City manager: TIF sparks major redevelopment downtown

Tax-increment financing has sparked major redevelopment in Cape Girardeau's downtown, city manager Scott Meyer told the local school board Monday.

Two projects have been approved for TIFs since April 2016, which has spurred $25.6 million in private investment, Meyer said.

"We think the downtown TIF has been successful," he said.

With the TIF incentive, a developer can receive a percentage of the increased property taxes and sales taxes generated by that new development to recover some of the project expenses.

That means local taxing entities such as the city and the Cape Girardeau School District won't receive the added tax money for a number of years.

But Meyer said the tax incentive is worth it.

Without it, two major redevelopment projects would not have happened, Meyer said.

Other TIF projects could be on the horizon.

The city has received "inquiries" involving other possible developments in downtown, he told the school board.

Meyer told school officials the city is "pretty tough" on developers seeking TIFs. Developers, he said, must demonstrate to city officials the projects cannot be done without such financing.

TIF districts are designed to provide financial incentives to redevelop properties by reinvesting the increased tax revenue generated by the project to aid the development.

The Cape Girardeau City Council formed the downtown TIF district, which covers about 300 acres, in January 2016. Five redevelopment project areas were established within the district, according to Meyer.

Meyer said city officials wanted to spur redevelopment of old downtown buildings and prevent erosion of property values.

The two projects under way are redevelopment of the Marquette Tower and the H-H Building along Broadway and commercial renovations of two Main Street buildings.

In the case of the first project, the developer will receive 90 percent of the real property increment and sales-tax revenue generated by the new development.

The developer of the second project will receive 95 percent of the real property tax increment and sales tax generated by the development, Meyer said.

Meyer told the board the remainder of the increased revenue would be put into a fund, and the money could go for public improvements or dispersed to local governments, including the school district.

At this point, no payments have been made to the developers, Meyer said.

Developers don't receive the TIF money until the projects are completed, Meyer said.

The agreements negotiated by the city and the project developers provide for reimbursement of $2.49 million in costs for the Marquette/H-H Building project and $1.2 million for the Main Street project, Meyer said.

mbliss@semissourian.com

(573) 388-3641