The Joplin Globe, Joplin, MO

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January 18, 2013

Super TIF district proposed for Joplin

JOPLIN, Mo. — Legislation has been filed that would allow Joplin to receive half of any increase in state sales tax and income tax revenue in the town’s newly created disaster recovery tax increment financing district.

The bill also would allow a museum and cultural district to be created for a proposed downtown cultural arts project that would enable the city to enact a sales tax and an admission fee to help pay for its construction.

That project is called Stimulating Progress through Arts, Recreation and Knowledge of the Past” — SPARK. It would involve construction of a performing arts center and amphitheater, restoration of the Union Depot for restaurants, and construction of a new Dorothea B. Hoover Historical Museum.

The City Council last month approved the designation of 3,000 acres encompassing the tornado zone, Main Street and downtown for a TIF district. That will allow the use of half of any new increase in local tax collections to go to the construction of $806 million worth of redevelopment projects for recovery from the 2011 tornado.

The proposed legislation would allow the establishment of a state supplemental tax increment financing district — a “Super TIF” district — within the newly declared TIF district.

“The Super TIF takes in the geographic footprint of the TIF district and there is a percentage of the state’s portion of sales tax — 50 percent — collected in that district that gets rebated back to the city,” said David Wallace, CEO of Wallace Bajjali Development Partners of Sugar Land, Texas, the city’s contracted master developer.

If the legislation is approved, Wallace said, the city also would receive half of any new state income withholding taxes within the district as well as a share of state sales tax. He estimates that would provide $17 million of the $57 million that the TIF district is expected to generate.

Super TIF districts were created in Missouri in 1997 and have been used to finance projects in a number of cities.

Kansas City, for example, has TIF districts in 22 developments, according to that city’s TIF Commission director, Heather Brown. The state Department of Economic Development’s annual report shows Super TIF districts in six of them.

Wallace said that like the local TIF district, a Super TIF distrcit does not impose any new taxes. It receives half of any revenue increase generated by existing taxes as a result of new business or increased levels of business because of development.

Another part of the bill would allow Joplin to establish a museum and cultural arts district. That would be an expansion of the state’s current museum district law, adding theater, music, entertainment and other related activities in public buildings.

It would provide the authority to impose a sales tax of up to 1 cent for retail sales in the district. It also would allow for an admission surcharge of up to $1 per person.

The bill would establish a board of eight that would decide whether to impose the taxes and, if so, how much. Three of those directors would be appointed by the governor with the consent of the Senate, and five would be representatives of the City Council, according to Wallace.

Asked if city voters would get a say, Wallace said, “The City Council could enact the tax without a vote of the people. It is based on the premise that if you use it, you pay for it. It is not like a property tax for something you may not use.”

In St. Louis, a property tax rather than a sales tax is levied to support the city’s museum district. The money goes to the St. Louis Art Museum, the Zoological Park, the Missouri Botanical Garden, the St. Louis Science Center and the Missouri History Museum.

The current museum district law states that once a tax is imposed, it cannot be repealed while the district has liabilities or outstanding debt.

Asked if the Joplin bill has a sunset provision, Wallace said the tax is intended to be in force for 40 years while the bonds for construction of the cultural arts complex are paid off.

The admission fee “is not a general tax for citizens,” Wallace said. “It is not collected except for in this district. If people want to see a show, they pay a price, and this fee is included in that price, so it is not a tax or fee assessed on people who are not benefiting from it.” He compared it to a facility charge paid on concert and theater tickets.

Nancy Morton, co-chairwoman of the Cultural Affairs Committee of the Joplin Area Chamber of Commerce that has promoted SPARK, said, “I truly believe the efforts that are going forth are nothing but positive for Joplin’s development. It is a continuation of where Joplin was before the tornado” in planning for a cultural arts complex.

“We are going forward and going forward with a lot of momentum, and I’m very impressed with the projects that the Wallace Bajjali firm has already locked down and the support our community has given them.”

Trisha Patton, executive director of the Downtown Joplin Alliance, said that organization sees the proposed legislation as furthering efforts to help the downtown.

“The Downtown Joplin Alliance is in strong support of any of the TIF-funded projects that have been proposed in downtown or the urban area, such as the SPARK plan and museum. This SPARK project is going to be such a tremendous boon, not only to the downtown, but the city in its entirety, and so we want to make sure it can happen.”

Asked about the added taxes to the district, she said, “I think the value of what you will be getting will be well worth it, and I think Joplin citizens will see that.

“This complex is expected to boost tourism of out-of-area residents, so it will end up lessening the effect of the TIF” district on local patrons of the cultural arts district.

The legislation is Senate Bill 74 and is sponsored by Sen. Ron Richard, R-Joplin. It is similar to a bill he introduced last year and to House Bill 8 that was introduced in the Legislature’s extended session in 2011.

The bill adds a federally declared disaster zone as a definition that can be used to establish a tax increment financing district. TIF district law currently allows the districts to redevelop blighted areas or as a tax conservation area.

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