YOUR BUSINESS AUTHORITY
Springfield, MO
YOUR BUSINESS AUTHORITY
Springfield, MO
As the plans go: Out with one community improvement district, and in with another.
At the Sept. 28 Springfield City Council meeting, council held public hearings on dissolving the 4-year-old Hy-Vee CID at Battlefield Road and Kansas Avenue and on creating the Springfield Plaza CID as developers work to build a critical mass of interest.
Retail targets
Council members considered a bill to establish the Springfield Plaza CID and assess a half-cent sales tax to help cover a $10 million tab for the mixed-use development’s infrastructure.
For the 96-acre Springfield Plaza, new entrance streets are designed to connect West Bypass and Sunshine Street behind the Wal-Mart Supercenter at 3520 W. Sunshine St.
Led by commercial real estate brokers Tom Rankin and Jeff Childs, Springfield Plaza Real Estate LLC secured council approval in May 2013 for a tax increment financing district to reimburse infrastructure costs on their planned $78.5 million retail and office complex. Those efforts paved the way for the creation of a CID to support the TIF district.
The CID would have a maximum life of 50 years, and administrators would be able to collect up to a 1-cent sales tax to reimburse infrastructure. Rankin anticipates the CID to be in place for no more than 18 years and to collect only a half-cent sales tax, but he wasn’t sure how much revenue the district would generate.
“It’s really kind of hard to say depending on what kinds of retailers we have. We can do probably up to about 600,000 square feet of development total. Our first phase, we are working on a 150,000-square-foot retail center just west of Wal-Mart and south of Washita [Street]. We’ve spent about $1.8 million on infrastructure thus far,” Rankin told council. “Of that 150,000 square feet for retail, depending on the retailers we ultimately get signed, it could be $30 million in (sales) or something like that – or $40 million in sales.
“But, it’s hard to say.”
After the meeting, Rankin said the city requested formal establishment of the district since the TIF was designed to work in tandem with the CID sales tax. The TIF allows Springfield Plaza Real Estate to receive a portion of the property taxes in the district to reimburse improvements while the CID receives revenue through sales taxes. He said those districts wouldn’t be active until there is a retailer ready to break ground.
With plans for a mix of office and retail development, Rankin said the more retail tenants, the quicker the developers’ infrastructure costs would be reimbursed. For now, he said there is interest among unnamed national retailers, but no commitments.
“What we end up with will be market driven,” Rankin said, adding Springfield Plaza is a candidate for a 90,000-square-foot Veterans Affairs clinic, which could take up to 15 acres. “Our goal, financially and otherwise, is to get retail in there.”
He said an anchor retail tenant – which he expects to have committed in a year – should spur others into action.
“Often with national retailers, they all require co-tenancy. They all have to be there or none of them will be there,” he said.
Grocery taxes
For Des Moines, Iowa-based Hy-Vee Inc., its CID was established in 2010 to help pay for infrastructure improvements via a half-cent sales tax. The work included a new stop light at Kansas Avenue and Battlefield Road to the north and an extension of Montclair Street to the south.
In October 2011, Hy-Vee opened the 86,000-square-foot, $17 million grocery store at 1720 W. Battlefield Road, and began collecting the CID sales tax.
“It’s time to terminate the district, and that’s what this bill does,” Springfield Planning and Development Director Mary Lilly Smith told council. “This CID was established with a life of 14 years, though they fully anticipated to pay it off early. Four years to pay it back, that’s pretty good.”
The taxing district reimbursed Hy-Vee for roughly $600,000 spent on infrastructure around the store.
“It’s been a good project and a major sales-tax generator,” Smith said.
Student housing
Council also heard plans for more center city student housing that could add 174 bedroom units to the market and an estimated $700,000 in property tax abatements.
Two weeks after council approved an expansion of the Madison and Kimbrough Redevelopment Plan along Grand Street, three other properties around the Bear Village complex have been identified for future development.
Magers Properties III LLC submitted the plan, which comprises three parcels on 2 acres along the north and south sides of the 600 block of East Madison Street and the west side of the 800 block of South Holland Avenue. The plan proposes to demolish four multifamily residential structures, a single-family residence and a leasing office, according to information in the bill.
Magers Properties would construct three apartment buildings on the properties.
“They are talking about a phased construction, with the first phase being a three-story, 12-unit building for 24 residents to be completed next spring. And phases two and three would be completed in 2018 with 150 residents,” Smith said. “There are no zoning modifications in this case; it is purely about incentives.”
Kevin Hoffmeyer, a real estate attorney with Spencer Fane LLP, said following the meeting that multiple property owners were involved, but he declined to comment further.
A second reading and votes on all three bills are scheduled Oct. 12.
A safe room and classroom addition at Willard Central Elementary School will be used by the music, arts and athletic programs for a district that had 4,536 students last year, according to Missouri Department of Elementary and Secondary Education figures, but school officials say enrollment is projected to grow.
