YOUR BUSINESS AUTHORITY
Springfield, MO
YOUR BUSINESS AUTHORITY
Springfield, MO
Some Springfield City Council members’ objections to a tax incentive program at Southern Hills Shopping Center have been a source of frustration for Curtis Jared, a developer who has ownership in the center via Southern Hills Plaza LLC.
Jared was co-petitioner with David O’Reilly, representing Southern Hills Investment Trust LLC, in a successful bid to establish a transportation development district in the 2900 block of East Sunshine Street, where the Southern Hills Shopping Center is located.
Jared said it was under the advice of city staff that Southern Hills officials applied for the TDD instead of another tax incentive measure, such as a community improvement district. The transportation project agreement proposed under the TDD and approved by council would fund parking lot improvements, road connections, stormwater improvements, sidewalks, landscaping and other work through the collection of a 1-cent sales tax from customers to the shopping center.
“The city was the one that mentioned the TDD route rather than the CID route,” Jared said. “We’re doing everything at the direction and guidance of the city.”
During the second reading of the bill to adopt a transportation project agreement at the June 26 meeting of Springfield City Council, two councilmembers, Brandon Jenson and Craig Hosmer, objected to the instrument. Jenson received clarification that public improvements from the project would make up less than 5% of the work completed. Additionally, the state statute that provides for a TDD stipulates that the transportation authority, in this case the city, would receive ownership of the project, but the Southern Hills measure includes no transfer of ownership.
Hosmer objected to the TDD partly on the grounds that he did not see it as a transportation project.
Jared said everyone seems to think they’re an expert when it comes to development.
“Everyone wants to say what should or shouldn’t be permitted,” he said. “Isn’t it better for the public that we have better stormwater, landscaping, traffic flow and sidewalks?”
He added that the shopping center was not built to today’s standards, and improving it is costly.
“People think the developer should absorb that cost, but it’s not that simple,” he said, noting tax incentives have been used in downtown Springfield, at Farmers Park, and for the new Costco and Buc-ee’s developments, among others. Similarly, he said, the Branson strip is a CID that is working to beautify the area, burying utility lines, making wider sidewalks and providing landscaping.
He added that the district would not take dollars away from anyone except taxpayers who choose to shop at Southern Hills and be assessed an additional sales tax.
“For whatever reason, the developer is the big, bad wolf every time they do something,” he said. “Everyone forgets, local developers live here. We’re not doing stuff to be detrimental. We’re doing stuff to enhance quality of life and bring better retailers.”
Jared was also critical of Springfield Business Journal’s coverage of the councilmembers’ objections, and specifically of a poll asking readers, “Do you agree with Springfield City Council’s approval of a transportation project agreement to improve infrastructure at the Southern Hills Shopping Center?” The answer from 64% of respondents was “no,” with 8% choosing the option “unsure” and 28% saying “yes.”
“When you put a survey out there, 99.9% of people don’t understand how it all works. Most people aren’t going to choose ‘don’t know,’” Jared said.
Another objection to SBJ’s coverage was offered at SBJ.net by a user identifying themself as “Doreilly.” The user wrote that it was unfortunate SBJ did not explain the economic benefit of the project 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 part of the TDD (approx. $2.9 million),” the user wrote.
The $2.9 million cost of the project was reported in previous SBJ coverage.
The user added that the TDD was approved in Greene County Circuit Court to use the 1% sales tax of only those consumers who choose to shop in Southern Hills.
“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,” Doreilly wrote. “Clearly they are viewing this in a glass half empty view.”
In a July 15 story reporting on the TDD court filing, the city’s chief litigator, Christopher Hoeman, said TDDs are like CIDs, but with a narrower transportation focus. At the time, he said the city still needed to develop its position on the proposal.
Amanda Ohlensehlen, the city’s director of economic vitality, said the TDD was at the request of the developer.
“Developers themselves have the choice of which types of programs they would like to activate,” she said at the time.
Moseley’s Discount Office Products was purchased; Side Chick opened in Branson; and the Springfield franchise store of NoBaked Cookie Dough changed ownership.
In this TDD matter, there seems to be confusion between the City and the Developer as to who said what. The real question is return and risk. At 1.9% sales tax, how long will it take for the taxpayers to recover the $2.9 million investment; especially, considering there is an projection that the public benefit is less than 5%--that is pretty skinny. I dare say that there isn't a development in town that does not have some Federal, State, or City incentive of some type.
The question to be answered is whether Mr. Jared and Mr. O'Reilly would have made t his investment without the $2.9 million--I wager yes. I would rather spend the $2.9 million on the CUP on Commercial Street. It will be a shame that that Commercial street apartment development fails and that silly ass footbridge goes forward.