After years without a grocery store in the city limits, Merriam could soon have two different options for groceries.
Though the exact timeline is unclear, a new Aldi is coming to Merriam Town Center. It will replace OfficeMax, which started the process of closing down earlier this month.
The new grocery store comes alongside other planned improvements to the shopping center near Johnson Drive and Interstate 35, including a refresh of existing buildings, new retail buildings for future tenants and general improvements to the district.
The new Aldi will be less than a mile away from a new Trader Joe’s expected to open sometime this year at the site of the former Antioch Library branch as part of a $102 million redevelopment effort on the northwest corner of Antioch Road and Shawnee Mission Parkway.
The Merriam City Council sealed the deal on the new Aldi and potential future changes for the shopping center on Monday with a series of votes that set up a special incentive sales tax district and promised $32 million in revenue bonds, among other things.
“I just think this is a really great get,” said Councilmember Reuben Cozmyer. “For a city that’s been wanting a grocery store for a long time, we’ve got two really great options that I think both together are going to serve every single member of our community.”
Merriam Town Center Aldi to be the largest in KC area
The closing OfficeMax store in Merriam will be replaced with an Aldi. Photo credit Lucie Krisman.
The new Aldi grocery store, which is expected to come ahead of subsequent improvements at Merriam Town Center, will fill the 24,000-square-foot space being vacated by OfficeMax.
Bob Johnson, who owns Merriam Town Center through his firm The RH Johnson Company, told the city council on Monday that it would be the largest Aldi store in the Kansas City metropolitan area.
Aldi’s website lists 10 current grocery store locations in Johnson County and two dozen across the bi-state metro area.
Converting the old OfficeMax space into a grocery store is going to take a lot of work, Johnson said, costing an estimated $5.1 million.
The exact opening date is unclear, but Johnson has one year to begin renovating the space and must be done with that work within three years, according to the development agreement.
Merriam Town Center upgrades to cost $31M overall
The RH Johnson Company acquired Merriam Town Center a few years ago and has so far invested more than $50 million into the property with the initial purchase and subsequent improvements.
Now, the company is looking to invest another roughly $31.1 million into a refresh of the retail district, including the new Aldi.
One of the bigger changes to the shopping center will be new retail buildings in line with the existing strip of retail spaces and in the out parcels currently taken up by mostly unused parking facing Ross Dress For Less and Bob’s Discount Furniture, where a Hen House used to be before closing in 2018.
All told, that’s 55,000 square feet of new construction across four buildings, expected to cost just shy of $12 million to develop, that could bring new dining and shopping options to the district.
Additionally, Johnson said his firm intends to do general site improvements, like upgrading the exteriors of the existing retail buildings, adding more green space, refreshing landscaping and improving the walkability of the site with new pedestrian connections.
He also wants to add electric vehicle charging stations, a new covered bus stop for public transit and new wayfinding signage to direct traffic.
City council established incentives for Merriam Town Center
File photo.
To help cover the cost of the development, Merriam has formed a special incentive sales tax through a Community Improvement District. That will impose a 1% sales tax applied on top of government sales taxes on all purchases made at Merriam Town Center, aside from those at the new grocery store, which will be exempt.
In a CID, revenues are paid to a developer or other third party for a predetermined period — in this case, 22 years — within a defined area to reimburse eligible development expenses as an economic development incentive tool.
The maximum reimbursement from the Merriam Town Center CID is $6.9 million. That money will only be paid out if the work is completed according to the terms in the development agreement and if the sales tax generates revenue.
(The Home Depot, IHOP and Chili’s Grill & Bar in the Merriam Town Center area will also be exempt from the CID sales tax, though the CID will be applied to the McDonald’s, Taco Bell and the businesses in the strip of retail buildings that contain Jimmy John’s across Johnson Drive.)
On Monday, the city council approved four items related to the incentives for the Merriam Town Center grocery store and refresh.
“I’m really excited to hear about this Aldi. I think this gives our residents an even greater selection of grocery options in our community, and I think that can only benefit them,” Councilmember Jason Silvers said.
The first vote, which passed 7-1, formalized the development agreement, laid out the terms of the CID and bonds for the city and the developer. A subsequent vote that also passed 7-1 established the CID.
The city council then voted unanimously to register the city’s intent to issue no more than $32 million in industrial revenue bonds for the financing of the project. The bonds will also deliver an estimated $3 million in sales tax exemptions on construction materials.
That was followed by a second unanimous vote that was more procedural, creating a dedicated CID fund to hold revenues generated by incentive sales taxes before it is delivered to developers as reimbursement.
Councilmember Bruce Kaldahl voted against the first two measures, skeptical that the market could support two grocery stores in Merriam and that the city should incentivize that, but he voted in favor of the last two actions.
Though Merriam Town Center was originally built more than 20 years ago with the assistance of a tax increment financing, or TIF, district, the clock on that public financing tool has run out. That means the CID and bonds will be the only incentives active for the district.
Next steps:
The Merriam Town Center CID will officially take effect on Oct. 1, and it will last for 22 years.
Down the line, the city council will need to consider supplemental resolutions for each tranche of the combined $32 million in bonds to be issued for individual phases of the Merriam Town Center refresh project.
Keep reading: Merriam residents went years without their own grocery. They may soon have 2 stores to choose from