annual report on tif projects - independence, missouri

City of Independence Tax Increment Financing Commission

Annual Report on TIF Projects Fiscal Year 2004-2005

Prepared by the

Community Development Department Independence, Missouri

November 2005

Tax Increment Financing Report – FY 2004-2005 City of Independence, Missouri

Tax Increment Financing Commission

City of Independence, Missouri

Commission Membership

City of Independence Mr. Pat Campbell, Chairman

Mr. William Chappelow Ms. Selene Madrid

Ms. Sue Shirk Mr. Paul Weston

Independence School District

Mr. Blake Roberson, Independence School Board Mr. Chuck Donaldson, Alternate Mr. Lenord Westbrook, Alternate

Blue Springs School District

Mr. Paul Consiglio, School Board Member Mr. Gary Jones, Assistant Superintendent

Kansas City School District

Ms. Ruth Bauch Mr. William “Bill” Rogers

Raytown School District

Mr. Robert Phillips Mr. Steve Knabe

Other Taxing Districts

Mr. Mark Trosen, Development Administrator, Jackson County Ms. Gloria Fisher, Director of Finance, Jackson County

Mr. Richard Wilding, Mid-Continent Library Ms. Ann Marie Wheeler, Kansas City Library


Administration

The Tax Increment Financing Commission is provided administrative and professional staff support by the Community Development

Department and other City Departments of Independence, Missouri

Community Development Department City Hall

111 East Maple Independence, Missouri 64050

816.325.7415 Fax: 816.325.7400

City Staff with responsibilities for TIF activities include:

Bruce Hahl

Community Development Director

James C. Harlow Director of Finance and Administration

Allen Garner

City Counselor

Howard Penrod Public Works Director


Table of Contents

Executive Summary …………………………………………...

Exhibit A – Map of TIF Locations …………………………...

Exhibit B - TIF Projects Recap ………………………………

Bolger Square …………………………………………………...

Crackerneck Creek ……………………………………………..

Cornerstone Apartments ……………………………………..

Drumm Farm……………………………………………………..

Eastland …………..........................................................................

Hartman Heritage ………………………………………………

Hy-Vee ………………………………………………….................

Mid-Town Truman Road Corridor…………………………...

Mount Washington……………………………………………...

Noland Road Auto Plaza ………………………………………

North Independence …………………………………………..

Recovery Sales Outlet ………………………………………...

Santa Fe …………………………………………………………..

Sterling Village ………………………………………………….

i

iv

v

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3

5

7

9

11

13

15

17

19

21

23

25

27


i

Executive Summary

Executive Summary Tax Increment Financing Fiscal Year 2004-2005

There were 14 active Tax Increment Financing (TIF) districts in the City of Independence during the 2004-2005 fiscal year. This report is a recap of the key components of the TIF program and a status report on each project.

One new TIF project was approved by the City Council in the 2004-2005 fiscal year with an anticipated $171.3 million in project costs, of which $73.5 million will be assisted with TIF revenue. The 14 TIF projects are projected to generate $ 867 million in development activity supported by $ 184 million in TIF revenue. TIF revenues are expected to account for approximately 21 % of the total project costs, including public infrastructure, site development, land acquisition and professional fees, as well as other approved expenses. Of the 14 existing TIF districts, only five are financed through both the issuance of bonds and the “pay-as-you-go” method; included are Bolger Square, Hartman Heritage Park, Eastland Center, Santa Fe and Crackerneck Creek. The remaining nine districts are financed strictly with the “pay-as-you-go” form of TIF financing where the City collects TIF revenues and reimburses the developer as funds are available.

On the average, TIF districts are expected to recoup approved expenses in 16 years, individual TIF projects range from eight years to the maximum 23 years in recouping expenses from the incremental increases in property taxes and economic activity taxes. The current City policy encourages TIF projects to repay expenses in approximately 12 years. The existing TIF districts in Independence are relatively new with the average district being only 5.5 years old. The individual projects were approved by the City Council as recently as one year ago to as long ago as 11 years. Although several districts are expected to need the maximum 23 years to recoup expenses, should tax revenues exceed projections, these districts would repay approved expenses earlier than anticipated.

The 14 TIF districts are projected to increase the valuation of their respective properties by 42 times. The original valuation of all projects totaled $ 7.4 million. At the successful conclusion of existing TIF projects, the valuation is expected to be $310 million, or 42 times the value if no development occurred and valuations remained stagnant. The districts generated $592,283 in property taxes and approximately $625,000 in sales taxes prior to designation as TIF districts. At the conclusion, the TIF districts are projected to produce over $28 million dollars each year in sales taxes and generate $13.2 million per year in property taxes.


ii

Executive Summary

As of the close of fiscal year 2004-2005, the 14 existing TIF districts collected over $21.5 million in TIF revenue. Slightly more than $11 million was derived from property taxes (PILOTS) and the remaining $10 million was a result of the 50% share of increased sales taxes. The two most recent TIF developments, Cornerstone Apartments and Crackerneck Creek, have no revenues to report as of the close of fiscal year 2004-2005. The TIF districts are located primarily in the south and southeast portions of the city where 11 of the 14 districts are located. The remaining three districts are located north of 23rd Street. Exhibit A, located on page iv of this report depicts the location of each TIF district. Detailed descriptions of each TIF project are presented in this report following the Executive Summary. A composite table summarizing all existing TIF projects is located on page v.

City Policy

It is the policy of the City to consider judicious use of the Tax Increment Financing (TIF) tool for projects that will contribute to the public benefit by constructing public improvements which eliminate blight, strengthen the employment and economic base of Independence, increase property values and tax revenues, reduce poverty, create economic stability, upgrade older neighborhoods and assist in implementing the Comprehensive Plan and economic development strategy of the City of Independence.

The Tax Increment Financing Commission (TIFC) of the City of Independence is responsible to the City Council and acts in an advisory capacity in reviewing and subsequently making recommendations to the City Council on matters regarding TIF proposals. The Community Development Department of the City provides administrative and professional staff support to both the Commission and the Council. The City adopted “The City of Independence, Missouri Tax Increment Financing Application Procedures, Policy Considerations and Application Form” outlining the guidelines for applying for Tax Increment Financing and the policies that guide the City Council, the TIF Commission and City staff as they review and make recommendations concerning the adoption of TIF financing in the City of Independence. The guidelines were adopted by Resolution 4148 in May of 1995 and revised in February 1998 with Resolution 4484.


iii

Executive Summary

How TIF’s Work

Tax Increment Financing is a funding tool where approved development expenses are financed through the increased taxes generated by the development activity. The taxes are generated through “payments in lieu of taxes (PILOTS)”, commonly known as property taxes and 50% of the “economic activity taxes (EATS)”. Economic activity taxes can include sales taxes, earnings taxes, and food and beverage taxes. Eligible expenses include extraordinary site improvements and infrastructure improvements necessary to make the project a feasible one for private development. The “extraordinary” or ”unusual” development costs provide the “but for” argument that if public assistance did not occur, otherwise necessary and desirable development projects would not take place. As required by State law, all TIF revenue received by the City is deposited into Special Allocation Fund Accounts and is maintained separately from all other City accounts. TIF project areas must qualify as a blighted area, conservation area or as an economic development area as defined by State Statutes. The City may issue revenue bonds or reimburse eligible project costs on a “pay-as-you-go” basis where eligible expenses are reimbursed to the developer as the City receives TIF revenues. An example of Tax Increment Financing (TIF) is where an otherwise undevelopable site currently generates $2,000 per year in property taxes with no expectation that it will produce more in the future. This same site has a small business producing $800 each year in sales taxes. Due to the site having extraordinary development costs, the site remains in its current use. With the TIF funding tool, the unusual expenses of development are paid with the increase in tax revenue. The site is developed as preferred and the property taxes increase to $15,000 each year and the retail businesses are collecting $500,000 in sales taxes each year. All of the increase in property taxes (100%), or $13,000 per year, is deposited to a Special Allocation Fund to reimburse approved expenses. As for the sales taxes, 50% of the City’s portion of the increase, or $249,600 per year, is also deposited in the Special Allocation Fund for reimbursement. The first $800 of sales tax revenue and the remaining 50% in increased sales tax revenue, or $249,600 per year, is directed as all regularly collected sales taxes. This arrangement continues until the approved expenses are paid in full or until the maximum 23 year time limit on TIF projects expires, whichever occurs first. As is the case with TIF projects in Independence, should a project pay off the approved development expenses prior to the 23rd year, the City’s portion of the tax increment continues to be collected and is directed to infrastructure improvements in the older portions of the City.


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v

City of IndependenceTax Increment Financing Commission

Annual Report on TIF ProjectsFiscal year 2004‐2005

Crackerneck Creek

Cornerstone Apts

Noland Road ‐ Independence

HondaHy‐Vee

Mt. Washington

North Independence‐WinterStone Golf Course

EastlandDrumm Farm (Golf Strategies)

Sterling VillageHartman

Heritage CenterSanta Fe

Bolger Square

Recovery Sales Outlet

Mid‐Town Truman Road Corridor

Totals

Council District 3 3 4 4 1 2 3 3 4 3 4 3 4 1

Plan Approval Date October 2004 March 2003 December 2002 July 2002 September 2000 May 2000 January 2000 December 1999 June 1998 May 1998 December 1997 May 1997 December 1996 October 1994

Plan Amendment Date n/a n/a n/a n/a n/a n/a

March 2000 & August 2002

December 2003 August 2001 n/aMay 2003 & August 2003

August 2000 & November 2000 April 1999 August 2000

February 1996 May 2000

Projected Life of TIF plan 23 years 12 years 8 years 20 years 16 years 10 years 18 years Variable by phase 23 years 16 years 17 years 10 years 12 years 23 years

Total Development Cost $171,308,865 $35,989,719 $13,281,380 $7,716,273 $8,722,700 $40,592,210 $254,002,000 $39,218,000 $4,408,323 $113,026,000 $25,567,017 $31,053,269 $41,350,578 $80,810,850 $867,047,184

Reimbursable Project Costs $73,558,398 $3,540,347 $1,865,000 $3,372,751 $1,481,856 $4,159,910 $40,348,000 $3,982,000 $424,374 $22,181,000 $7,500,000 $6,092,765 $7,315,450 $8,380,910 $184,202,761

Percent to Total (TIF costs/Total Development) 42.9% 9.8% 14.0% 43.7% 17.0% 10.2% 15.9% 10.2% 9.6% 19.6% 29.3% 19.6% 17.7% 10.4% 21.2%

Financing MethodBond

pay‐as‐you‐go Pay‐as‐you‐go Pay‐as‐you‐go Pay‐as‐you‐go Pay‐as‐you‐go Pay‐as‐you‐goBond

Pay‐as‐you‐go Pay‐as‐you‐go Pay‐as‐you‐goBond

Pay‐as‐you‐goBond

Pay‐as‐you‐goBond

Pay‐as‐you‐go Pay‐as‐you‐go Pay‐as‐you‐go

PILOTS

Original Assessed Valuation $327,707.0 $371,600 $2,310,400 $1,797,000 $66,500 $6,154 $269,000 $305,964 $56,660 $9,640 $1,433,040 $8,630 $402,154 $0 $7,364,449

Original Property Tax $24,984.0 $24,869 $195,922 $153,344 $5,765 $490 $20,000 $23,988 $4,075 $722 $107,335 $708 $30,081 $0 $592,283

Projected Assessed Valuation at close of TIF $36,600,000.0 $6,222,500 $4,450,640 $3,375,000 $1,920,000 $17,311,872 $173,316,000 $10,000,000 $873,111 $28,000,000 $14,380,000 $5,184,000 $3,918,364 $4,494,481 $310,045,968Projected Annual Property Tax at close of TIF (23 years) $2,723,882.0 $416,471 $284,231 $287,887 $166,464 $1,369,751 $3,730,351 $590,000 $62,803 $2,097,200 $450,000 $425,000 $293,093 $308,321 $13,205,454

Amount Collected to date $0 $0 $15,333 $71,702 $36,964 $33,141 $2,355,300 $352,455 $11,379 $2,587,285 $46,128 $2,219,894 $0 $3,452,489 $11,182,070

EATS

Original Annual Sales Tax $0 $0 $349,263 $0 $0 $0 $25,000 $0 n/a $0 $52,469 $0 $197,715 $0 $624,447Projected Annual Sales Tax at close of TIF (23 years)* $9,500,000 $91,066 $657,629 $1,098,672 $53,084 $89,067 $9,209,264 $80,768 n/a $3,013,864 $1,518,415 $2,336,322 $806,992 $6,125 $28,461,268

Amount Collected to date $0 $0 $529 $372,458 $81,007 $72,121 $4,659,495 $45,442 n/a $1,192,742 $283,901 $2,776,564 $816,322 $74,757 $10,375,338

Square Feet of New Retail‐Office Space 660,000 none none 110,000 n/a not available 550,000 n/a n/a 635,000 plus hotel 220,000 180,000 75,000 n/a

Square Feet of New Industrial Space n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 600,000 n/a

Number of New Housing Units n/a 420 n/a n/a n/a n/a n/a 145 50 n/a 8 n/a n/a 82

Development StatusUnder

ConstructionFully Operational (Apartments)

Operational & Under

Construction

Operational & Under

ConstructionUnder

Construction

Operational & Under

Construction

Operational & Under

ConstructionOperational &

Under Construction Starting up

Operational & Under

Construction Starting upFully

Operational Starting up Fully Operational

* Total Projected sales taxes were estimated by staff based on EATS projectionn/a: not applicable Exhibit B

TIF Comparison Chart 2004-2005

Bolger Square

1

Tax Increment Financing Project Summary Bolger Square The Bolger Square TIF district was approved by the Independence City Council in May of 1997.1 Two additional plan amendments were approved in April of 1998 and April of 1999.2 The project consists of 32 acres on the northwest corner of 39th Street and Bolger Road. The redevelopment project includes one major retail anchor tenant with additional adjacent retail space, and five out lots resulting in 180,000 square feet of development. Other benefits include over $1.6 million of improvements to Crackerneck Road, Bolger Road and 39th Street adjacent to the development and at the M-291 interchange including a traffic signal and landscaping. It should be noted that the amended plan placed one of the original anchor tenants (100,000 square feet) in a non-TIF area, thereby allowing all of the tax revenue (property tax and sales tax) to be immediately available to the appropriate taxing jurisdictions. The Bolger Square TIF project is fully operational with anchor tenants including Target and Dick’s Sporting Goods. Restaurants include Bob Evans, TGI Friday’s and Longhorn Steakhouse. Kick’s 66, a convenience mart and gasoline station is located at the intersection of Crackerneck and 39th Street.

The TIF portion of the Bolger Square project cost approximately $31,053,269 to build with reimbursable expenses accounting for 19.6%, or $6,092,765 of the total cost. Nearly all of the approved expenses were directed to public infrastructure and site development costs. Extraordinary expenses were

due to the topographic and soil conditions in the area and excessive outcroppings requiring significant development costs for rock excavation and grading. The development area was deemed a “blighted” area as defined by


Bolger Square

2

the State of Missouri statutes for TIF projects. The Blight Study concluded that both Bolger Road and Crackerneck Road were “built to an older Jackson County standard and would not hold up, subsequent to development and utilization.” The report further explains that “the current configuration of streets to the east of the subject (Bolger Square) has resulted in congestion surrounding the interchange of M-291 and 39th Street…and further development in the (39th Street) corridor would therefore create substantial congestion without modifications to the current layout.” The report points out that the site has several agricultural outbuildings with significant levels of disrepair and were likely to continue deteriorating. As of June 30, 2005, $2,219,894 in property taxes (PILOTS), $2,776,565 in (EATS) and $78,690 in interest was collected from the Bolger Square TIF project. The project is now in its sixth year since the amended TIF plan was approved by the City Council and is expected to conclude in another three years, one year ahead of the original projection. The Bolger Square TIF is one of five current projects financed by both TIF Bonds and the “pay-as you-go” method. Prior to the districts establishment, The Bolger Square project area had an original property valuation of $8,630. The most recent assessed valuation indicated the project area had increased by nearly 5 million dollars. It was projected that upon complete build-out of the development, the project area will have an assessed valuation of $5,184,000, or 600 times the original level. Originally the TIF district produced no sales tax revenue, and is expected to ultimately generate 2.3 million dollars per year in sales tax revenue. 1Ordinance Number 13625 – Bolger Square Redevelopment Plan – May 19, 1997 2 Ordinance Number 13881 – First Amended Redevelopment Agreement – April 20, 1998 Ordinance Number 14187 – First Amended And Restated Bolger Square Tax Increment Financing Plan – April 19, 1999


3

Cornerstone Apartments

Tax Increment Financing Project Summary Cornerstone Apartments The Cornerstone Apartments TIF district was approved by the Independence City Council in March of 2003.1 The project consists of 42 acres on the southwest corner of 39th Street and Jackson Drive immediately east of Independence Center shopping mall. The development project includes 13 three-story buildings with 420 apartment units, a clubhouse, swimming pool, fitness center, Jacuzzi and covered parking. Additionally, the project will include a 7,000 square foot restaurant on the northern two acres facing 39th Street. The project will provide soil remediation, storm drainage and utility line improvements as well as access improvements along 39th Street. The Cornerstone Apartments were completed and ready for occupancy in late 2003. The TIF portion of the Cornerstone Apartments project is expected to cost approximately $36 million to build with reimbursable expenses accounting for 9.8% or $3,540,347 of the total cost. All of the approved expenses are to be directed to public infrastructure and site development costs. Extraordinary expenses were estimated due to the topographical and “costly soil

conditions”…”not suitable for construction and will require an inordinate amount of fill and compaction to support development.” The soil study concluded the site would require considerable excavation to remove heavy rocks throughout the site and backfill to make the site suitable for construction.


4

Cornerstone Apartments

The topography requires that a retaining wall be constructed for the proposed drive and parking and to protect the wetlands, avoid the 100-year flood zone and conform to the 39th Street grades. The development area was deemed a “blighted” area as defined by the State of Missouri statutes for TIF projects. The Blight Study concluded that the development area was historically passed over for development because of the extraordinary development costs, its modest frontage and irregular configuration along 39th Street. The report also indicated the Blue River, with its heavily wooded terrain and steep topography is considered unsanitary and unsafe. Prior to development, illegal dumping occurred on the site. The property has been underutilized and has been unable to generate adequate real estate taxes. As of June 30, 2005, there have been no property taxes (PILOTS) or sales taxes (EATS) collected from the Cornerstone Apartments TIF project. The apartment complex portion of the project was completed in late 2003 with occupancy occurring shortly thereafter. The project is expected to repay approved development expenses in 12 years. As with all TIF projects, approved expenses are paid from PILOTS and EATS until they are paid in full or until the maximum 23 year time limit on TIF projects expires, whichever occurs first. The Cornerstone Apartments TIF project is financed using the “pay-as-you-go” method where the developer is reimbursed for eligible expenses as the PILOTS and EATS revenues are received by the City. Prior to the districts establishment, The Cornerstone Apartments project area had an original assessed property valuation of $371,600. It is anticipated that upon complete build-out of the development, the project area will have an assessed valuation of $6,222,500, or nearly 17 times the original level. Originally, the TIF district produced no sales taxes, where it is expected to ultimately generate over $91,000 per year in sales tax revenue. 1 Ordinance Number 15353 – Amended Cornerstone Tax Increment Financing Plan, the Cornerstone Redevelopment Project and Designating the Cornerstone Tax Increment Financing Project Area – March 3, 2003.


Crackerneck Creek

5

Tax Increment Financing Project Summary Crackerneck Creek The Crackerneck Creek TIF District Project and Plan was approved by the Independence City Council on October 18, 20041; the redevelopment project, plan2 and authorization to enter into a redevelopment agreement was approved on December 20, 20043 This was followed by the execution of the Redevelopment Agreement signed on February 9, 20054. The project consists of 192 acres located at the southwest intersection of I-70 & I-470. The development is bordered on the south by Missouri 40 Highway extending west to Lee’s Summit Road. The redevelopment project includes a 160,000 square foot Bass Pro Shops retail store, restaurant, hotel and three adjoining commercial areas providing more than 500,000 square feet of additional retail space. The development also includes more than 80 acres of city-owned park space, two miles of walking trails, a 15-acre lake and a 60-foot waterfall. The project is scheduled to be completed in phases beginning in the fall of 2006 when the Bass Pro Shops store is due to open. The developers of the project will transfer ownership of the lake, public right-of-way, the 25-acre Bass Pro retail store site and a five-acre hotel site to the City; and will construct all on-site public improvements. Bass Pro will lease the retail store

site from the City for an initial 20 years, and may renew the lease for up to an additional 24 years. Bass Pro will construct its retail store and is responsible for construction of a hotel. The Crackerneck Creek project is estimated to cost $171.3 million including all public and private improvements with reimbursable expenses accounting for $73.6 million. Extraordinary expenses are due to the topographic and


Crackerneck Creek

6

soil conditions, regional drainage problems, floodplain bicsection and inadequate access to the site. The development area was deemed “blighted’ as defined by the State of Missouri statutes for TIF projects, in a previous project application that remains valid today. The finding of blight included inadequate street layout conditions that endanger life or property, a menace to public health, as well as other elements. The Crackerneck Creek TIF project will be repaid with both city TIF revenue as well as up to $40 million in state TIF revenue.

As if June 30, 2005 no TIF revenue has been collected due to the project being in the early stages of development. The project is expected to repay approved development expenses in 23 years. The Crackerneck Creek TIF project is one of five current projects financed by both TIF Bonds and the “pay-as-you-go” method. Prior to the districts establishment,

the Crackerneck Creek project area had an original property valuation of $327,707. It is projected that upon complete build-out of the development, the project will have an assessed valuation of approximately $36.6 million or nearly 112 times the original level. Originally the TIF district produced no sales tax revenue, and is expected to ultimately generate over $9.5 million per year in sales tax revenue. 1 Ordinance number 15874 – Crackerneck Creek Tax Increment Financing Plan, designation of the Development Area and Blight Designation – October 18, 2004 2 Ordinance number 15928, 15929, 15930, 15931 and 15932 – Crackerneck Creek Redevelopment Project and Plan (Areas 1,2,3,4 and 5) – December 20, 2004 3 Ordinance number 15933 – Authorization to execute the Crackerneck Creek Tax Increment Financing Redevelopment Agreement – December 20, 2004 4 Crackerneck Creek Tax Increment Financing Agreement – February 9, 2005


7

Drumm Farm

Tax Increment Financing Project Summary Drumm Farm – Golf Strategies The Drumm Farm TIF district was approved by the Independence City Council in December 19991 with one plan amendment approved in August 20012 and December 20043. The project consists of 320 acres located along Lee’s Summit Road, north and west of Kiger Road. The proposed project includes a residential community of 145 single-family villas, an 18-hole golf course, clubhouse and maintenance buildings. The golf course and clubhouse is open to the public and the project provides flood control improvements benefiting surrounding areas. The Drumm Farm TIF project is partially complete with the golf course fully operational, and approximately 75 homes are completed or under construction.

The TIF portion of the Drumm Farm project is expected to cost approximately $39,218,000 to build with reimbursable expenses accounting for 10%, or $3,982,000 of the total cost. Nearly all of the approved expenses are directed to public infrastructure and site development costs including construction of sewer lines, street improvements on Lee’s Summit Road and flood control measures. The Drumm Farm TIF project qualifies under the Economic

Development qualification of the State Statutes for TIF financing in that it will provide a residential community unlike anything found in the City, as well as provide needed recreational facilities. Thriving residential areas with recreation like Drumm Farm are key factors in attracting and retaining businesses within the city.


8

Drumm Farm

As of June 30, 2005, $352,455 in property taxes (PILOTS), $80,884 in sales taxes, of which half, or $45,442 (EATS), and $3948 in interest was collected from the Drumm Farm TIF project. The project is now in its sixth year since the TIF plan was passed by Council and the golf course is built and opened, per the redevelopment agreement signed in 2001. The remaining

residential portion of the plan will be finalized as prevailing market conditions permit. The reimbursement of development costs are expected to be completed by 2018. The Drumm Farm TIF is financed using the “pay-as-you-go” method where the developer is reimbursed for eligible expenses as the PILOTS and EATS revenues are received by the City. Prior to the districts establishment, the Drumm Farm project area had an original property valuation of $305,964 and is projected that upon complete build-out of the development, the project area will have an assessed valuation of $10,000,000, or 32 times the original level. Originally, the TIF district produced no sales taxes, where it is expected to ultimately generate $80,000 per year in sales tax revenue. 1 Ordinance Number 14366 –Golf Strategies Tax Increment Financing Plan, the Golf Strategies Redevelopment Project and Golf Strategies Tax Increment Financing Project Area – December 6, 1999 2 Ordinance Number 14884 – First Amended Golf Strategies Redevelopment Agreement – August 20, 2001 3 Ordinance Number 15917 – First Amendment to the First Amended Golf Strategies Redevelopment Agreement – December 13, 2004


9

Eastland Center

Tax Increment Financing Project Summary Eastland Center The Eastland Center TIF district was approved by the Independence City Council in January of 20001. Three additional plan amendments were approved in March of 20002, August of 20023, and December of 20034. The project consists of 212 acres on the south side of Interstate 70 between M-291 and the Little Blue Parkway. The project is a mixed-use development consisting of big-box, retail specialty shopping, restaurants and financial institutions. The Eastland Center project is currently under construction as outlying areas continue to add businesses. The major components are in place with Lowe’s Home Improvement Center and Costco complete and operating. Retail businesses to date include Comp USA, EB Games and Joslin’s Jewelry. Available restaurants include Chipotle Grill, Outback Steakhouse, Red Robin, and Panera Bread. Other developments include Bank of America, Medical Imaging, Holiday Inn Express and North Star Bank.

The Eastland Center TIF project is expected to cost approximately $254,002,000 to build with reimbursable expenses accounting for 15.9%, or $40,348,000 of the total. All of the approved expenses are for public infrastructure, design services and site development costs. Approximately $11 million of the total reimbursable TIF amount is earmarked for seven public

projects including: Little Blue Parkway: $5 million; 40 Highway and Noland Road Redevelopment Study: $100,000; Landscaping along Little Blue Parkway from I-70 to 40 Highway: $700,000; Police, Fire and Community Center: $3.5 million; Little Blue Trace Park improvements: $1 million; Land for Education Learning Center: $425,000; and improvements to R.D. Mize and Duncan Road intersection: $500,000. Extraordinary expenses were due to unstable soil conditions, the need to relocate a sanitary sewer line and unusual earthwork due to excessively flat areas that prevent drainage and areas where the site drops dramatically creating excessive costs to mitigate.


10

Eastland Center

The development area was deemed “blighted” as defined by the State of Missouri statutes for TIF projects. The Blight Study concluded that due to proximity to the Blue River the site would require additional earthwork to mitigate the undesirable conditions. Additionally, the area suffered from inadequate road and highway layout, and needed bridge construction across the Little Blue River. It was

determined that the physical condition of the property and the excessive development costs “comprise a substantial economic liability.” The report adds “These costs would tend to significantly impede development of the site and concluded it to be cost-prohibitive in relation to development of the site by conventional means.” The report further describes the interior network of streets as inadequate to accompany any significant development in the area, that “costs to reverse this condition are extraordinary in comparison to typical development costs for a site this size” and “existing conditions of the project area prohibit the development and implementation of the City’s Interstate-70/Selsa Road corridor economic development strategy,” and thus also “comprise(s) a social liability.” As of June 30, 2005, over $2.35 million in property taxes (PILOTS), $4.65 million in EATS and $48,745 in interest was collected from the Eastland Center TIF project. The project is now in its fifth year since the original TIF agreement was approved by Council and is expected to conclude in another 13 years. The Eastland Center TIF is one of four current projects financed by both TIF Bonds and the “pay-as-you-go” method. Prior to the districts establishment, The Eastland Center project area had an original property valuation of $269,000. The most recent assessed valuation indicates the project area has increased by over $7 million. It is projected that upon complete build-out, the project area will have an assessed valuation of $173 million, or 644 times the original level. Originally, the TIF district produced $25,000 in sales tax revenue where, upon completion, it is expected to generate $9 million per year in sales taxes. 1 Ordinance Number 14393 – Eastland Center Tax Increment Financing Plan, Redevelopment Plan and Redevelopment Agreement – January 3, 2000 2 Ordinance Number 14895 –First Amended Eastland Center Redevelopment Agreement – March 22, 2000 3 Ordinance Number 15182 – Second Amended Eastland Center Redevelopment Agreement – August 12, 2002 4 Ordinance Number 15627 - Third Amended Eastland Center Redevelopment Agreement – December 15,, 2003


Hartman Heritage Park

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Tax Increment Financing Project Summary Hartman Heritage Park The Hartman Heritage Park TIF district was approved by the Independence City Council in May of 1998.1 Two additional plan amendments were approved in May and August of 2003.2 The project consists of 57 acres on the northwest corner of Little Blue Parkway and Interstate-70 plus an additional 6.5 acres tract on the northeast corner of the same intersection. The project contains a combination of a hotel/convention center with restaurant, 15,000 square feet of meeting space, a 219,000 square foot retail center plus out-parcels for additional restaurants and office space development. The Hartman Heritage project is fully constructed with retail businesses continuing to fill in where space is available. Retail businesses to date include Beauty Brands, Dress Barn, Linen’s and Things and Stein Mart. Restaurants include Macaroni Grill, On the Border Cantina and O’Charley’s as well other theme concepts. The office development includes State Farm Insurance and Realty Executives. Additional retail businesses, Thomasville Furniture, Bassett Furniture Direct, and Central Perk Café are a sampling of businesses that opened more recently.

The TIF portion of the Hartman project is expected to cost approximately $113 million to build with reimbursable expenses accounting for 19.6%, or $22 million of the total cost. The vast majority (98%) of approved expenses are for public infrastructure and site development costs. Public improvements include $2 million for the Little Blue Parkway; $1.3 million for construction of a sanitary

sewer main and $126,000 for a water main extension.


Hartman Heritage Park

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Extraordinary expenses are due to soil conditions in the area that prohibit the construction of buildings more than two or three stories high. Additional expenses occur for driving piles that support larger buildings in alluvial soil conditions running 30 to 40 feet deep in the project area. The development area was deemed a “blighted” area as defined by the State of Missouri statutes for TIF projects. The Blight Study concluded that due to the proximity to the Blue River the site would incur additional expenses to remove it from the flood plain. Additionally, the area suffered from inadequate street layout, and that upon completion of the freeway interchange, the platting would be obsolete. It was determined that the physical condition of the property and the excessive development costs “comprise a substantial economic impediment to development.” The report further describes that the existing conditions of the project area prohibit the development and implementation of the City’s Interstate 70/Selsa Road corridor economic development strategy and thus also “comprise(s) a social liability”.

As of June 30, 2005, approximately $2.6 million in property taxes (PILOTS) and nearly 2.4 million in sales taxes, of which half, or $1.19 million (EATS) was collected from the Hartman TIF project. The project is now in its seventh year since the TIF plan was passed by Council and is expected to conclude in another nine years. The Hartman Heritage TIF is one of four current projects financed by both a TIF Bond and the “pay-as-you-go” method.

Prior to the districts establishment, The Hartman Heritage project area had an original property valuation of $9,640. The most recent assessed valuation indicated the project area had increased by nearly six-million dollars. It is projected that upon complete build-out of the development, the project area will have an assessed valuation of $28 million or 2,900 times the original level. Originally, the TIF district produced no sales tax revenue, where it is expected to ultimately generate over three-million dollars per year in sales tax revenue. 1 Ordinance Number 13904 – Hartman Heritage Park Tax Increment Financing Plan – May 18, 1998 2 Ordinance Number 15436 – First Amended and Restated Hartman Heritage Redevelopment Agreement – May 19, 2003 Ordinance Number 15505 – First Amendment to Hartman Heritage Park Tax Increment Financing Plan – August 4, 2003


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Hy-Vee

Tax Increment Financing Project Summary Hy-Vee The Hy-Vee TIF district was approved by the Independence City Council in July of 2002.1 The project consists of 10.23 acres on the northeast corner of Noland Road and 40 Highway and is partially located within the Kansas City, Missouri city limits. The redevelopment project includes the 80,260 square foot Hy-Vee grocery store and an adjacent Westlake Hardware Store, currently under construction with nearly 30,000 square feet retail space. the Westlake store is scheduled to open in Novmember 2005. Public infrastructure improvements include a new signalized intersection on 40 Highway, the alignment of 40 Highway and Noland Road intersection and new sanitary sewers, waterlines and storm sewers. The Hy-Vee grocery store opened in spring of 2004; the Westlake store is scheduled to open in November 2005. Construction is underway for a HyVee gasoline station, however this part of the development is within the boundaries of Kansas City, Missouri. The TIF portion of the Hy-Vee project is expected to cost approximately $7,716,273 to build with reimbursable expenses accounting for 43.7%, or

$3,372,751 of the total cost. The majority of reimbursed expenses are slated to pay for public infrastructure and site development costs with smaller amounts directed to professional fees and property acquisition costs. Extraordinary expenses were due to obsolete building and roofing materials, substantial amounts of illegal dumping on the property and improper drainage on the site. The development

Tax Increment Financing Report – Fiscal Year 2004-2005 City of Independence, Missouri

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Hy-Vee

area was deemed a “blighted” area as defined by the State of Missouri statutes r TIF projects. A blight study was conducted in the early part of 2002 and concluded that the larger of the two buildings was in very poor structural condition while situated at a high profile intersection of the City. This created a negative impact on the surrounding neighborhood as well as being a hindrance to housing accommodations. The two buildings on the site experienced prolonged vacancy along with vagrancy and vandalism. The existing topography and inadequate storm drainage on the site were deemed a hindrance to redeveloping the site. The study further determined that the site was underutilized and redevelopment had the capacity to produce additional property and sales taxes. As of June 30, 2005, $71,702 in property taxes (PILOTS), over $372,000 in sales taxes (EATS) and $2749 in interest was collected from the Hy-Vee TIF project. It is estimated it will take approximately 20 of the 23 years permitted by law to make reimbursement of all approved expenses. The Hy-Vee TIF project is financed by the “pay-as-you-go” method where the developer is reimbursed for eligible expenses as the PILOTS and EATS revenues are received by the City. Prior to the districts establishment, the Hy-Vee project area had an original property valuation of $1,797,000. It is projected that upon complete build-out of the development, the project area will have an assessed valuation of $3,375,000 or nearly twice the original level. At the time the project was approved, the TIF district produced no sales tax revenue, where it is expected to ultimately generate approximately $1.1 million per year in sales tax revenue. 1 Ordinance Number 15160 – Hy-Vee Tax Increment Financing Plan, Redevelopment Project and Tax Increment Financing Project Plan – July 15, 2002

Tax Increment Financing Report – Fiscal Year 2004-2005 City of Independence, Missouri

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Mount Washington Cemetery

Tax Increment Financing Project Summary Mount Washington Cemetery The Mount Washington Cemetery TIF district was approved by the Independence City Council in September of 2000.1 The project consists of a 229 acre cemetery bounded by Truman Road on the south, Independence Avenue and State Highway 24 on the north, Brookside Avenue on the east and Blue Ridge Blvd. on the west. The redevelopment project includes the renovation of the Mount Washington Cemetery chapel, construction of a mausoleum, and infrastructure improvements throughout the cemetery including lighting, landscaping, bridges, sewers and drainage systems. Additionally, there will be construction of public historic archive theater and kiosks, clean up of Rock Creek and the addition of pedestrian paths and benches. There will also be improvements to the adjacent public right-of way and funding for administrating the redevelopment of the nearby Fairmount business district through the Northwest Community Development Corporation. The Mount Washington TIF project has continued operating with construction of the mausoleum completed. The TIF portion of the Mount Washington project is expected to cost approximately $8,722,700 to build with reimbursable expenses accounting for 17%, or $1,481,856 of the total cost. Nearly all of the approved

expenses were directed to public infrastructure and site development costs. Extraordinary expenses were due to the general condition of the cemetery with the majority of structures being more than 50 years old and in need of repair or replacement. The roadways through the cemetery are in disrepair as well. The development area was deemed a “Conservation” area as


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Mount Washington Cemetery

defined by the State of Missouri statutes for TIF projects. An Existing Conditions Study concluded that the redevelopment area meets the statutory requirement due to “eighty-six percent of the structures within the boundaries of the Mount Washington Redevelopment Area have an age of 35 years or more.” Long Chapel and the cemetery office are in a deteriorated condition including vandalism, broken windows, substandard roof, inadequate plumbing and electrical service. The existing road system through the cemetery is deteriorated making passage by visitors hazardous. Concrete curbing is in disrepair and in some places no longer present. Rock Creek has considerable erosion and debris creating unsafe conditions. High water during rainfall and lack of storm water management within the cemetery has deteriorated existing bridges. As of June 30, 2005, nearly $35,000 in property taxes (PILOTS) was received into the TIF fund. The fund has received $81,007 in economic activity taxes (EATS), or 50% of the sales taxes collected from the Mount

Washington TIF district and $1,795 in interest. The project is now in its fifth year since the TIF plan was passed by Council and is expected to conclude in another 11 years. The longer than desirable term length was deemed acceptable due to the plan providing a stimulus to an older portion of Independence. The Mount Washington TIF is financed with the “pay-as-you-go” method where the developer is reimbursed for eligible

expenses as the PILOTS and EATS revenues are received by the City. Prior to the districts establishment, Mount Washington project area had an original property valuation of $66,500. The most recent assessed valuation indicated the project area had increased by nearly $125,000. It is projected that upon complete build-out of the development, the project area will have an assessed valuation of $1,920,000, or 28 times the original level. Originally, the TIF district produced no sales tax revenue, where it is expected to ultimately generate approximately $53,000 per year in sales taxes. 1 Ordinance Number 14608 – Mt. Washington Tax Increment Financing Plan and Mt. Washington Redevelopment Project – September 18, 2000


Mid-Town Truman Road Corridor

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Tax Increment Financing Project Summary Mid-Town Truman Road Corridor The Mid-Town Truman Road Corridor TIF district was approved by the Independence City Council in October 1994.1 Two additional plan amendments were approved in February 1996 and May of 2000.2 The MTRC redevelopment area consists of approximately 630 acres located directly west of Independence Square. The area is bounded approximately by Highway 24, Spring Street, Pacific Avenue and Forest Avenue. The TIF district area of the MTRC project is limited to the Independence Regional Health Center site. Due to its sale to Columbia Health Systems, a for-profit corporation, the property is assessed property taxes used to finance approved expenses in the surrounding redevelopment area. The Mid-Town Truman Road Corridor TIF project is fully operational. Property taxes generated by the for-profit hospital enterprise are used to fund the MTRC redevelopment project. The goals of the plan are to achieve neighborhood revitalization, remedy obsolete and substandard areas, to correct substandard housing and building conditions and make infrastructure

improvements. The Mid-Town Truman Road Corridor project is expected to cost approximately $80,810,850 with reimbursable expenses accounting for 10.4%, or $8,380,910 of the total cost. Approved expenses are to be directed to new housing construction, rehabilitated rental and owner occupied property, and the adaptive reuse of a gasoline station, the construction of a neighborhood center and administrative


Mid-Town Truman Road Corridor

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expenses. Extraordinary expenses were due to the deteriorating conditions within the development area, the decreased presence of owner occupied housing and the effective decline of housing values. The development area was deemed a “blighted” area as defined by the State of Missouri statutes for TIF projects. The Blight Study concluded the advanced age of structures is a contributing factor to blight. The report found that approximately 71% of the structures in the area were built prior to WWII, with more than 7% built prior to 1900. Environmental deficiencies with infrastructure exist due to outmoded design, obsolescence and deterioration throughout the area; included are inadequate streets, sidewalks, lighting, electrical distribution systems, curbs and gutters. The corridor is characterized as having a high concentration of low to moderate income households when compared to the city as a whole. Nearly 68% of residents in the redevelopment area are renters, compared to the City of Independence with approximately 31% renter occupied units. As of June 30, 2005, $3,452,489 in property taxes (PILOTS), $74,757 in sales taxes (EATS) and $58,240 in interest was collected from the Mid-Town Truman Road Corridor TIF area. The project is now in its 11th year since the TIF plan was originally passed by Council and is expected to conclude in another 12 years. The Mid-Town Truman Road Corridor TIF is financed using the “pay-as-you-go” method where the approved expenses are reimbursed as the PILOTS and EATS revenues are received by the City. Prior to the districts establishment, the Mid-Town Truman Road Corridor TIF area had an original property valuation of zero, due to the hospitals’ tax exempt status. The most recent assessed valuation indicated that the project area had increased to slightly over 4.5 million dollars, and is similar to the projected valuation of the property. Originally, the TIF district produced no sales tax revenue, where it is expected to ultimately generate approximately $6,000 per year in sales tax revenue. 1 Ordinance Number 12904 – Mid-Town Truman Road Corridor Redevelopment Corporation Redevelopment Plan, Mid-Town Truman Road Corridor Redevelopment Corporation Redevelopment Project and Mid-Town Truman Road Corridor Project Area as Tax Increment Financing Area – November 21, 1994 2 Ordinance Number 13249 – Supplemental Redevelopment Agreement with the Mid-Town Truman Road Corridor Redevelopment Corporation – February 5, 1996 Ordinance Number 14486 – Amended Mid-Town Truman Road Corridor 353 Development Plan – May 15, 2000


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Noland Road Auto Plaza

Tax Increment Financing Project Summary Noland Road Auto Plaza The Noland Road Auto Plaza TIF district was approved by the Independence City Council in December 2002.1 The project consists of approximately 10 acres on the east side of Noland Road at 32nd Street. The project area will be redeveloped into an automobile dealership. The first portion of the Noland Road TIF project, including Independence Honda and Independence Lincoln Mercury Mazda was completed in 2003. The TIF portion of the Noland Road project is expected to cost approximately $13,281,380 to construct, with reimbursable expenses accounting for 14%, or $1,865,500 of the total cost. Nearly all of the approved expenses were directed to property acquisition and relocation costs. Other expenses included public infrastructure and site development costs. Extraordinary expenses were due to the site previously operating as an automobile dealership and required substantial updating to current automobile dealership standards.

The development area was deemed a “blighted” area as defined by the State of Missouri statutes for TIF projects. The Blight Study concluded that buildings within the redevelopment area were at least 30 years of age and therefore lack standard safety elements including effective storm water collection, gas


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Noland Road Auto Plaza

meter location and adequate curb construction. The area has deteriorating site improvements resulting from age, natural elements and lack of maintenance. Most of the existing buildings do not meet the standards of the Americans with Disabilities Act nor are they equipped with modern fire protection systems. The Honda Car Company indicated the dealership does not meet their corporate standards and would close and relocate the dealership to another area outside of Independence, leaving a vacant and obsolete car facility at the entrance to the “Miracle Mile” automobile dealership district. As of June 30, 2005, $15,333 was collected in property taxes (PILOTS),$529 in EATS and $515 in interest was collected from the Noland Road TIF project. The development is expected to repay the approved expenses within seven years and has a 13 year maximum time limit. The Noland Road TIF is financed by the “pay-as-you-go” method where the developer is reimbursed for eligible expenses as the PILOTS and EATS revenues are received by the City. Prior to the districts establishment, The Noland Road TIF project area had an original property valuation of $2,310,400. It is projected that upon complete build-out of the development, the project area will have an assessed valuation of $4,450,640, or nearly double the original level. Originally the TIF district produced nearly $350,000 in sales tax revenue, where it is expected to ultimately generate approximately $650,000 per year in sales tax revenue. 1 Ordinance Number 15310 – Noland Road Auto Plaza Tax Increment Financing Plan and Noland Road Auto Plaza Redevelopment Project – December, 16, 2002


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North Independence

Tax Increment Financing Project Summary North Independence The North Independence TIF district was approved by the Independence City Council in May of 2000.1 The project consists of approximately 140 acres on the southeast and northeast corner of Kentucky Road and M-291. When complete, the redevelopment project will include an 18-hole golf course, clubhouse and maintenance buildings plus construction of 4,500,000 square feet of underground industrial park space. The plan includes the extension of sanitary sewer service and improvements to Kentucky Road and construction of a neighborhood park near Elm Grove Elementary School. The North Independence TIF project is under construction with the golf facility fully operational and the underground industrial park undergoing continued construction. The TIF portion of the North Independence project is expected to cost approximately $40,592,210 to build with reimbursable expenses accounting for 10.2%, or $4,159,910 of the total cost. Nearly all of the approved expenses were directed to public infrastructure and site development costs. Extraordinary expenses were due to the lack of adequate irrigation and drainage on the site, the hilly terrain and location over a limestone mine that demanded additional earthmoving, drainage and irrigation work as well as landscaping over and above the norm.

The development area was deemed a “blighted” area as defined by the State of Missouri statutes for TIF projects. The Blight Study concluded that the redevelopment area had deteriorated site improvements, that adjacent parcels had vacant and deteriorated structures and the site failed to meet minimum property standards due to lack of


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North Independence

paved drives, paved off-street parking and lack of any landscape covering producing erosion and downstream sedimentation. There was also the presence of illegal trash and tire dumping, illegal deer hunting and failure to dispose of deer remains properly. As of June 30, 2005 there were $33,141 in property tax (PILOTS) revenues received, $144,242 in sales taxes, of which half, or $72,121 (EATS) received and $456 in interest collected from the North Independence TIF project. The project is now in its fifth year since the TIF plan was passed by Council and is expected to conclude in another five ears, bringing it within the 12 year time horizon desired by the City. The North Independence TIF is financed using the “pay-as-you-go” method where the developer is reimbursed for eligible expenses as the PILOTS and EATS revenues are received by the City.

Prior to the districts establishment, The North Independence project area had an original property valuation of $6,154. It is projected that upon complete build-out of the development, the project area will have an assessed valuation of $17,311,876 or 2,800 times the original level. Originally the TIF district produced no sales tax revenue where it is expected to ultimately generate $ 89,000 per year in sales tax revenue.

1 Ordinance Number 14482 – North Independence Tax Increment Financing Plan and the North Independence Redevelopment Project – May 15, 2000


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Tax Increment Financing Project Summary Recovery Sales Outlet The Recovery Sales Outlet TIF district was approved by the Independence City Council in December 1996.1 An additional plan amendment was approved in August of 2000.2 The project consists of 47 acres on the northwest corner of 35th Street and Noland Road. The redevelopment project proposes new construction of approximately 670,000 square feet of retail, office and warehouse/industrial space and relocation of the existing RSO facility. The project includes public infrastructure improvements to Noland Road, the extension of Lynn Court to Weatherford Road, and new street and rail crossing at 33rd Street, improvements to railroad crossings at 35th Street, 31st Street and Osage Street. The Recovery Sales Outlet TIF project is in the starting-up phase with the existing Recovery Sales Outlet retail facility in full operation. The Public Works Department reports that the rail crossing at Noland Road across from Truman High School, including storm sewer, paving and railroad crossing gate is complete. The traffic light will be installed when development inside the RSO facility creates demand for signalization.

The TIF portion of the Recovery Sales Outlet project is expected to cost $41,350,578 to build with reimbursable expenses accounting for 17.7%, or $7,315,450 of the total cost. All of the approved expenses will be directed to public infrastructure costs. Extraordinary expenses


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are due to the large amounts of infrastructure improvements necessary and high costs associated with these improvements. The development area was deemed a “blighted” area as defined by the State of Missouri statutes for TIF projects. The Blight Study concluded that the existing streets cannot adequately handle the traffic generated by the businesses in the area. The undeveloped areas within the redevelopment area do not have adequate access to Noland Road or any public street, thus impeding redevelopment of the property. The signalization and barriers at rail crossings and inadequate visibility exiting onto Noland Road presents a hazardous condition. The existing Recovery Sales Outlet facility is approximately 40 years old and is deteriorating and requires demolition. As of June 30, 2005, no property taxes (PILOTS) have been received into the TIF fund. The fund has received over $816,000 in economic activity taxes (EATS), or 50% of the sales taxes collected and $37,440 in interest from the Recovery Sales Outlet project. The project is now in its fifth year since the amended TIF plan was passed by Council. The Recovery Sales Outlet TIF is financed with the “pay-as-you-go” method where the developer is reimbursed for eligible expenses as the PILOTS and EATS revenues are received by the City. Prior to the districts establishment, The Recovery Sales Outlet project area had an original property valuation of $402,154. The most recent assessed valuation indicated the project area had decreased in assessed valuation by $87,619. It is projected that upon complete build-out of the development, the project area will have an assessed valuation of $3,918,364, or nearly 10 times the original level. Originally, the TIF district produced $ 197,000 in sales tax revenue, where it is expected to ultimately generate approximately $800,000 per year in sales tax revenue. 1 Ordinance Number 13490 – Recovery Sales Tax Increment Financing Redevelopment Plan and Recovery Sales Tax Increment Financing Redevelopment Project – December 2, 1996 2 Ordinance Number 14579 – Amended Recovery Sales Tax Increment Financing Redevelopment Plan and Redevelopment Agreement – August 21, 2000


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Santa Fe Trail

Tax Increment Financing Project Summary Santa Fe Trail The Santa Fe Trail TIF district was approved by the Independence City Council in December of 1997.1 Two additional plan amendments were approved; August 2000 and November of 2000.2 The project consists of 29 acres bounded by Noland Road on the east, the Union Pacific Railroad on the west and south of Southside Blvd. The redevelopment project proposes to include 220,000 square feet of new retail/commercial space and approximately eight new residential units and related off-site public improvements. The Santa Fe Trail TIF project is in the “starting up” phase where some grading has occurred, however, no new structures have been built. The developer is in the process of marketing the site in an effort to acquire an anchor tenant for the development. The TIF portion of the Santa Fe Trail project is expected to cost approximately $25,567,017 to build with reimbursable expenses accounting for 26% or $6,684,523 of the total cost. Nearly all of the approved

expenses were directed to property acquisition and public infrastructure. Extraordinary expenses were due to more than 108,000 square feet of existing structures in the TIF area being obsolete and in disrepair requiring demolition to accommodate any redevelopment. The TIF area consists of 32 parcels of property owned by 26 property owners, all of which needed to be acquired and cleared prior to redevelopment. It is also noted


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Santa Fe Trail

that environmental problems are characteristic in several portions of the TIF area. The development area was deemed a “blighted” area as defined by the State of Missouri statutes for TIF projects. The Blight Study concluded that over 85% of the area was built more 40 years ago with very few structural improvements. As most building codes in effect 40 years ago would be considered substandard today, the age of the structures indicate that many of the buildings would not meet current building, electrical and plumbing codes. Virtually every street within the development area is between four and six feet narrower than current city standards resulting in the need for pavement widening and an overlay to correct improper drainage problems. The area is also deficient in storm sewers, curbs, gutters and sidewalks. As of June 30, 2005, $46,128 in property taxes (PILOTS), $3,542 in EATS revenue, $280,359 in motor vehicle taxes and $12,708 in interest for a total of $342,737 was collected from the Santa Fe Trail TIF project. The project is now in its fifth year since the amended TIF plan was passed by Council and is expected to conclude in another 12 years. The Santa Fe Trail TIF is one of five current projects financed by both TIF Bonds and the “pay-as-you-go” method. Prior to the districts establishment, The Santa Fe Trail project area had an original property valuation of $1,433,040. The most recent assessed valuation indicated the project area had increased by just under $124,000. It is projected that upon complete build-out of the development, the project area will have an assessed valuation of $14.4 million, or 10 times the original level. Originally the TIF district produced approximately $50,000 per year in sales tax revenue, where it is expected to ultimately generate approximately $1.5 million per year in sales tax revenue. 1 Ordinance Number 13807 – Santa Fe Neighborhood Tax Increment Financing Plan – December 22, 1997 2 Ordinance Number 14565 – Santa Fe Neighborhood Redevelopment Agreement – August 7, 2000, and Ordinance Number 14647 – Santa Fe Neighborhood Redevelopment Project – November 6, 2000


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Sterling Village

Tax Increment Financing Project Summary Sterling Village The Sterling Village TIF district was approved by the Independence City Council in June of 1998.1 The project consists of 13 acres on the west side of Sterling Avenue north of Sheley Road. The redevelopment project has cleared seven substandard residential structures and will construct 17 four-plex town-homes in addition to the one existing four-plex, one-story unit. Site amenities include a walking trail and retaining the wooded area on the western portion of the site. The developer submitted a new site plan for the project after the close of the fiscal year. The TIF portion of the Sterling Village project is expected to cost

approximately $4,408,323 to build with reimbursable expenses accounting for 9.6% or $424,374 of the total cost. Nearly 90% of the approved expenses were directed to property acquisition and extraordinary expenses were due to the excessive slope (8%) located throughout the site.

The development area was deemed a “blighted” area and “Conservation” as defined by the State of Missouri statutes for TIF projects. The Blight Study concluded that the existing housing was located excessively close to Sterling Avenue resulting in unsafe conditions from steep driveways and shallow building setbacks with inadequate buffering, landscaping or screening. Additionally, the original home construction from post-WWII was in poor condition and did not meet current standards for safety. More than 50% of the homes were more than 35 years of age and were considered obsolete in


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Sterling Village

today’s housing market. The structures required significant repairs that were greater than the financial capabilities of the area’s residents. The report also indicated that the majority of the site was vacant and unsupervised with evidence of illegal dumping in the creek concluding that the potential economic benefit of the site cannot be achieved without redevelopment. As of June 30, 2005, $11,379 in property taxes (PILOTS) and $51 in interest has been collected from the Sterling Village TIF project. The project is now in its seventh year since the TIF plan was passed by Council and is expected to require the full 23 years to repay approved expenses. The Sterling Village TIF is financed using the “pay-as-you-go” method where the developer is reimbursed for eligible expenses as the PILOTS (payment in lieu of taxes) revenues are received by the City. Prior to the districts establishment, the Sterling Village project area had an original property valuation of $56,660. It is projected that upon complete build-out of the development, the project area will have an assessed valuation of $873,111, or 15 times the original level. 1 Ordinance Number 13937 – Sterling Village Tax Increment Financing Plan, Sterling Village Plan and Sterling Village Tax Increment Financing Area – July 6, 1998


annual report on tif projects - independence, missouri

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