don’t have any major problems with that,” Commissioner Jeff Parsons said. “I know there will be some time before we’re fully repaid, but I think that would work for us. That also leaves some room if we have to negotiate some things in the future.”
The commission then continued to work through the list of extra requests.
“With the infrastructure definition the city is being asked to formally adopt the Kansas CID Act standard for what qualifies as reimbursable infrastructure, and that goes along with payment flow because we’re also being asked to clarify whether infrastructure reimbursements will be paid directly to vendors/contractors or reimbursed to the developer, and that a defined invoicing/approval process be put in place,” Diseker said.
“With RHIDs, how much do we allow the developer to weigh in on things like that?” Lara said.
“I think when city funds are being utilized or being request, we should have the most important opinion at the table,” Diseker replied. “I want to be sure we protect our interests as much as possible. That RHID standard would definitely work.”
Floodplain clarification was also among the discussions.
“We’re being asked to take responsibility for moving the project out of the flood plain zone, including all associated dirt work and to allocate this work based on the top three qualified quotes and handle it as a reimbursable expense separate from the $350,000 prepaid CID allocation,” Lara said.
“I believe that’s actually a FEMA rule,” Assistant City Manager Brad Beer said. “And there’s a lot of work that would need to go into making changes with all of that.”
“Shouldn’t that have been calculated in the costs of building the facility?” Commissioner Ron Warren asked.
Among the requests was for the city to commit to prioritizing and expediting permitting, site plan reviews, and inspections in order to reduce development delays and for collaboration with the Convention and Visitors Bureau to promote the Dairy Queen location as part of local visitor and tourism marketing campaigns.
Some collaboration with the Kansas Department of Transportation (KDOT) was also among the requests
“If KDOT or other agencies require frontage road, roadway, or street lighting improvements, the city is being asked to commit to funding and maintaining those improvements as part of its long-term obligations,” Lara said. “If the developer is required to initially build any such improvements, the developer shall retain the name, image, and likeness rights of the roadway, while the City will assume ongoing maintenance responsibilities. These costs should not be tied to, or deducted from, the $350,000 prepaid CID infrastructure allocation.”
Schedules and timelines for reimbursements were also among the requests, as well as contingency costs and maintenance.
“We are being asked to agree to cover any unforeseen public improvement costs tied to outside agency requirements (e.g., KDHE stormwater compliance, ADA access) that are not contemplated within the $350,000 allocation,” Lara said. “We are also being asked to provide quarterly accounting of CID revenue and reimbursements so both parties can track progress toward recoupment.”
“That’s something we already have planned, and we wouldn’t really make any changes in terms of the frequency of those reports,” Diseker said.
Concluding the requests was termination/default language, which allows – if the city fails to meet specific obligations (e.g., flood plain dirt work, permitting commitments) – the developer reserves the right to restructure the CID split or renegotiate reimbursement terms. Further discussion on these requests will come before the commission at future meetings.
