City of Independence Partners with Rural ReDevelopment Group to Transform Former Mercy Hospital into Mixed-Use Housing and Commercial Complex
The City of Independence has taken another major step forward in addressing community housing needs and economic development after City Commission approval Thursday of an agreement with DeSoto, Kansas-based Rural ReDevelopment Group, LLC (RRG) to transfer ownership of the former Mercy Hospital property.
The project will redevelop the existing structure at 811 W. Laurel into a mixed-use complex of commercial and residential units, directly advancing the Commission’s established goals to expand quality housing opportunities and encourage private investment in Independence.
The redevelopment aligns with the City Commission’s priorities, including:
- Creating new housing units to meet demand, particularly for middle-income families.
- Accelerating housing initiatives to provide quality, affordable living options.
- Partnering with private developers through innovative incentives and public-private collaboration to address housing and commercial needs.
The project also meets the goals of the City’s Community Development Plan adopted in 2024, including:
- Supporting Future Land Use Goal 1: Grow efficiently and promote a healthy mix of land uses by promoting a mix of residential uses for increased housing choices.
- Achieving Economic Development Goal 2: Encourage new and updated housing as a form of economic development by introducing medium- and high-density residential units and supporting adaptive reuse of existing large structures.
Per the agreement, the City will convey the former Mercy Hospital building and adjacent lots to RRG. The purchase will be completed via a $500,000 second place forgivable note from the City to RRG. The City is not providing any cash to the buyer. Note forgiveness is strictly contingent upon RRG completing the development of apartment units in the building; otherwise, the note must be repaid. According to the plan, the project also will include development of commercial spaces on the property.
City Manager Kelly Passauer said the project is the result of extensive collaboration between the Independence Housing Authority (IHA), City staff, the City Attorney, Montgomery County Action Council, and representatives of the Economic Development Advisory Board, all of whom worked closely with the developer to create a framework that benefits both the community and private investors.
“This project is a clear example of how collaboration and creative partnerships can bring lasting benefits to Independence residents. The agreement also shifts the ongoing operational costs from the City to RRG while transforming an underutilized building into productive use, Passauer noted.
“Special recognition is given to IHA Executive Director April Nutt, who served as the City’s direct contact with the developer. Her dedication and hard work were instrumental in bringing this agreement together.”
“The redevelopment of the former Mercy Hospital into modern housing and commercial space represents an important step forward in meeting our community’s housing needs,” Nutt said.
Independence Mayor Scott Smith also praised the initiative.
“This redevelopment is more than just a housing project — it’s about transforming a primarily vacant facility into a vibrant hub of community activity. It will bring new energy to one of our older neighborhoods, attract investment, and demonstrate how Independence is building a stronger future for generations to come.”
The agreement stipulates that a construction timeline of 24 months will be allowed for completion of the housing units.