The Joplin Globe, Joplin, MO

November 28, 2012

TIF Commission delays vote but will go ahead with hearing

By Emily Younker
news@joplinglobe.com

JOPLIN, Mo. — Joplin’s TIF Commission agreed Wednesday to delay its vote on the creation of a tax increment financing district in that area of the city hit by the May 22, 2011, tornado. That vote originally was set for Friday.

During a commission meeting, David Wallace, of Wallace Bajjali Development Partners, the city’s master developer for tornado recovery, outlined a proposal to alleviate school district costs that would come with enrollment growth if the TIF is successful in bringing in residential development to replace homes lost in the storm.

As planned, the commissioners will accept public comment and testimony on the proposal during a public hearing set for 6 p.m. Friday at City Hall.

They are expected to postpone their vote — which is a recommendation to the City Council — until Thursday, Dec. 6, and possibly even a week later. That will give the school district and Wallace Bajjali more time to work out an agreement to address the concerns of educators, and it also will give the commissioners more time to review the overall proposal.

If the TIF district is to take effect in 2012, the deadline for the commission to act is Dec. 14 because under state law, there must be a 14-day wait between the TIF Commission vote and final City Council action, according to City Attorney Brian Head. That would allow the council to meet by Friday, Dec. 28, and give its final nod to the plan.

Wallace has told school and city officials that if the TIF district is to be established using 2012 property valuations, the City Council must take action by Dec. 31. After Jan. 1, the TIF district would have to use 2013 property valuations, and Wallace said the city risks losing a portion of the $60 million in revenue that the TIF district is currently projected to generate.

The move to postpone the vote came Wednesday as questions were still being answered by the developer.

C.J. Huff, superintendent of Joplin schools and one of the two school district representatives on the commission, asked for a postponement of the vote. School board members unanimously recommended Tuesday night that Huff ask for the continuance, saying they required more time to analyze the information that was being given to them.

Doug Doll, chairman of the commission, also supported postponing the vote until next week.

“Personally, I don’t think I’m going to be ready to vote Friday, either,” Doll said.

The TIF district is being proposed by Wallace Bajjali to help pay for $806 million in residential and commercial redevelopment projects across most of the zone affected by the tornado. The TIF district also would extend to the downtown area. It is projected to generate up to $60 million in revenue over 23 years through increases in property taxes and a portion of sales taxes. The revenue would be diverted from existing taxing entities, such as the school district, the county and the road district, and back into development within the disaster zone.



School challenges

Most of the discussion Wednesday centered around concerns previously raised by the school district. Huff said the school district, the city and the development firm continue to work toward solutions for what the school district has identified as its two primary challenges with the TIF district.

One challenge is that of projected population growth and an increase in school enrollment if the residential projects are successful. School officials have said housing redevelopment in the TIF area could draw hundreds of new students to the school district, which would add operational costs and could create a need to build additional schools.

To address that concern, Wallace on Wednesday recommended that the TIF plan include an annual payment to the school district of $2,500 per student, to be given to the district for an increase in students in the TIF area above its baseline enrollment before the tornado. Based on his firm’s projections, he said it could take five or six years for the district to reach that point, and several more years after that before enrollment might prompt school officials to say they need another school.

School officials said the annual cost of educating a child in the district, based on Cecil Floyd Elementary School and South Middle School numbers, is $1,361 per elementary student and $1,525 per middle school student. Huff on Wednesday countered Wallace’s proposal by suggesting that the difference between the actual cost per student and the offered payment — about $1,100 at the elementary level — be held in escrow until an additional school might need to be built.

“We’re not out for anything more than we need to operate and be functional,” Huff said.

The other challenge outlined by school officials is that the TIF district, as proposed, would freeze assessed valuations for the school system for 23 years. A school district’s assessed valuation is a factor in how much it receives in property taxes. School officials have calculated the lost valuation at $34 million, but Wallace on Wednesday said the loss might actually be higher.

According to figures he said he recently received from PGAV Planners, a St. Louis company working with Wallace Bajjali and the city to prepare the redevelopment plan, the decline in valuation would be closer to $39 million. Wallace said the assessed valuation within the proposed TIF district was $112 million before the storm, but $73 million afterward.

According to school officials and Wallace, the school district is losing more than $1 million per year because of the decline in property values after the storm.

The TIF plan, as presented, also includes a $12 million payment to the school district.

Wallace said discussions with school officials about those two concerns will continue over the next several days.



Down one

MICHAEL HAGAN, a city-appointed member of the 11-member TIF Commission, stepped down from the position Nov. 27, according to commission chairman Doug Doll. The City Council will be responsible for naming his replacement.