A Kansas City, Kan.-based company wants to renovate and expand the Forum Plaza
A Kansas City, Kan.-based company wants to renovate and expand the Forum Plaza.
And much like the Westside Marketplace plan, the work would be done with the financial help of the city.
“As you know, my client, Super Market Developers Inc., (the “Developer”) is interested in redeveloping and revitalizing the Forum Plaza shopping center (the “Center”) through the construction of a new supermarket and the rehabilitation of the existing inline retail shops,” attorney Charles G. Renner, a partner in the Husch Blackwell law firm, told the city in a letter to City Administrator John Butz that was included in the council agenda at the Monday, April 21, meeting.
Renner and a representative of the Super Market Developers Inc. spoke to the council, reiterating what the attorney said in his letter.
“The Developer will invest significant capital into the Center as part of the development, but the project is not economically feasible without the partnership of the City of Rolla, Missouri, and the availability of additional funding sources.”
What the Super Market Developers wants to do is build a new 46,391-square-foot supermarket at the north end of the shopping center property, which is on the opposite side from where the current supermarket is.
“In order to construct the new store, the developer will first demolish the existing inline retail building at the north end of the Center and relocate existing tenants to the inline building on the east side of the property, which will remain a core aspect of the Center,” Renner wrote.
He said the Super Market Developers will also “generally remodel and improve the center as a whole.”
“The preliminary project budget reflects total project costs of $13,925,000,” Renner explained in writing. “The Developer proposes to fund $9,925,000 (or 71 percent) of these costs and is requesting that the remaining $4,000,000 (or 29 percent) be funded through the formation of a community improvement district which would utilize revenue from a self-imposed sales tax and special assessments, in conjunction with Chapter 353 tax abatement, to finance this portion of the costs.”
Butz in his agenda commentary explained that the community improvement district, or CID, is a better choice of funding for this project than a tax increment financing, or TIF, plan like the one that brought Kohl’s to Rolla and is being considered for the Westside Marketplace project.
Butz described the CID as “a sales tax overlay district” that would cover only the shopping center. The Chapter 353 redevelopment method is a property tax relief mechanism.
“There is considerable work and process required to consider this type of public/private partnership though it is not as difficult as TIF,” Butz wrote to the council.
He explained the CID with these main points:
• Separate political subdivision with a governing board made up of five members.
• Can levy sales tax, property tax or assessments on the district.
• Created by petition of the owners of the affected property.
• Wide variety of improvements may be funded including demolition, parking, landscaping, etc.
• No blight determination required as in TIF.
The Chapter 353 property tax abatement would have these considerations:
• Affects real property taxes of all taxing jurisdictions.
• Maximum 25-year abatement of “increment.”
• Redevelopment corporation to be formed becomes the “owner” of the property.
• Blight and tax impact analysis required.
“If the city is willing to participate in this redevelopment project, the city will need to invest some time and expenses in legal fees, financial adviser fees, redevelopment plan preparation and a blight and economic impact analysis,” Butz wrote to the council. “The next step would be a preliminary funding agreement for the advancement of funds, which is still to be negotiated.”
In his letter to the city, Renner noted that boundaries of the CID and the abatement area would include the whole shopping center but not the credit union property or the convenience store property in the southwest corner.
“The CID would impose its sales tax at a rate of up to 1 percent on all eligible taxable sales within the CID,” Renner wrote.
The Chapter 353 tax relief would ”impose special assessments in an amount equal to the increment between the abated assessed value and what the assessed value would be without the abatement.”
That tax abatement of all the payable ad valorem real estate taxes in the developed area would last 21 years.
“During the term of the abatement, payments in lieu of taxes in an amount equal to the current ad valorem real property taxes will be made yearly to the local taxing jurisdictions within the development area,” Renner wrote.