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City Beat: Menards balks at Hickory Hills CID

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City beat from the Jan. 17 City Council meeting: For minutes and schedule, visit springfieldmo.gov/citycouncil
A Menards representative on Jan. 17 told Springfield City Council the company would bring 150 jobs to town if it is excluded from the Hickory Hills Marketplace Community Improvement District.

Developer Paul Larino of Larino Properties worked to get the CID established in April as a way to fund public infrastructure for the 46-acre development just north of Chestnut Expressway on the grounds of the former Hickory Hills Elementary and Middle School.

The Springfield site would be the fifth in Missouri for Eau Claire, Wis.-based Menards, which operates 262  home improvement stores in 13 Midwest states, according to Menards.com.

Council held a public hearing Jan. 17 on a bill that would amend the boundaries of the CID to exclude 16 acres for the proposed 162,000-square-foot Menards. Economic Development Director Mary Lilly Smith noted Menards has said it would not locate within the CID boundaries because the tax collected to fund improvements – up to 1 percent of sales – would put it at a competitive disadvantage.

Smith said the city could collect the sales tax at retail locations within the district’s boundaries for up to 30 years to reimburse developer expenses.

Menards spokesman Tyler Edwards told council it was ready to sign on as anchor tenant for Larino’s development with the passage of the amended CID bill.

“This would create 150 jobs … and we are happy to bring those to town,” Edwards said.
Citing resistance by a few members of the Commercial Street CID when it was formed in 2008, Councilman Thomas Bieker asked if such a move would create a precedent whereby others within a CID could expect to be removed from the boundaries.

Smith said city staff had recommended CID approval on C-Street because it was a developed area where a majority of property owners were calling for the improvements.

“In this case, (Hickory Hills Marketplace) is a developer-driven district,” Smith said, adding that Larino, the sole property owner, is calling for the change.

The amendment, Smith said, also would require less money to be raised through the CID tax, because the developer would be reimbursed only for the 370,000 square feet of land ceded to Greene County for infrastructure improvements. Larino has been working with the county to establish a Neighborhood Improvement District for road and infrastructure upgrades that would benefit surrounding areas. Previously, the CID was anticipated to reimburse more than $6 million to Larino Properties for infrastructure improvements, but now it only plans to collect $1.9 million.

Calling the extra tax a deal breaker, developer Larino told council the CID amendment was essential in moving the project forward.

Since acquiring the Hickory Hills property from Springfield Public Schools for $4.45 million in December 2010, Larino has missed an initial payment of $2.5 million and a second payment deadline in October. SPS board members then agreed to accept monthly installments of $12,500 and moved the lump sum payment deadline to April.

Supporting his plans, the Missouri Department of Transportation, Greene County and Springfield have pooled together resources to build an $8.8 million diverging diamond interchange at Highway 65 and Chestnut Expressway.

Councilman Doug Burlison said he planned to support the CID changes to help bring new jobs to town.

“I don’t want to throw any wrench in the project that could be problematic. … Welcome to Springfield,” Burlison said to Edwards.

No members of the public spoke against the amendment. Council is expected to hear the bill’s second reading and vote on the measure Jan. 29.

In Missouri, Menards operates in St. Joseph, Sedalia, Jefferson City and Columbia.

CU rate discounts
With the aim of fostering economic development, council unanimously passed a discounted electric rate schedule for City Utilities business customers that bring new energy demands to the city.

To qualify for the discounted rates, new or existing businesses must project additional usage of 300 kilowatts per month at peak times and an annual average of 150 kW. Discounted rates would be available for five years. Customers must maintain the load requirements each year and affirm that without the rider, they would not have decided to put the load on CU’s system.

For qualified businesses, the discounts are:
  • 25 percent in the first year;
  • 20 percent in the second year;
  • 15 percent in the third year;
  • 10 percent in the fourth year; and
  • 5 percent in the fifth year.
At a Dec. 12 public hearing, Digital Monitoring Products Chief Financial Officer Joe Reynolds and Buckhorn Inc. plant manager Larry Spilker told council the economic development rider would benefit the region.

“I think it’s great news for the community,” Reynolds said after last week’s vote, acknowledging that he was unsure whether DMP, which in May finished a 35,000-square-foot expansion of its 78,000-square-foot production facility in the Partnership Industrial Center, would qualify for a discounted rate. “My (objective) was to give the council some visibility into existing companies that are growing, and obviously with growth will come increased utility use.”

But more than helping existing companies, he said he thinks the new rate schedule could attract new businesses to town.

“It’s a dual approach, which is great,” he said.[[In-content Ad]]

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