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Marquette tax breaks may be over $1 million
Redevelopment of the dilapidated Marquette Hotel in Cape Girardeau could generate more than $1 million in real estate tax breaks for the project's developer over the next decade.
The tax savings could add up to more than $1.8 million at the end of 25 years, most of which would have gone to the Cape Girardeau School District.
School officials want to take a look at the redevelopment plan even though they understand they don't have the final say. That's up to the Cape Girardeau City Council, which is tentatively scheduled to hold a public hearing on the redevelopment plan on Nov. 18.
The plan first must go before the Planning and Zoning Commission, which is slated to review the proposal at 7 p.m. Nov. 6 at City Hall.
City officials and a consultant to the developer say real estate tax breaks over the next quarter-century are essential to moving ahead with plans to turn the 74-year-old tan brick building on Broadway into state offices and retail space.
Ultimately, it will mean more tax revenue for the school district and other taxing entities, city officials said. The consultant, Fred Lafser of St. Louis, estimates annual real estate taxes on the renovated building will total $111,868 after 25 years with more than $75,000 going to the school district.
By comparison, the site currently generates only $1,898 in real estate taxes a year. The school district gets $1,278 of that, Lafser said.
"We are not asking anyone to have their tax revenues reduced, we are just asking them to hold off an increase," said Lafser, whose company, Lafser & Associates, helped put together the redevelopment plan for Prost Builders of Jefferson City, Mo.
Prost Builders bought the six-story building in July after landing a state contract to provide office space. The formerly luxurious hotel, which has been vacant for 21 years, could be renovated and reopened as an office building within a year.
Want to look at plan
School officials are glad the old building will be fixed up. But the tax abatement proposal still worries school officials.
"We are always concerned when property taxes that have been voted in for the school district are diverted," said Rob Huff, the schools' business manager.
Huff said school officials want to know if the project could proceed without a tax abatement.
"It's important to be assured that the development would not have occurred anyway. If that happens, you are basically putting money in the developer's pocket that would have gone to the school district," Huff said.
"What we would really like is to benefit now and down the road," he said.
The developer -- under the tax abatement plan -- would avoid paying an estimated $109,970 in taxes in 2004, which is expected to be the first full year of operation for the renovated building. That's money that otherwise would go to everything from the school district to the county health department.
Huff's unsure what district officials will conclude about the project after they've looked at all the numbers. "We don't want to be a Scrooge," he said.
Mayor Jay Knudtson said he promised tax abatements to the developer. The only question to be decided is the amount of the tax breaks, he said.
Without such an incentive, there would be no redevelopment, he said. The building would have remained an eyesore that could have cost the city $1 million to tear down, the mayor said.
Lafser said the developer plans to spend $8 million to renovate the building and provide parking.
$1,898 a year
Under the redevelopment plan, the developer would pay $1,898 a year in real estate taxes from 2004 through 2013. The developer then would pay 50 percent of the real estate taxes owed annually over the next 15 years, ending in 2028, or $56,883 a year. After that, the developer would pay 100 percent of the real estate taxes.
The plan involves setting up a redevelopment corporation under Missouri law.
For Prost Builders to qualify for the tax abatement, the city council must find that the development area is blighted, Lafser said.
Both city and school officials say that shouldn't be a problem.
Lafser, who inspected the building, said the hotel has water damage on all upper floors and the former dining room, and the windows are in need of repair.
Pigeons have roosted in the vacant building for years. Lafser said the hotel is full of pigeon droppings, peeling lead-based paint, mold, asbestos tiles and asbestos insulation around old pipes.
Lafser has reported to the city council that all of those items contribute to disease and are a factor -- along with the building's age, unusable plumbing, heating and cooling systems and minimal tax revenue -- in showing the structure is blighted.
The city ruled that the site was blighted in 1984 as part of overall downtown redevelopment plans. It later condemned the building and threatened to tear it down if then-owner Ruby Bullock didn't make repairs.
But Lafser said the city council needs to approve a new blighted designation because so much time has passed.
335-6611, extension 123