CENTER JUNCTION: WORK HINGES ON AGREEMENT

Repayment of interest on bonds to pay for improvements at Center Junction will be guaranteed by developer Jim Drury under a contract Drury plans to sign with local governments.

Drury will commit to paying up to $1 million if sales tax revenues from commercial development of his property at the interchange do not come up to projections.

Capturing sales tax revenue from development at the intersection is crucial to the governments' plan to expedite the improvements at the Interstate 55 and U.S. 61 interchange, commonly known as Center Junction, between Cape Girardeau and Jackson.

The contract to provide the $1 million bond is to be signed with a transportation corporation composed of the cities of Jackson and Cape Girardeau and Cape Girardeau County.

Formation of the transportation corporation awaits approval of the plan by the Missouri Highway and Transportation Commission, which will consider the project at its meeting either in September or October.

If the corporation is certified, general revenue bonds will be issued and a contract will be signed between the state commission and Drury. Construction of the estimated $5 million in improvements then could begin in 2001 instead of waiting until 2004, the year the Missouri Department of Transportation has budgeted the project.

The general revenue bonds would service the debt until MoDOT buys back the improvements. The local governments would pay the interest on the bonds, which would be due Dec. 31, 2005.

Drury has estimated that the commercial properties will generate $78 million in sales by 2005, which would produce about $1.1 million in tax revenue. Under the contract, he would have until 2007 to meet his projections and avoid making up whatever difference is owed in interest.

If sales tax revenue is insufficient to pay off the interest by the time the bonds are due, the cities and county would have to front the money, according to Chauncy Buchheit, director of economic development for the Southeast Missouri Regional Planning and Economic Development Commission in Perryville. The commission is acting as the consultant on the project.

In that case, Buchheit said the transportation corporation would charge Drury interest. Whatever that amount might be is included in the $1 million Drury has committed to, he said.

Buccheit said the contract does not stipulate what will be developed or the amount of development that is to occur.

The $1 million does not equal the current interest estimate of $1.2 million for the project. Buccheit said the parties in the transportation corporation could wait to start the project until $1 million will cover the cost, could seek more money from Drury or could proceed "based on some risk if it is to their advantage."

The projected interest rate might be lower at the time the bonds are issued or the improvements might cost less than expected, he added.

Bob Hahn, vice president of development for Drury's Mid-America Hotels, could not be reached for comment.

Steve Wilson, city administrator for Jackson, said he hopes formation of the transportation corporation "will serve as a footprint so we can move to the East Main Street-Coker Road interchange." He referred to the I-55 interchange Jackson and Cape Girardeau want to see built quickly but which MoDOT has not given a priority. Coker Road is an as-yet-unbuilt street that approximately aligns with County Road 618 near the Southeast Missouri State University farm on the Cape Girardeau side of the interstate.

"What we're doing here is a positive thing," Wilson said. "The three entities are working together to make a major safety improvement in the area as well as provide commercial development."