Joplin City Council members and Joplin city officials responsibly executed their public offices in the recent 6-2 vote to deny tax increment financing for the Boomtown Central Shopping District on 32nd Street east of Range Line. The City Council TIF decision was not anti-business, as some have suggested. It was a tough call made when the developer’s answers failed to satisfy.
A TIF district is a way to subsidize redevelopment in areas deemed blighted or designated as conservation areas or economic development areas. A TIF district returns half of the increased sales tax revenue it produces and 100% of the increase in property taxes above the baseline before redevelopment to the developers for up to 23 years to repay property development costs such as streets and sewers.
Any program that shifts public money into the hands of a private company merits intense scrutiny. The bar to secure TIF funding is — and should be — high.
The $77 million plan called for a Menards home improvement store to anchor a two-phase development project that would have left Joplin taxpayers on the hook to ensure the developer walked away with a decent payoff.
There were a number of problems with the proposal from the city’s side of the equation. Though Menards is a store many would like to see in Joplin, the products it supplies are already available from a number of existing local sources. Arguably, the development would have shifted sales into the special taxing district away from existing stores — not a desirable outcome as the city would lose sales tax without a gain in commerce for every customer that simply moved from one local vendor to another. The grocery store, theater and additional vendors were touted but not guaranteed.
The development group, Summit Denali, proposed to turn vacant property along John Q. Hammons Boulevard into a shopping center, but the proposal left the most clearly blighted part of the area — the closed Joplin Trade Center at 3536 John Q. Hammons Blvd. and adjacent closed hotel — out of the project.
Many of the details of the project were unresolved, yet the developer sought significant financial guarantees from the city in excess of those granted in other developments. Further, City Attorney Peter Edwards said the developer wanted to make the taxpayers responsible for the easement and eminent domain work involving Sam’s Club for access points and a new main road into the development. That could be sticky and costly.
The TIF district in this case would make the city responsible for a big return for the developer with inadequate assurances for taxpayers. City officials and council members were not hearing the answers needed to justify committing to the agreement, so they balked.
Good job — taxpayers shouldn’t be on the hook for a questionable deal.