The origin of this post started when close friends asked if the recent Overland Park property tax increase (46%) had anything to do with bond obligations and more specifically the result of Corbin Park bankruptcy and exposure to Overland Park General Funds. After a few weeks of investigations I can say with a high degree of certainty, that although Transportation Development Districts were created (actually 3 TDD’s) no bonds were actually sold and The City has no exposure. But that conclusion started a much larger search and more questions.
The first indication of a TDD at 135th and Metcalf was a ‘Consent Agenda’ item on May 3, 2004 and approved by the Overland Park City Council. The Developer was identified as Cormac. http://apps.opkansas.org/City-Government/Agendas-and-Minutes/City-Council/Agendas/2004/2004-05-03/agenda.html
“Cormac Company is a diversified, commercial real estate company specializing in the development of land, shopping centers, multifamily, and single family projects.” http://www.cormaccompany.com/ in Omaha, Ne.
The first mention in Overland Park documents of forming a Transportation Development District for Corbin Park occured on March 21, 2005 with Resolution No. 3447 http://apps.opkansas.org/City-Government/Agendas-and-Minutes/City-Council/Agendas/2005/2005-03-21/FAR-C1-2.PDF Note the named companies.
June 2, 2008 The City of Overland Park approved Ordinance No. TDD-2753 to create the first Transportation Development District http://apps.opkansas.org/City-Government/Agendas-and-Minutes/City-Council/Minutes/2008/20080602CO.pdf
The 1% TDD Tax was collected in the district from July 1, 2009 through September 31, 2009.
Ordinance TDD-2753 http://apps.opkansas.org/City-Government/Agendas-and-Minutes/City-Council/Agendas/2008/2008-06-02/PUB-1-1.PDF established the maximum limit at $30,000,000 which was less than the Developer had estimated as of January 24, 2008
The Kansas Secretary of State’s Office shows Corbin Park L.P. at 17110 Marcy Street, Suite #1, Omaha, Ne. 68118 (same address as Cormac) was formed as a Foreign Limited Partnership on September 8, 2008 with Delaware as the State of Organization. Current information shows the absence of a “Resident Agent” or “Registered Office” in Kansas.
Also on September 8, 2008 The City of Overland Park passed Resolution No. 3698 http://apps.opkansas.org/City-Government/Agendas-and-Minutes/City-Council/Agendas/2008/2008-09-08/FAR-S4-1.pdf
But where is Corbin Park L.P. on the actual ‘Development Agreement’? http://apps.opkansas.org/City-Government/Agendas-and-Minutes/City-Council/Agendas/2008/2008-09-08/FAR-S4-2.pdf
The Developer (identified again as Corbin Park) secures a $107,400,000 Construction Loan from Bank of America on October 7, 2008. Page 3/71 on court document http://apps.opkansas.org/City-Government/Agendas-and-Minutes/Finance-Administration-and-Economic-Development/Agendas/2011/2011-07-20/DIS-1-3.pdf
On May 4, 2009 the Developer requested a delay in collecting the 1% TDD Tax. http://apps.opkansas.org/City-Government/Agendas-and-Minutes/Finance-Administration-and-Economic-Development/Agendas/2009/2009-05-20/ACT-2.pdf
On June 1, 2009 TDD-2753 was replaced by TDD-2815 delaying the TDD Tax until October 1, 2010. http://apps.opkansas.org/City-Government/Agendas-and-Minutes/Finance-Administration-and-Economic-Development/Agendas/2009/2009-05-20/ACT-2-1.pdf
Also on June 1, 2009 the Developer submits request with documentation to justify $22,439,790.80 reimbursement for improvements made to date as per the September 8, 2008 Agreement. Funding to be provided by sale of TDD Bonds.
Overland Park certified TDD-2815 with the State Director of Taxation on June 11, 2009.
July 21, 2009 the Developer/Debtor/Corbin Park is notified by Bank of America (lender) of default under the Loan Agreement. Page 4/71 Court Document http://apps.opkansas.org/City-Government/Agendas-and-Minutes/Finance-Administration-and-Economic-Development/Agendas/2011/2011-07-20/DIS-1-3.pdf
Later it was reported http://www.bizjournals.com/kansascity/stories/2010/01/11/story1.html the default was based on the property value in 2009 was $20,000,000 less than the value established ONE YEAR earlier when the loan was approved. “ The lower value caused the developers to breach a loan-to-value covenant, prompting the syndicate to reduce its construction financing commitment from $107.4 million to about $80 million, sources said. When the developer did not fill the resulting equity gap of about $25 million, the banks stopped payment on the loan at $26 million.”
With knowledge of the default on the street and unpaid invoices, contractors and sub-contractors began filing “mechanics’ liens” against the property. This amounted to around $26,000,000 in liens against the property. However Corbin Park had purchased “Performance Bond” insurance from The Fidelity & Deposit Company of Maryland prior to the development. In similar rulings by U.S. District Court Judge Kathryn Vratil on March 29, 2011 the liens were dismissed leaving Bank of America the sole debtor. https://ecf.ksd.uscourts.gov/cgi-bin/show_public_doc?2010cv2375-206
January 5, 2010 Corbin Park files for bankruptcy and the court determines that at the time of default, the balance owed Bank of America was $22,563,761.42. Page 4/71 Court Document http://apps.opkansas.org/City-Government/Agendas-and-Minutes/Finance-Administration-and-Economic-Development/Agendas/2011/2011-07-20/DIS-1-3.pdf
July 21, 2011 document submitted to the court http://apps.opkansas.org/City-Government/Agendas-and-Minutes/Finance-Administration-and-Economic-Development/Agendas/2011/2011-07-20/DIS-1-3.pdf (page 6/71) recommends Aspen Square, Inc as the buyer out of bankruptcy.
July 20, 2011 Overland Park considers Aspen Square, Inc request http://apps.opkansas.org/City-Government/Agendas-and-Minutes/Finance-Administration-and-Economic-Development/Agendas/2011/2011-07-20/DIS-1-1.pdf
On August 1, 2011 Overland Park City Council discussed the Aspen Park request for TDD transfer in executive session.http://apps.opkansas.org/City-Government/Agendas-and-Minutes/City-Council/Action-Summaries/2011/20110801COAC.pdf
August 1, 2011 was also the date for the Public Hearing on the Overland Park 2012 Budget. The executive session was conducted after public comments regarding the 2012 Budget. There has been no further documented activity by The City of Overland Park regarding Corbin Park or Aspen Square since August 1, 2011.
There has not been any available information confirming or denying the sale of Corbin Park to Aspen Square or others.
Only the diligent readers of NOlathe are still here with some questions:
- Why would a developer owed $22,356,304 in acknowledged Bond money so willingly submit to a default judgement of $22,563,761?
- Why do the Court records show the TDD improvements value at $11,500,000 when previously documented at $22,356,304?
- Why did it take eleven months (June 2009- May 2010) for The City of Overland Park to approve re-imbursements created by a September 2008 Agreement?
- Could Aspen Square, Inc walk away with $8,356,304 cash in pocket for a $22,563,761 debt and 96 acres of Retail Property?
- Who and how owns this property next?
I leave these questions with those that may have a vested or ethical interest in Corbin Park.
After hundreds of hours and some money, at this time I find no fault with The City of Overland Park. But something seriously stinks at 135th and Metcalf. All Overland Park Staff responded to my requests with the utmost respect and courtesy. Special appreciation to Tammy Owens.