Four resolutions laying the groundwork for potential public assistance to help finance a new mixed-use development in the area of 32nd Street east of Range Line Road were approved Thursday night by the Joplin Tax Increment Finance Commission.
The retail development, to be called 32nd Street Place, would be anchored by a Menards home improvement store. It also would eventually involve construction of 300 units of multifamily housing, a movie theater, retail and commercial buildings, as well as renovation of the former Holiday Inn hotel. Those projects are proposed in five phases through 2027.
Woodsonia Real Estate Group plans to develop the 32nd Street Place projects in five phases through 2027. Drew Snyder, president of Woodsonia, told the commission that the former Joplin Convention Center on Hammons Boulevard is not included in the development plan. It had been owned by the same company that developed the Holiday Inn hotel but was previously sold separately in the bankruptcy liquidation of the former John Q. Hammons properties.
Project costs, which have been revised since planning started nine months ago, now stand at $188.8 million. Of that, nearly $139 million, or about 73%, would be private investment and debt. The developer is seeking tax increment financing of about $28.7 million of the cost.
Another special tax district, a community improvement district, would provide about $21.3 million. That district also already received approval of the City Council. It will allow the development to collect an extra cent of sales tax in the retail areas except Menards for project funding.
TIF financing allows half of the new taxes generated by the development, including sales and property taxes, to be paid for up to 23 years to the developer to help with the project costs. The city's finance director, Leslie Haase, said projections show that for this project, it should take only about 16 years to pay the TIF portion. After that, taxing districts such as the city and school district would receive their full tax payments.
Costs or portions of them that can be repaid through a TIF are those such as professional services for studies, surveys and plans; land acquisition and demolition; repairs of existing buildings; and public improvements such as streets, sewers, parking and lighting.
In this case, a new intersection at 32nd Street and what is now Hammons Boulevard would be built to regulate traffic. Hammons Boulevard, which has been a private road, would be relocated and built to public standards. Sidewalks also would be built to accommodate pedestrians.
The plan also calls for a current vacant restaurant building, the former Jim Bob's BBQ south of Sam's Club, to be renovated as an office building for BKD, an accounting firm located farther north on Hammons Boulevard. BKD will relocate to clear the way for retail construction along the 32nd Street corridor and the Menards project.
In order to qualify for TIF funding, properties must meet certain specifications in the state law. One of those is blight.
Bill Moore, an attorney for the developer, testified that the property can be defined as blighted for several reasons. It has old mining ruins and ponds over part of the land. The vacant hotel is a dangerous building. There is deterioration of several buildings in the area and homeless camps on the property.
The property has obsolete platting and faulty lot shapes, inadequate streets and other blight factors. Moore said none of the land parcels are free of blighted conditions.
That makes the property an economic liability, reducing its value and income and generating little or no tax revenue because of those conditions. Moore said the assessed value of the property declined 42% between 2015 and 2019.
The city's finance director said city staff also concurs that the property qualifies as blighted. She said the project also must pass the "but for" analysis in the law that the project could not be built but for the public assistance.
Tom Dennehy, of the Baker Tilley accounting firm in Kansas City, testified that he analyzed the developer's financials including its cash flow projects and internal rate of return on the investment. He said without public assistance, the rate of return would be a negative number of less than 1%. With assistance, the return would be more than 8%, which he found to be a feasible amount of return to a developer.
His conclusion that the project could not be done but for the tax incentives, Dennehy said.
After hearing the testimony, the TIF Commission, which included representatives of the Joplin School District, and Jasper and Newton counties as well as other taxing entities voted unanimously to send the resolutions to the City Council recommending approval of the TIF.
Haase said the council will take it up at a meeting Nov. 16 or Dec. 7.
Woodsonia also developed the Natural Grocers store at Seventh Street and Range Line Road and the Buffalo Wild Wings restaurant at 15th Street and Range Line Road.