Springfield First Community Bank put up $2.9 million during a courthouse auction March 5 to cover a tax lien on Larino Properties LLC’s 32-acre Wilson’s Creek Marketplace.
The bank’s move on the steps of the Greene County Courthouse prevents an August tax sale of the vacant mixed-use development outfitted with curbed streets at the northwest corner of highways FF and M, according to Greene County Administrator Tim Smith. Springfield First Community Bank officials did not return calls for comment by press time.
“The bank settled the property taxes owed to the county, both regular property taxes and under the neighborhood improvement district assessment,” Smith said.
Greene County had worked with developers to cover the cost of infrastructure on two sizable mixed-use developments in recent history through the creation of neighborhood improvement districts: Larino’s Wilson’s Creek Marketplace and American Equities of Missouri Inc., the developer behind the 200-acre residential and commercial community in Rogersville known as Jamestown.
NIDs are funding mechanisms in which government entities typically issue bonds to pay for infrastructure construction or property improvements and apply increased property tax levels during a given period of time to make bond payments.
In this case, Greene County’s combined liability on bond payments issued to fund the infrastructure construction for Jamestown and Wilson’s Creek is $1.26 million this year, and the county must make payments for the next 20 years, according to county Auditor Cindy Stein.
At Jamestown, AEMI President Stephen Cope said in 2011 the economic downturn arrived just as the project was coming on line.
A lack of interest in the development, which included a 27,340-square-foot shopping center fronting U.S. Highway 60, 104 residential lots and 51 commercial lots, led to a May 2010 bankruptcy filing one day before a scheduled foreclosure sale. Later that year, however, court records show the bankruptcy was dismissed in September 2010. Cope said in June 2011 he had received financing to pay off his debts on the property from a lender he declined to name. However, today only five houses have been built in the Jamestown subdivision, and 42 commercial lots are still available, according to Cope, who said he is not giving up on the project.
“Once we get a Wal-Mart in there, everything will work itself out,” Cope said, noting representatives of Wal-Mart Stores Inc. had expressed an interest in the site in 2009 before backing out.
Cope said he has maintained conversations with the retailer, but there are still no plans for a store at his 20-acre, anchor commercial parcel.
Now, the county is threatening to sell the property owned by Cope’s Jamestown LLC for not paying the $969,564 tax bill it owes, Smith said.
“The property owner did not pay the NID assessments, which are a property tax assessment [due] at the end of the year. Now, they are late, they are subject to penalties and interest. And if not paid, we have notified them that in August (Jamestown) will be subject to a tax sale,” Smith said.
Cope said he’s not worried about the county selling the property because he believes a resolution can be reached. He said he would like to pay a portion of the tax bill – between $100,000 and $200,000 – to buy time to sell more properties.
“I understand the county has the majority of the money in its reserves to make that [bond] payment,” Cope said, adding he’s been in negotiations with attorney Lee Viorel of Lowther Johnson Attorneys at Law LLC, who is representing the county, on preventing a sale of Jamestown. Viorel declined to disclose details of the negotiations.
Cope said the NIDs are an effective economic tool because they help to keep property prices low. Cope said his residential lots range in price from $4,000 to $12,000, and that is only possible because the county absorbed the infrastructure costs upfront.
“I feel like Jamestown has been a success because the thing was a cow field 12 years ago, and it has $15 million worth of infrastructure in it,” Cope said, adding he’s personally invested more than $4 million on the project. “It’s built.”
Hickory Hills Marketplace in Springfield – another failed project of Larino’s – had a proposed NID attached to the roughly 46-acre development, but no bonds were issued in that case, Smith said.
“There was a proposed neighborhood improvement district out there, but there was never any funding placed in that NID,” Smith said.
“The developer never complied with all of the requirements for the bonds to be issued.”
The failure by Larino to secure Eau Claire, Wis.-based home-improvement store Menards as an anchor tenant at Wilson’s Creek and his Hickory Hills Marketplace, northeast of Chestnut Expressway and U.S. Highway 65, appeared to spell doom for the projects. After receiving four extensions on a $2.5 million payment and committing $225,000 in nonrefundable earnest money to Springfield Public Schools in connection with the sale of the Hickory Hills elementary and middle school, Larino terminated his purchase agreement on that property in a Dec. 7 letter to the district.
Larino did not return calls for comment on this story by press time.
According to Greene County Recorder Cheryl Dawson, the school district took ownership of the former Hickory Hills property on March 5.
“It would have remained in (Larino’s) name as long as he was maintaining the terms of the sales contract,” SPS Chief Financial Officer Steve Chodes said. “But once he defaulted on that, then we went through this process to get it back into the district’s name.”
The developments gone sour have left a bad taste in the county’s mouth, according to Smith, who said officials are not seeking any NID deals in the foreseeable future.
“I’m not saying it would never happen, but we need to get these settled first, and we don’t want to take on any further liability at this time,” Smith said. “That is something we would only do in trying to help economic development, but we have to manage that versus the taxpayer’s exposure to these things.”[[In-content Ad]]
