Mission Issues Gateway Developer Notice of Default for Failure to Pay Taxes

In mid-April, the City learned that Metropolitan Commercial Bank filed an action to foreclose its mortgage on the Mission Gateway Project property owned by Aryeh Realty, LLC (“Aryeh”). The City is not a party to the action, and, as previously communicated by City Administrator Laura Smith, “The City has and will continue to monitor the situation to determine appropriate actions which serve to protect the interests of the City in relationship to the Gateway Project.”

Under the new Redevelopment Agreement approved in January 2023, as well as all previous agreements, timely payment of real estate taxes and special assessments has been required in connection with the Project. The foreclosure action does not negate any current or future taxes or special assessments owed to the City or any other taxing entity.

Aryeh’s second installment of its 2022 tax payment was due on May 12, 2023. Yet despite its obligation to pay taxes due and owing and notwithstanding the specific requirement in the Redevelopment Agreement that it promptly pay, Aryeh has not paid its $447,944 bill.

As a result, on May 15th, the City provided Aryeh with a “Notice of Default, Demand and Notice to Cure” related to its non-payment of the taxes. Pursuant to the terms of the Redevelopment Agreement, Aryeh has sixty days from receipt of the notice to cure this default by making full payment of the taxes and assessments. The City has no intent to waive this or any other default under the Development Agreement.

Should Aryeh fail to pay the taxes and assessments within the sixty-day timeframe, the City can and will exercise all rights and remedies it has under the terms of the Development Agreement. This includes, without limitation, termination of the Development Agreement.

Mayor Flora asked the developer to attend a City Council work session at 6:30 pm on Wednesday, May 24th to provide an update to the Council on the current situation surrounding the Mission Gateway project, including the non-payment of taxes. Unfortunately, Aryeh’s attorney has communicated to the City that the developer will not be participating in the May 24th work session.

Mayor Sollie Flora has cancelled the work session commenting, “I cannot even begin to adequately convey my level of frustration with the developer’s failure to pay what our City is owed or its decision not to attend the meeting this week. We expended tremendous effort last year working to negotiate an agreement which would give the developer the greatest chance of successfully completing the Gateway Project. To be advised of the foreclosure petition with no notice of the allegations therein and now to be told the developer will not even appear at a public meeting to account is beyond the pale.”

Aryeh has given no indication to the City of whether it intends to cure the event of default by making the outstanding tax payment. “This past winter, the developer’s team stood in front of us and told us they were ready to go and could absolutely build this project. Yet five months later the developer has yet to show evidence that it has finalized its funding or that it is ready to proceed in a timely fashion. The developer’s blatant and continued disregard for the negative impact its handling of the Gateway site has had on our City’s reputation for more than 15 years shows an utter lack of care and is entirely unacceptable,” said Mayor Flora. “At a minimum the developer owes the Governing Body and this community a clear explanation of its failure to pay what Mission is owed. The developer needs to make good on its promises and promptly right the Gateway Project or move on.”

Regrettably, because the Mission Gateway site is privately owned by Aryeh, the City’s options to force action on the site are limited. “I know there are many residents and business who would like to see the City take over the property,” said Flora. “Unfortunately, there is not a viable path for the City to do so.” The Mayor went on to comment that, “The clock is running on the January 2023 Development Agreement and all of its included timelines. I can assure you that I will personally be unwilling to recommend or support any extensions or reconsiderations. We’ve been more than reasonable and understanding over the years and it is now up to Aryeh to keep its end of the bargain. We’re well past the time for excuses from the developer.”

Any questions related to the Mission Gateway Project should be directed to Mission’s City Administrator Laura Smith at 913.676.8352 or lsmith@missionks.org.

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If you would like to be notified when a meeting related to the Gateway project is coming up, please complete the form below. Visit the Current Projects page for more information on the Gateway as well as the rest of the development projects happening in Mission.