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Southern Hills improvements are underway, with less than 5% calculated as direct public benefit, according to city officials. 
Karen Craigo | SBJ 
Southern Hills improvements are underway, with less than 5% calculated as direct public benefit, according to city officials. 

Council passes transportation project over objections of two members 

Posted online

Though the measure passed, the propriety of an ordinance to approve a transportation project agreement for the Southern Hills Shopping Center was questioned by two Springfield City Council members at the governmental body’s meeting last night. 

The council bill sought to forge an agreement between the city, the Southern Hills Shopping Center Transportation Development District, Southern Hills Investment Trust LLC and Southern Hills Plaza LLC to execute a transportation project agreement. 

In June 2022, Southern Hills Investment Trust LLC filed a petition to establish a transportation development district to pay for $2.9 million in improvements to the shopping center along East Sunshine Street. The project agreement allows a 1-cent retail sales tax to be applied by businesses in the district for up to 40 years. 

In previous Springfield Business Journal reporting, David O’Reilly, a co-owner of Southern Hills Investment Trust, said he had been encouraged by city staff to petition for a TDD instead of the more common community improvement district. A TDD is filed in municipal court instead of Cty Council. There are only three other TDDs on file with the state for Springfield: College Station, the Heer’s building and the east-west arterial covering Evans Road west of Highway 65. 

The council bill approved last night vests the city as the local transportation authority to approve the project. An explanation of the bill submitted by Senior City Planner Matthew Schaefer notes the revenue will fund various parking lot improvements, including connections to public roads, storm water improvements, construction of sidewalks and pedestrian pathways, construction of new driveways and parking lots, and work like grading, signage, landscaping and striping. 

During council discussion, newcomer Brandon Jenson raised the question of what percentage of funds were anticipated to be spent within the public right of way versus private property as part of the project. 

City Manager Jason Gage said public property improvements amounted to less than 5% of the project. Amanda Ohlensehlen, director of Economic Vitality, said those public improvements comprise landscaping and some sidewalk work. 

“I have some concerns about the interpretation of state statute and determining public benefit,” Jenson said. “I understand that the regulations are not very clearly worded, but it very clearly contemplates a public benefit. And so, could you help me understand how in staff’s determination there was found to be a sufficient and substantial public benefit to warrant this?” 

Ohlensehlen said Economic Vitality staff worked with the developer to help ensure the project would improve and increase property values, retain or create jobs and support the implementation of Forward SGF, the city’s comprehensive plan. 

“I guess that really gets to the crux of my question,” Jenson said. “So, if a developer were wanting to improve a piece of property that were similar in nature and it was a greenfield development, they would be required to bear these costs normally under their development – correct?” 

Jenson further noted that the statute allowing TDDs provides for transfer of ownership of the project to the city as transportation authority. City Attorney Rhonda Lewsader clarified that the city would receive no interest in the Southern Hills project except at most a temporary easement. 

“Just to recap, we have a proposal before us that has at best very minimal direct public benefit in terms of expenditures under the project, and we have a project that also does not seem to clearly satisfy the requirements of the statute of ownership of property,” Jenson said. 

He noted he supports redevelopment to improve public corridors, and the Southern Hills Shopping Center desperately needs the help. 

“But I can’t support a project that is as legally dubious as the one that is before us tonight,” he said. 

While Jenson raised the initial objection, veteran Councilmember Craig Hosmer took over the argument. 

Hosmer said the state’s TDD statute has an exhaustive definition of what projects are authorized. 

“It says bridge, street, roadway, highway access, road interchange, signage, signalization, parking lot, bus stop station, garage terminal, hangar – nowhere does it mention sidewalks, does it?” he said. “And it doesn’t ever say anything about landscaping.” 

Hosmer said the project does not meet the requirement of ownership being transferred to the public entity and is not a public project. 

“It’s not even a transportation project,” he said. “I think we’re trying to again drive a square peg into a round hole to give somebody taxpayer dollars.” 

Hosmer said if the measure passed, developers in the city would begin asking council for TDD projects outside of the parameters of the statute. 

“I think it puts us in a precarious situation,” he said. 

He added that if someone were to walk on the landscaping and fall down and get hurt, the city would be liable. Thus, the city has a statutory obligation to maintain the property. He noted as a lawyer, if he had a client who was injured on the property, he would sue the city. 

“This strains the statute, and I think it stretches the meaning of the word ‘transportation project,’” he said. “If landscaping is transportation, we’ve got a lot of transportation all over the city of Springfield.” 

Councilmember Matthew Simpson clarified that the TDD was initiated within the court by petition, and the city’s role is that of local transportation authority to provide next-level approval of the plan. 

Hosmer clarified that council is not required by court action to approve the project. 

“The court’s action has no precedent on us at all because we weren’t party to that,” Hosmer said. 

Lewsader agreed that the local transportation authority is not obligated to approve the project. 

Council approved the project by a 5-3 vote, with Jenson and Hosmer joined by Monica Horton in voting against it. Councilmember Derek Lee was absent. 

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Doreilly

Very unfortunate that SBJ didn’t provide more accurate representation of this development and the economic benefit to the city and taxpayers. The approx $7 million project, initially being funded entirely by the developer, will improve an important part of the East Sunshine corridor. Only the public access portion (parking, lighting, storm drainage, etc) will be partially supported by users of the shopping center through a 1% sales tax as a part of the TDD. (Approx $2.9million)

Had city council been privy to only SBJ reporting I’m sure this would not have passed.

Many communities are benefitting from TDD districts, much like a CID (community improvement district). For example, Columbia MO has between 15-20 TDD’s that have helped facilitate numerous developments. Many communities recognize the ongoing need for development and renovation of older areas. The economics of doing that properly don’t always allow for a project to become reality. With a program like TDD, which was approved in Greene County circuit court, a project can utilize the 1% sales tax of only those consumers who choose to shop there, and only for the public spaces.

For those council members who were opposed to utilizing all available tools to improve our aging corridors, I believe it is short sighted and bureaucratic to oppose proactive use of existing government programs. Clearly they are viewing this in a glass half empty view. We appreciate the majority of council who approved this TDD and only wish that SBJ was more of an advocate for development and renovation tools that will provide many benefits to Springfielians and shoppers for years to come. Thanks.

Wednesday, June 28, 2023
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