TIF necessary for development, consultant says

The project is just too big to do with no financial help.

That's the conclusion that independent consultant Chauncy Buchheit has reached as he continues to study the Prestwick Plantation's proposed development, an 800-acre upscale residential subdivision near the new, recently annexed Dalhousie Golf Club near Bloomfield Road.

The Prestwick group is asking the city of Cape Girardeau to grant the project tax increment financing status, meaning the increased tax revenue that is generated by the project would be used to build infrastructure like streets and sewers.

Buchheit, a deputy director with the Southeast Missouri Regional Planning and Economic Development Commission, has been hired by the city as an independent consultant to analyze the project, determine whether or not the project could go on without public funding and present a cost-benefit analysis to the TIF Commission.

The commission will eventually make a recommendation to the city council and the council will approve or deny the project.

Buchheit said he is a few days from completing the cost-benefits analysis, but has already found that the project could not be completed as proposed without TIF.

"The cost of putting this whole thing together, by the time you throw in the land and the development costs, I think the lots would be too expensive to sell without some financial assistance," Buchheit said. "They're not eligible for any kind of grants that I'm aware of. The only kind of public funding would be tax increment financing. I don't think it will progress without some sort of assistance."

Buchheit added that the project is so big -- construction costs have been estimated at $400 million -- that there are no local banks that could give such a loan.

Cord Dombrowski, a developer with the Prestwick group, agreed.

"It's above and beyond the means of local financing to address all at one time," he said. "Banks in our area are not in the position to address a $20-million infrastructure request."

He also points out that national lenders do not want to loan money a smaller market like Cape Girardeau.

Because of the size of the land -- a tract more than three times the size of Southeast Missouri State University's main campus -- the project will require longer streets and sewer mains than a typical subdivision, Dombrowski said.

There are approximately 12 miles of streets and 23 miles of sidewalks in the proposed project that would eventually include 500 homes, 200 condominiums and 10 to 20 cottages.

No formal proposal

No formal proposal has been put forth yet by the developers. Bob Suelmann, another developer with the Prestwick group, said a few more details have to be ironed out before the formal request is submitted.

Early in the TIF process, Dombrowski said Prestwick would want somewhere from $12 million to $15 million in TIF funds for infrastructure.

Buchheit said he has come up with a figure based on preliminary information provided by the developers, but he said he wants to see the official proposal before he releases a figure.

The deadline for the submission is July 26.

Buchheit said the analysis for this project has been more difficult than the other TIF projects he has dealt with before because it is residential rather than commercial or industrial. Buchheit said tax increment financing is rare.

The fact that this is a residential TIF makes crunching the numbers more difficult, he said. For instance, if a shopping mall was being built with TIF money, there would be no impact on school enrollment. But this project would add new students into the school systems, adding more expenses to the schools' budget.

To address that, the developers will donate approximately eight acres of land for a new elementary school and within five years, pay about $4 million to the school district for the construction of the school facilities.

The Prestwick group has also said it will purchase equipment for the city, such as police cars and snow removal equipment.

Public relation problems

Dombrowski explained that no one's taxes will be raised because of TIF and that this project will not adversely affect the city's budget, a point that Dombrowski says he's not sure the public completely understands.

In fact, the Prestwick group recently sent packets of information to city business and government leaders, further explaining their role in the TIF project. The group is worried about the public's perception of TIF, saying many public comments have been viscous, unjustified and lacking factual basis.

"We were naive not to realize that our vision of a show piece for Southeast Missouri, one that could act as a magnet for future economic development, would not be automatically shared by everyone," the group wrote in the eight-page document.

Dombrowski said many people are perhaps afraid of TIF because it is new to Cape Girardeau. But, according to the Missouri Department of Economic Development, there were 125 TIF projects reported in 2000.

The developers estimate that, upon the project's completion in 15-20 years, the development will generate $5 million to $6 million in tax revenue.

Of that amount, the developers say, the school district would receive $3.5 million to $4.5 million.

bmiller@semissourian.com

335-6611, extension 127