Corbin Park Retail Center in Kansas City Emerges From Limbo
By KEVIN COLLISON
The Kansas City Star
August 16, 2012
The 96-acre Corbin Park retail development has emerged from its unfinished, bankrupt cocoon at one of Overland Park’s busiest intersections, polished and ready to go after tenants.
Since taking possession of the forlorn project in December, developer Mike Schlup has spent $7 million completing 200,000 square feet of retail buildings, paving interior roads and planting extensive landscaping during this summer’s awful drought. His water bill is $8,000 a month.
Von Maur and J.C. Penney were the only two stores open at Corbin Park at 135th Street and Metcalf Avenue when the previous developer filed for bankruptcy in January 2010. For more than two years, the big retailers shared the sprawling hillside site with raw dirt and partly built structures open to the weather.
J.C. Penney didn’t even have a road leading to its main entrance.
“It was like somebody went to lunch and never came back,” Schlup said Thursday.
He was seated on a bench in the courtyard of Corbin Park by a grassy area where visitors may gather soon for outdoor concerts. Around him, the retail buildings, designed in a comfortably contemporary style of brick and stone, were ready for occupants. The fountains were flowing and the flowers blooming.
Freshly paved concrete led to the J.C. Penney entrance, and Von Maur was preparing to open for a day of shopping. Down the slope not far away, traffic zipped by on 135th Street.
“I’ve always believed in the project itself,” Schlup said. “It’s a prime piece of real estate.”
Obtaining the property was a marathon by itself.
A group led by Bank of America had committed to lend $107.4 million, and $25 million was spent before the previous developer, Omaha-based Corbin Park LP, stopped work in 2009.
Schlup reached an agreement to buy the project from its creditors for $14 million in July 2011 but withdrew his offer a month later. At the time he was concerned that the transfer of a critical incentive, a 1-cent sales tax to fund the public infrastructure, would not be approved in time by Overland Park officials.
But in October 2011, when the bankruptcy court auctioned Corbin Park, Schlup tried again. This time his successful bid was $8.1 million, $6 million less than what he offered a few months before.
Although other developers, including some of the area’s biggest players, such as RED Development, passed on the project while it was in bankruptcy, Schlup said he was willing to take on the risk because of his background. He owns Carson Development Inc., a full-service commercial builder.
“I’ve always been good at that. I can look at something and tell you within 5 percent what it will cost to complete,” he said. “That’s what I brought to the auction. I know construction.”
In April, the Overland Park City Council reassigned the incentive, called a transportation development district, to Schlup. The agreement calls for the 1-cent sales tax to begin being collected in October 2015. The development district will provide a maximum of $30 million to reimburse the public infrastructure costs, which include land acquisition, interior, sewers and parking.
City Manager Bill Ebel said the council attached strict requirements to the reassignment, including deadlines for completing the retail structures and building a “corner feature” at 135th and Metcalf intended to welcome people to the project.
Schlup said he is planning a $250,000 fountain at the location that should be finished by the end of this year.
“The city was very helpful,” he said. “The reason the project is as far along as it is, is because of the staff, city manager and mayor. They could have delayed this a year.”
Besides obtaining city permission, Schlup had to persuade Von Maur and J.C. Penney to cooperate with his plan. Both stores own their buildings, and Von Maur had a big say in how the project would move forward, including a requirement that 135,000 square feet of the additional shops be occupied by upscale retailers.
Von Maur also vetoed Schlup’s original idea to rename the project Aspen Square, preferring it remain Corbin Park.
Eventually, Schlup said, the big anchor tenants agreed to a new timetable for completion and accepted his plan.
“It was in their best interest,” he said.
Bob Larson of Von Maur said his store is “more than happy” with the progress since Schlup took over the development.
“It’s made a huge difference already, and we’re excited about the tenant mix he is planning to deliver,” Larson said. “We are very pleased with the increases in sales and traffic we’re seeing, and as a property owner in this center, we’re here to stay.”
Since taking over, Schlup hired Copaken Brooks to help him obtain the necessary permissions from City Hall and to solicit potential tenants.
The only new tenant announced to date is Sprouts Farmers Market, an upscale grocer. It has agreed to occupy 24,000 square feet in the northwest corner of the development.
The tenants being pursued for the core space now completed between Von Maur and J.C. Penney are categorized as boutiques, restaurants, specialty shops and home furnishing stores.
But to make Corbin Park more attractive in what remains a challenging retail development market, Schlup and his advisers at Copaken Brooks think the next phase of the project needs to be built.
That phase calls for several 35,000-square-foot retail buildings geared for “junior box” retailers to be built on the east side of the development.
“It’s the junior boxes that are most active now,” Copaken said. “Leasing them will validate the corner and facilitate the leasing of the core space.”
Schlup said he wants to begin construction on the junior-box phase, which would total 132,000 square feet, before the end of the year and have it ready for occupancy in January 2014.
A year from now, the developer hopes to have half the existing buildings dedicated to smaller stores and restaurants occupied, and the second phase well under way.
“I think it’s still a tough environment, but I believe we have a superior product,” he said.