Cape asking for projects for possible TIF district

Before the city of Cape Girardeau can determine whether it should proceed with forming a tax-increment financing district, it is reaching out to developers possibly interested in downtown redevelopment projects through a request for proposals.

The solicitation for requests comes almost three weeks after action by the city council authorized its distribution. Assistant city manager Molly Hood said the request for proposals is the first step in a lengthy process necessary for creating a TIF district.

It also is a good way to determine whether the move is warranted.

"We don't want to go through the trouble of creating a TIF district if there's no interest in it," she said.

The district is bounded by Mason Street and Highway 74 on the north and south and spans east to west from Sprigg Street to the Mississippi River. The district comprises about 305 acres, according to the request.

Tax-increment financing is a method to encourage redevelopment in a blighted or conservation area, as defined by Missouri law. Establishing a TIF district would give the city another tool to help developers with rehabilitation costs and breathe new life into some of downtown's vacant or deteriorating buildings, supporters have said.

TIF allows the master developer -- in this case, the city -- to collect the increment gained in property taxes between the current value and the improved value, as well as 50 percent of the economic activity taxes, including sales taxes and taxes on utilities.

The city takes the revenue and invests it in approved developments such as parking, lighting, infrastructure and rehabilitation.

The request asks applicants to provide a project description including the address and parcel number, plus a description of the proposed project's size, scope and phasing.

Also required is the developer's background and experience, along with detailed financial information.

Knowing the real numbers is key because it determines whether the project qualifies for assistance through tax-increment financing.

Proposed projects must meet the "but for" test to be approved, said Cape Girardeau Area Chamber of Commerce president and CEO John Mehner -- so called because the project would not be financially possible but for the assistance of TIF.

"In other words, we can't do this because the numbers don't work, and it's impossible for us to spend this much on these properties without this help," Mehner said.

A but-for affidavit is required with the proposal with a pro forma financial statement showing the returns on investment with and without TIF assistance.

Per the request, the city is accepting proposals for all or a portion of the district and may accept proposals from single or multiple developers.

Besides meeting the financial requirements, the city asks that proposals conform with priorities laid out in the city's comprehensive plan and downtown strategic plan.

Developers can propose a mixed bag of projects, from commercial or retail to residential.

Objectives for the district noted in the request include the redevelopment and rehabilitation of "obsolete, decadent and blighted areas," or areas that could become blighted if redevelopment does not occur; promoting sustainable and economically feasible redevelopment that will generate long-term sales, utility and property tax revenue; and enhancing the image of the city by promoting high-quality development or building rehabilitation.

Mehner said the request is open to all developers who feel qualified, and he's hoping to see some "visionary plans" pitched.

The request has not been out long, so the city has yet to hear from any developers. But Hood said she believes the interest is out there.

"I think we will receive proposals. I'm not sure about the timing, but we know there are projects out there percolating, and this might be the tool to help bring them to fruition," she said.

The request did not include a deadline for developers to submit projects.

Hood said it will remain open, even after the city begins receiving proposals, because there are a number of project areas within the boundaries that focus on specific areas and could generate interest from different developers at different times.

There are eight proposed project areas, which include the riverfront, the Haarig Commercial District on Good Hope Street and Common Pleas Courthouse and its surrounding property on Lorimier Street.

srinehart@semissourian.com

388-3641

Pertinent address:

Cape Girardeau, Mo.