The Rolla Daily News - Rolla, MO
  • Hearings held on Forum Plaza tax abatement, sales tax district

  • Public hearings were held Monday night for the Forum Plaza Shopping Center Chapter 353 Redevelopment Plan and a petition to establish the Forum Plaza Community Improvement District.
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  • Public hearings were held Monday night for the Forum Plaza Shopping Center Chapter 353 Redevelopment Plan and a petition to establish the Forum Plaza Community Improvement District.
    No action was taken. That will come later, when three ordinances to implement the project are presented to the council, likely at the Sept. 15 meeting, City Administrator John Butz said.
    Sept. 15 will be a meeting devoted to retail development, for Walmart has also filed a new application for rezoning of property near the corner of Forum Drive and 18th Street for construction of a Neighborhood Market. The Rolla Planning and Zoning Commission will hear that request to change the zoning from R-1 to C-2 at its Sept. 9 meeting; a public hearing will be held, too.
    Then Sept. 15, the council will conduct a public hearing on the request.
    There is a huge conflict here, for the Forum Plaza redevelopment has as its anchor a new building for the Country Mart supermarket store. That store would go from some 30,000 square feet at its current location to a new building of 45,000-47,000 square feet on the other side of the center. That new building will be erected after the razing of the building now holding a furniture store.
    But Walmart wants to build a supermarket with a liquor store, drive-up pharmacy and convenience store with gas pumps less than a mile away. The supermarket would be approximately 41,000-42,000 square feet.
    Whether or not both businesses can operate so close to one another is questionable. In fact, a Country Mart official warned that a Walmart business so close to the shopping center would make it “go dark,” presumably meaning that it would result in a loss of the anchor and a significant negative effect on the other stores in the center.
    National media reports and financial websites have reported on Walmart’s strategy of building Neighborhood Markets to take away market share from local supermarkets, Dollar General, Family Dollar and Dollar Tree stores.
    Breaking it down
    Four men spoke about the Forum Plaza project during the hearings at Monday’s city council meeting:
    • Charles Renner, attorney at law with Husch Blackwell, Kansas City,
    • Jim Potter, representing Development Initiatives, Kansas City,
    • Scott Wilmoski, representing Super Market Developers LLC, and
    • Mark Grimm, special counsel for Gilmore & Bell P.C., Kansas City.
    Grimm began the Chapter 353 Redevelopment Plan hearing. This plan involves a tax abatement, and Grimm explained the abatement does not mean the owner of Forum Plaza will pay no property taxes. The property will be assessed in its current state, and that will be the base assessment. The city, school district, county government and board for the developmentally disabled, the local taxing districts, as well as the state, will receive property taxes on that base assessment.
    Page 2 of 4 - After the project is complete, it will be reassessed, and that will be higher. That amount between the base assessment and the reassessment is the “increment,” and for 10 years, the shopping center owner will pay no property tax on that increment. Then for 15 years, the owner will pay tax on half of the increment. But for all those 25 years, the owner will continue to pay on the base assessment.
    Moreover, Grimm said, the Chapter 353 plan would cover only real estate taxes, not personal property taxes.
    “It’s somewhat similar to the TIF project for Kohl’s,” Grimm said.
    Grimm also explained the Community Improvement District (CID) will be a self-taxing district that follows the property line of the Forum Plaza shopping center and parking lot. It will not include the credit union building or the closed convenience store property.
    As a self-taxing district, the CID would have its own board of directors that would impose a one-cent sales tax.
    “The CID is a separate political subdivision,” Grimm said. The stores would collect that tax, along with the other sales taxes, and turn them over to the Missouri Department of Revenue. The revenue department would transfer the proceeds of that penny sales tax to the Forum Plaza Community Improvement District.
    Grimm said the Forum Plaza renovation is a $14 million project and $4 million of that will come from the public/private partnership for the abatement and the CID.
    The CID would continue for 25 years, the same length of time as the abatement.
    What is blight?
    Councilman Jonathan Hines asked for a definition of “blight,” which is how the Forum Plaza must be designated under the Chapter 353 abatement provision.
    Hines noted his constituents tell him, “It is not blighted. I shop there. It’s safe to go there.”
    Grimm said the Chapter 353 definition is virtually identical to that used in the TIF project for Kohl’s.
    Potter, a business partner with Chris Sally, son of Gene Sally, developer of the Forum Plaza, explained the blighting process.
    He said the Chapter 353 redevelopment procedure is found in Chapter 353 of the state statutes while the CID provisions are found in Chapter 67.
    Chapter 353.020 defines a blighted area as “that portion of the city within which the legislative authority of such city determines that by reason of age, obsolescence, inadequate or outmoded design or physical deterioration have become economic and social liabilities, and that such conditions are conducive to ill health, transmission of disease, crime or inability to pay reasonable taxes.”
    “Since 1973, the shopping center has been largely unimproved,” he said.
    Potter said Forum Plaza is not paying an adequate share of taxes, it is a haven for crime and it leads to ill health so it meets the definition of blighted.
    Page 3 of 4 - Renner said, “Finding a way to address aged shopping centers is a national challenge.”
    A public/private partnership is a way to do that, he said, and this plan “attempts to preserve your tax base.”
    “It even attempts to grow your tax base,” Renner said.
    It does that through the tools of Chapter 353 and the CID.
    Wilmoski said, “In this community there is not a quality grocery-anchored shopping center” because of the deterioration of the Forum Plaza.
    “At one time this was probably quite a show-piece,” he said of the shopping center, but that is no longer true.
    Super Market Developers wants to turn the Forum Plaza into a high-quality center with a quality anchoring tenant, believing and expecting that the process will bring along other quality tenants that will serve customers.
    Developments are in 23 states, so “this is not a first-time adventure,” Wilmoski said.
    Acknowledging the anchoring tenant, Country Mart, will be the focus of the project, Wilmoski said the center will be remodeled and rehabilitated throughout.
    Councilman Morris quizzed Wilmoski about whether that work on the rest of the center, aside from the new and larger building for Country Mart, would be reworked inside, on the roof and underneath.
    “We’re talking about more than just a pretty new facade, right?” Morris asked.
    Wilmoski assured him that the work would be substantial inside and out.
    Asked by Councilman Tony Bahr about a timeline for the project, Wilmoski said the company hopes to begin work soon, opening in September 2015, depending on the weather.
    “Who will own it?” Bahr asked.
    Wilmoski said the center will be owned by Super Market Developers, which is an affiliate of Associated Wholesale Grocers, a cooperative of grocery stores and supermarkets of which Country Mart is an owner/member.
    Residents weigh in
    During the public hearing, the only speaker representing one of the affected taxing districts was Dr. Aaron Zalis, superintendent of Rolla Public Schools.
    Zalis pointed out the school district is dealing with a decrease in assessed valuation of the property on which it receives tax proceeds. Nevertheless, he did not speak against the property tax abatement.
    “We want you to know we appreciate being part of the discussion,” Zalis said on behalf of the school board. “Growth is a good thing,” he continued, noting that “whatever you feel is appropriate, we trust.”
    Resident Tom Sager spoke against the project, giving a scenario in which he would like an abatement on his home’s real estate taxes so he could remodel it.
    Page 4 of 4 - But he said, “I’m not going to ask you to do it. I know what your answer is. There is no tax abatement for a citizen.”
    But “out-of-town developers” will receive abatements because they promise that the sales tax will increase due to increased business throughout the town because of the development, Sager said.
    That didn’t happen with Kohl’s, Sager said. “Sales tax didn’t go up,” because customers redistributed their purchases from other similar stores in town to Kohl’s.
    Lynn McFarland, another resident, said he was not against the public/private partnership, but he urged the council to “think hard about that 25 years.”
    He said he believed the 25-year span for the real estate tax abatement and the sales tax collection for the company was too long on an aged shopping center.
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