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Indianola council approves mutual termination of Kentucky Ridge development agreement
Summary
Council approved a resolution terminating the development agreement with Inception Group LLC for the Kentucky Ridge project after the landowner elected to forfeit TIF due to a financing gap; the termination includes a $10,000 payment to the city for legal costs and means the city will forgo a $375,000 benchmark grant reimbursement.
The Indianola City Council on March 23 approved a mutual termination of the development agreement with Inception Group LLC for the Kentucky Ridge urban-renewal project.
City staff described the background: a 2024 urban-renewal plan and development agreement were approved and in 2025 significant on-site infrastructure was installed. A national grocery chain expressed interest in part of the site, which prompted renegotiation of the development agreement to reflect a reduced commercial footprint. Staff and the city’s financial analyst determined the amended deal would not cash-flow as originally structured because the grocery’s committed assessed value was below the level the amended agreement required.
Faced with a material financing gap that included traffic-signal costs and developer incentive exposure, staff said the landowner chose to forfeit the tax-increment financing benefit (TIF) and requested a mutual termination to allow the property sale to proceed to the grocery chain. The termination terms submitted to council included a $10,000 check from the landowner to reimburse the city’s legal expenses and the county assessor’s agreement to remove a previously recorded $10,000,000 minimum-assessment requirement.
Staff reported the fiscal impacts: the city will forego reimbursement of a $375,000 benchmark grant (previously used for on-site stormwater work) while the landowner will forfeit about $462,000 in future TIF. Council discussed whether future purchasers could generate taxable value to recover foregone revenue; staff said future development could yield new increment but emphasized the city’s current choice to accept termination and proceed with infrastructure acceptance and final plat steps as next items.
Council voted by roll call to approve the mutual termination resolution. The resolution allows the landowner to sell to the interested grocer and moves remaining administrative items (infrastructure acceptance, final plat, potential new agreement with the grocer for a traffic signal) to subsequent staff steps.
