Developer moves on KC project as SPS waits

Developer Paul Larino is pressing forward on a $26 million Kansas City area development despite missing three payment deadlines for his purchase of Springfield’s former Hickory Hills school.

On news of an April 23 groundbreaking in Grain Valley east of Kansas City for Larino’s 24-acre development, Springfield Public Schools Board of Education officials said last week they were frustrated. The groundbreaking came 10 days after Larino was scheduled to remit $2.5 million to the district – a lump sum payment that board members agreed days earlier to extend for another five months. It was Larino’s third extension granted by the school district since he agreed in 2010 to buy the former elementary school for $4.45 million. As of April 12, Larino had paid the district $125,000, according to SPS spokeswoman Teresa Bledsoe.

“The entire board has been frustrated with this,” school board President Tom Prater said. “But we realize – and we confirmed this with our vote to extend his contract – that this is still our best alternative. The last thing the board wants is to be saddled with this property several more years.”

The new deal with Larino, who has plans for a commercial development but has yet to demolish the school building at Chestnut Expressway and U.S. Highway 65, enacts a condition that he pay a $12,500 monthly premium until the lump-sum payment comes through. He has since made one $12,500 monthly premium payment that is not applied to the purchase price, district officials said.

In Grain Valley, City Administrator Alexa Barton said she was unaware of Larino’s tarnished payment history with the Springfield school district, and she’s not concerned about the development moving forward in her city.

“I know that he had other developments, and I know that he had a background check done when he came to the city about three or four years ago and everything came out fine,” Barton said. “I consider those two separate investments that he has, and everything from our end has been positive with Paul.”

Traction in K.C.
The recent groundbreaking ceremony was attended by Larino, his real estate agent, Todd Chambers, and Grain Valley officials. Through Larino’s S.G. Property Management, construction is beginning on an eight-screen theater and a 50,000-square-foot retail center.

“B&B Theatres is going to be one of the tenants there, and we are going to have some additional retail we are going to build,” Larino said. “We also have some land contracts with some of the out-lots with some different restaurant users.”

He said much of the project is being funded by Blue Ridge Bank & Trust with the rest of the money coming from tax increment financing and a neighborhood improvement district established by city leaders. The project, at the northwest corner of Interstate 70 and Buckner-Tarsney Road, is tied to $18 million of infrastructure for which the city and the Missouri Department of Transportation have been collaborating.

Chambers, of Springfield-based Chambers Real Estate Services LLC, who is marketing Grain Valley Marketplace and Hickory Hills Marketplace for Larino, said the theater property should be completed by the end of the year, with construction on the retail center to follow. Chambers, who has been pushing the Grain Valley project for about eight months, said a regional convenience store and a national fast-food chain have signed letters of intent.

Barton said public financing for the development was approved in 2010, and the project has been delayed because the city has been performing some road widening. She said the development also stalled as road improvements with MoDOT were altered to work in concert with Larino’s plans.

School troubles
Prater said the board was divided on whether to approve the most recent extension to Larino. Three of seven board members – Kris Callen, Denise Fredrick and Andy Hosmer – voted against approving the extension on payments.

Board Vice President Callen said she was aware of the Grain Valley project when she voted against extending Larino’s lump sum payment.

“I was aware that the projects have started at fairly similar times and the timeline here had taken longer. And there is some frustration here, yes,” Callen said. “I wanted him to have to pay more than $12,500 per month to extend the contract.”

She said she knows Larino has had financing issues for Hickory Hills Marketplace and cited slow funding through the county-administered neighborhood improvement district.

Through the community improvement district, Larino is in line for up to $6.5 million to fund infrastructure work.

Though discouraged, Prater said he feels continuing the sale of the school is in the best interest of taxpayers.

“We are willing sellers, but in order to make the funding work, he has to have agreements with the city, the county, the Missouri Department of Transportation and with two adjacent landowners. I think fitting all of those pieces of the puzzle together, along with some of the bonding district that needed to be created and the issuance of Neighborhood Improvement District bonds, has just made it a complicated process,” Prater said.

Larino’s Hickory Hills development plan was part of the impetus behind an $8 million road improvement project that kicked off in mid-April and is bringing Springfield’s third diverging diamond interchange to town.

Similar to the Kansas City area project, Larino has said he is working with local and state officials to ensure he is doing his part to make surrounding infrastructure fit well with his project.

“You have multiple government agencies, multiple property owners – it’s just a complex project. As with most commercial developments, there are just a lot of issues to work through. You just got to take one bite at a time and keep working through it,” Larino said.

In January, an official with Eau Claire, Wis.-based home-improvements chain Menards said the company would commit as anchor tenant at the Hickory Hills Marketplace retail center, provided its 16-acre lot could be excluded from the CID Larino worked to establish to help fund the project. Council approved the action, hoping to forward the project.

Chambers said marketing the property continues, but traction has been slow going. He declined to name any potential tenants.

“It’s a process where the interest level builds as the project gets closer to demolition of the existing school building. It’s just a slow and steady process,” Chambers said.[[In-content Ad]]