Cape Council approves TIF project; issues bonds for police station, fire station and indoor sports complex projects

The Cape Girardeau City Council approved tax-increment financing Monday night for the Marquette Tech redevelopment project.

The vote was 6-0. Ward 1 Councilman Joseph Uzoaru abstained to avoid a possible conflict of interest. Uzoaru owns the Broadway Federal Building that sits across the street from the proposed development.

Council members enthusiastically supported the tax-increment plan. Two city residents expressed their opposition to the funding mechanism, arguing against the use of tax money to aid the development.

But Mayor Harry Rediger said, "It will provide jobs. It will produce income. It will produce taxes."

He said as a result of the redevelopment project at Broadway and Fountain Street, "that whole corner will come alive."

Tax increment financing is an economic development incentive tool used across the country that applies the increased tax revenue produced by the development and applies it back to the project rather than doling it out to the usual taxing entities. The tax entities continue to get the revenue at the rates applied to the property before the project. Once the TIF expires, the tax entities once again get the entirety of the revenue.

A TIF is intended to help redevelop aging and deteriorating buildings, but should only apply if officials are convinced the project could not proceed without public assistance.

Developers of the downtown redevelopment project asked for a maximum of $2.49 million in tax-increment financing, known as TIF, spread over 23 years to help fund their $20 million project.

Deputy city manager Molly Hood said the request was developed based on tax calculations provided by the Cape Girardeau County assessor's office.

Under the proposal, the development group led by Jeffrey Maurer of Mayson Capital Partners would receive 90 percent of the increased property taxes and 50 percent of the economic-growth-in-activity taxes, which includes sales taxes.

The tax revenue would be returned to the developers to help pay for the project, Hood said before the council meeting.

The development group announced last week it planned to renovate the former Marquette Hotel into a high-tech hub for startup technology companies and turn the H-H Building and the adjacent Marquette Center into a Marriott "Courtyard" Hotel.

According to the approved agreement, 10 percent of the increase in property-tax revenue from the development would be placed in a city-managed fund and could be used for other programs and projects, she said.

At a study session before the regular meeting, Maurer told the council without tax-increment financing and tax credits, the proposed $20 million project would not be feasible.

Hood, the deputy city manager, said that city staff have reviewed information provided by the developers and believe the project would not happen without a TIF.

Maurer said that developers also plan to seek state and federal historic tax credits. In addition, the developers will seek to take advantage of federal New Markets tax credits designed to aid development in economically distressed areas.

Maurer said the developers hope to convince entities, which have been approved for such tax credits, to invest in the project.

Rediger called the Marquette Tech project a "gigantic, game-changing development" for Cape Girardeau's downtown.

"We don't lose any income on this. We actually gain through sales taxes and jobs," he said.

Developers have estimated the project will bring as many as 300 guests and workers to the downtown neighborhood daily.

In other business, the council voted to issue more than $25 million in special-obligation bonds to fund construction of a new police station, a new fire station and an indoor sports complex.

Some of the bond revenue also would go to refinance at a lower interest rate about $6 million worth of 2009 revenue bonds used for park improvements, including construction of the city's water park.

As for the issuance of bonds, city finance director John Richbourg said the bonds are listed at a value of $25.4 million, but would actually raise some $28 million as structured.

The funding mechanism would provide $11 million for construction of the indoor sports complex and $3 million for construction of a new fire station on Lexington Avenue,

The bonds would provide $7.53 million toward construction of an $11 million police station. City tax revenue from the casino operation would fund the remainder of the cost of the project, Richbourg said.

The bonds would be paid off over 20 years, ending in 2036.

mbliss@semissourian.com

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