JOPLIN, Mo. —
Only minutes after a deal was inked Friday to cover losses in tax revenue to the Joplin School District, the city’s Tax Increment Financing Commission agreed to recommend that the Joplin City Council approve an $806 million redevelopment proposal.
That endorsement will be taken up by the council at a special meeting Friday, Dec. 28.
The agreement and the TIF plan vote ended a series of discussions among Joplin’s contracted master developer, Wallace-Bajjali Development Partners, the city and the school district that have taken place since October.
“This has been a long process,” said TIF Commission Chairman Doug Doll to the other 10 commissioners who had been meeting over the past month to discuss the questions that arose about the proposal. “You have spent a long time studying this and I want to thank you for all the time and effort you put into this.”
David Wallace, the CEO of the development firm, said he was happy with the outcome of the agreement that was signed only minutes before a 5:30 p.m. Friday meeting and final public hearing by the TIF Commission.
Wallace told the commission, “I stand before you very pleased with the outcome of the discussions we have had.”
The proposal would create a 3,000-acre district in the center of the city encompassing the tornado zone and downtown. In that district, future increases in property taxes and a portion of sales taxes would be set aside for tornado redevelopment projects.
Wallace told the commission that in order to do that, two challenges had to be met. One was to restore school district revenues to levels before the May 2011 tornado. The second was to fund operating and capital costs the schools would face if the redevelopment increases enrollment.
Those challenges were met, Wallace said, through the agreement that provides:
• A $13 million payment three years into the TIF plan to cover revenue losses experienced from the frozen tax levels.
• Covering a $1.4 million shortfall that may be experienced in school rebuilding costs.
• Providing a payment of $1,415 per student, which increased 1.5 percent a year, for enrollment increases that occur as a result of the redevelopment beyond the district’s pre-tornado level of 7,793 students.
• Paying $2,509 per student for increased enrollment that results in a need to build more schools. That money is to be held in reserve and paid back to the TIF district if school construction is not necessary.
The agreement also limits the life of the TIF district to 23 years, protects the school’s levy and any future levy increases, and keeps the TIF district from being enlarged. The developer and the city also are obligated to help find a way to finance school construction or increase the district’s bonding capacity if more space is needed and the district has to finance construction.
The Wallace firm hired a public sector advisory firm, Springsted Inc. of Kansas City, to review the plan and evaluate its feasibility.
Tom Kaleko, senior vice president of the firm, testified during the public hearing that his firm looked at the assumptions and financial factors in the TIF proposal and concluded that it will support the $57 million sought. He said the plan is front-loaded to build a number of projects in the first three years, but that development of all 12 proposed projects could take longer than anticipated. He said the values placed on the construction projects are actually fairly conservative estimates.
There are stages of development and a great amount of due diligence will need to be done at each stage before taking final action, he recommended. He also said timing the projects will be critical to the overall success of the plan.
School Superintendent C.J. Huff spoke in favor of the plan and its underlying agreements. In reference to the status of tornado recovery, Huff said, “We are where we are today because of a lot of hard work and trust” that should continue to finish the plan. “We look forward to the outcome of this work.”
Commission member Keith Grebe said that residents asked the commission to hold harmless the school district’s financial status. “What I want the public to know is we did as much as possible to see that the schools are protected.”
If the plan meets with City Council approval, residents can expect to see a flurry of land acquisition and project startup work in the first quarter of 2013, Wallace said.
The most recent projection is that the TIF district would generate $57 million that could be used toward a dozen projects that include residential housing, retail and office construction, and other development.