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Sansone/Wal-Mart TIF Redevelopment Project

Sansone/Wal-Mart TIF Redevelopment Project. Council Presentation April 18, 2012. Talking Points. Misconceptions Project Benefits Long-Term Protections. Misconception #1. City/taxpayers will pay if TIF notes/bonds default § 99.835.5 RSMo:

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Sansone/Wal-Mart TIF Redevelopment Project

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Presentation Transcript

  1. Sansone/Wal-Mart TIF Redevelopment Project Council Presentation April 18, 2012

  2. Talking Points • Misconceptions • Project Benefits • Long-Term Protections

  3. Misconception #1 • City/taxpayers will pay if TIF notes/bonds default • § 99.835.5 RSMo: “Neither the municipality, its duly authorized commission, the commissioners or the officers of a municipality . . . shall be personally liable for such obligation by reason of the issuance thereof. The obligations issued . . . shall not be a general obligation of the municipality . . . , nor in any event shall such obligation be payable out of any funds or properties other than those specifically pledged as security therefor. . .” • Redevelopment agreement specifically restricts payment of debt to TIF revenues only; City has not backed the TIF debt and will not pay any shortfall

  4. Misconception #2 • City’s credit rating will be affected if there is a default on TIF bonds • 50+ TIFs in County since TIF law was passed; ZERO have resulted in bond defaults • TIF debt is not backed by City in any way • Bond underwriter assures that without City backing for the debt, City’s credit rating would NOT be affected in event of default

  5. Misconception #3 • Project will take money from other taxing jurisdictions • Because of vacancies, property values and tax base are declining • Without redevelopment, taxing jurisdictions will continue to lose property tax revenues • With TIF, the increase in property tax revenues (the “increment”) will pay for some project costs, but the base property tax revenues will stabilize while TIF is in place and will increase after TIF debt is paid • TIF Ordinance also provides 25% “pass through” of increased property tax revenues

  6. Misconception #4 • Sansone & Wal-Mart can build project without TIF • Question isn’t whether project can be built without TIF; the question is whether it will be built without TIF • Developer has provided financial data establishing that “but for” TIF, the project won’t be built • City’s planning consultant has confirmed this conclusion • Not like Florissant (major commercial corridor, commercial property values, significant acquisition, demolition & site prep costs) • Council must determine whether the site will be developed without public assistance, not whether it can be developed

  7. Overhead

  8. Project Benefits(City) • Critical parcel for City’s future development (City’s consultant—1 of 5 redevelopment areas) • Wal-Mart development will provide an anchor for future development of adjoining corner (Town Center & Mixed Use) • Wal-Mart development will generate an estimated $600,000 in new sales tax revenue

  9. Project Benefits(Site Improvements) • Trail dedication and extension ($50,000.00 donation for future maintenance) • Great Streets Elements (Connectivity and Walkability) • Cross-access to RPA2 • Two pedestrian walkways • Pedestrian scale lighting for Manchester and Walkways • Enhanced landscaping • Use of stone in building elevations (subject to ARB approval) • Pedestrian bridge land dedication • Portion of TIF revenues (5-10% of excess over amount needed to meet TIF debt) to be dedicated for future Great Streets improvements

  10. Project Benefits(Concept Site Plan)

  11. Other Project Benefits • No eminent domain (owners have agreed to sell to Sansone) • Enhanced relocation benefits (relocation agreement expands on state minimums by making benefits available to more tenants) • “Pass-through” of 25% of increased property tax revenues generated by project to other taxing jurisdictions (but for project, tax revenue would remain flat/decline)

  12. Long-Term Protections • Wal-Mart to hold $2M in notes (to encourage Wal-Mart’s full retail use of the property over time and to ensure that the TIF debt is paid off) • Demolition provision—provides that if Wal-Mart leaves the building vacant (defined as in excess of 50% of the space) for a period of 12 months, the City can initiate demolition proceedings to clear the site and bring it to a “pad ready” development status

  13. Questions

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