Cape council approves tax-increment financing for downtown development

The Cape Girardeau City Council approved tax-increment financing Monday for a $4.59 million project to redevelop two historic Main Street buildings.

Developers Jason Coalter and Dustin Richardson, managing members of Centurion Development LLC, requested tax-increment financing to redevelop a vacant building at 1 N. Main St. and another structure at 20 N. Main St.

The developers want to convert the 1 N. Main building to retail/restaurant and event spaces.

The other building would be converted for retail and residential uses.

Centurion Development requested tax-increment financing (TIF) that would reimburse the company for up to $1.54 million of project costs over the next 23 years, city officials said.

Mayor Harry Rediger said the project would not occur without such a funding mechanism. He called it “a very exciting development for our downtown and our city.”

Cape Girardeau Area Chamber of Commerce president John Mehner said the TIF will allow redevelopment in an area that has “fallen into disrepair.”

Mehner said the vacant building was “home to pigeons.”

In addition to tax-increment financing, the developer also is seeking federal and state historic tax credits for the 20 N. Main St. building.

Deputy city manager Molly Hood wrote in an agenda report to the council the TIF “allows for the stabilization and renovation of two major historic downtown buildings — one of which has sat vacant for a number of years. The other building hs been underutilized.”

Hood said, “The redevelopment of these buildings will increase the assessed valuation, prevent conditions from deteriorating further and will enhance the economic viability of the downtown area.”

Under the agreement, Centurion will receive 95 percent of the increased property taxes and nearly 50 percent of the increased city sales-tax revenue resulting from the development while the TIF is in effect, Hood said.

In addition to existing tax revenue generated from the properties before redevelopment, the city would receive the remainder of the increased sales and property taxes. That increased tax revenue could be used for future public projects, Hood said.

After 23 years, the city would benefit from all of the added sales and property tax revenue the development would generate, she said.

As part of the agreement, Centurion must complete the development by Dec. 31, 2019, Hood said.

Five project areas are included in the downtown TIF district’s boundaries, which covers 305 acres. It’s roughly outlined by Mason Street and Highway 74 on the north and south and Sprigg Street to the Mississippi River on the east and west.

Hood said the Centurion development is in redevelopment project area 2, which includes the Main Street area.

Tax-increment financing is a method to encourage redevelopment in a blighted area or conservation area, as defined by Missouri law.

Missouri law defines a conservation area as one in which 50 percent or more of the structures are 35 years of age or older. It is an area that could be at risk of becoming blighted in the future, according to state statute.

The council approved an overall redevelopment plan for the downtown TIF district in January 2016.

In April 2016, the City Council approved tax-increment financing for the Marquette Tech redevelopment project at Broadway and Fountain Street.

mbliss@semissourian.com

(573) 388-3641