Shawnee Parkway Plaza has moved one step closer to redevelopment.

At its Monday night meeting, the Shawnee City Council unanimously approved an ordinance that establishes a tax increment financing district — the first of its kind in Shawnee. The district encompasses the struggling shopping center at Shawnee Mission Parkway and Pflumm Road. Bank Midwest, which is also in the southeast corner of the intersection, is not included in the district.

Shawnee City Manager Carol Gonzales said the TIF would use increases in tax revenue generated by the redevelopment project to reimburse developers for certain project costs. This additional tax revenue will include any increase to property tax and additional sales taxes generated. The TIF will reimburse developers up to $3.25 million.

Councilmember Michael Sandifer said even though he does not like TIF districts, many other cities in Johnson County use them.

“They are a tool we have to use to stay competitive,” he said.

Prior to the vote, the council heard from Shawnee residents who were concerned a TIF district was not the best way to bring development to the city.

Mike Chapman, one of the five Shawnee residents who spoke against the TIF, thought other vacant sites around the city should be developed first and that the TIF district was unfair to existing businesses.

“Local businesses will be adversely affected as sales gravitate to new stores from existing stores,” Chapman said.

He said that because Shawnee already has a Home Depot, a new Nuts and Bolts Hardware, one of the planned tenants of the redeveloped shopping center, would not generate any additional tax revenue.

Councilmember Dawn Kuhn said she disagreed because the redevelopment would offer residents additional retail and dining options. She said the additional hardware store could bring shoppers from other cities.

“Nuts and Bolts is not the same type of business as Lowe’s or Home Depot,” Kuhn said. “People in cities without a Nuts and Bolts will come here to look.”

Gonzales said the city has been working with Christie Development Associates, LLC on the project. She said Nuts and Bolts hardware has committed to opening a store in the redeveloped Shawnee Parkway Plaza, along with other tenants.

In addition to the TIF, a $3.75 million transportation development district, a similar development tool, has been proposed. That development district would add a 1 cent sales tax at the shopping center to pay for realigning Midland Drive and the construction of a traffic light. As part of the redevelopment Midland Drive, a frontage road for Shawnee Mission Parkway, will move further south to make room for additional storefronts, Gonzales said. A traffic light will be placed at Noland Road and Shawnee Mission Parkway to aid any increase in traffic to the shopping center.

At its Jan. 28 meeting, the council will consider scheduling a public hearing for the project.

Also during the meeting, the council approved a cereal malt beverage license for Fogones Mexican Delight at 11200 Johnson Drive.

The council also approved bids for the purchase of 10 new police vehicles.