Several Joplin area banks are being asked to participate in a consortium to lend the Joplin Redevelopment 353 Corp. money to start buying land for projects that will be part of the city’s tornado recovery.
David Wallace, chief executive officer of the Wallace Bajjali Development Partners, told the 353 board on Tuesday that he is seeking $8 million in loans to start purchasing land for some of the $794 million in projects proposed for Joplin’s redevelopment.
The 353 organization is to be the land bank for the projects and a means to generate money for future projects through land sales. The plan is to fund those purchases with $30 million. Of that, $8 million will come from the city’s federal Community Development block grant funds. The city has been awarded a $45 million grant for tornado recovery. Wallace also is negotiating a commitment from the Missouri Development Finance Board to obtain $22 million in bonds for land purchases.
Access to money would allow pending land deals to close within two to three months, Wallace told the board. Wallace has asked Doug Doll, president of Arvest Bank, to seek commitments from five to nine banks to pitch in on the $8 million loan pool. Wallace is asking that the banks forgo requiring a down payment.
“The banks would usually require 20 percent equity, but they have agreed to make 100 percent loans with only the loan and the land on the balance sheet,” he said.
Wallace said a similar loan consortium for $6 million was done on an Amarillo, Texas, project his firm handled.
The bonds sought from the state would be repaid from taxes generated in a proposed tax increment finance district the master developer proposes. The TIF district would encompass the tornado zone and the downtown district.
Wallace said it does not impose any new taxes on property owners. It would channel the taxes created by the new development for bond payoffs and reinvestment in the development projects. Wallace told the 353 board he believes the projects in the TIF district would generate $60 million in capital.
“Generally, a TIF is created for the benefit of the developer” to repay costs incurred in providing infrastructure and streets within the development that government would normally be obligated to provide. “This TIF is being funded for the benefit of the community,” Wallace said.
The board asked if members could be held liable if any legal issues arose. City Attorney Brian Head said liability insurance is being purchased for the board.
A closed session was held by the board after the discussions on the loans and TIF. The board cited an exemption in the open records law allowing closed discussions on real estate transactions as the reason.
A PUBLIC MEETING on the TIF proposal is scheduled for 5 p.m. Thursday, Nov. 8, at City Hall to inform residents about the details of the proposal.