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Jon K. Rust

Jon K. Rust is publisher of the Southeast Missourian and co-president of Rust Communications.

Opinion

Marquette project applauded -- almost universally -- around community

The response to the Marquette development in Cape Girardeau has been overwhelmingly positive. Where criticism exists, it is largely centered on historic tax credits and tax increment financing (TIF). As part of a group (an investment company owned by my brothers and me) that seriously considered being investors in the project (but declined), let me share a perspective.

First, the developers and investors deserve tremendous credit for their bold plan and the hard work they've put into it. There are no guarantees about the project's success, and they are risking a considerable amount of their own money. Second, TIF is not a tax on the community. No one in Cape Girardeau will pay more in taxes because of the city council's approval of TIF for the project. Instead, all TIF does is for a period of time recirculate new money that is created by the project back into making the project doable. More about this later.

Third, without incentives like TIF and historic tax credits, there really is not a good economic case to invest substantially in these very large buildings, meaning they would just deteriorate over time. Old buildings, simply, are expensive to renovate. Should there be historic tax credits at all? That's a debate for another time, and good people can disagree. But without them, many old buildings -- and much of our history -- would be lost.

For those criticizing TIF, many of their points are not wrong in general. They are just off-base in being applied to this project. Indeed, there are many examples around the country where TIF has been abused -- where TIF status is doled out in secret by government to favored developers often for projects that would have taken place otherwise.

That's not the case here.

There is virtually NO scenario that these buildings would be transitioned into a hotel and tech center otherwise. And the fund assistance won't come from current coffers of the city of Cape Girardeau or its taxpayers; instead, it will come from the economic success and new activity of the project itself. Here's the thing: The city gains nothing from those buildings standing largely vacant. And, if the project fails (and doesn't generate new revenue), then the city doesn't have any incremental tax revenue to recirculate anyway. This is rather low risk for the city to engage in. On the other hand, if the project succeeds, the corollary benefits are immense.

As for the criticism that the Marquette development will put additional burdens on city spending, which will force the city or school system or other taxing entities to raise their taxes on citizens to handle the demands from the project, that has merit only if the development required significant new services to the district. But this project doesn't do that, as far as it's understood. These buildings already exist. The city is not laying new water or sewer lines, paving new streets or adding other new services to the area. In addition, this argument ignores that good economic development not only has a multiplier effect (and generates new taxes from ancillary activity) but it primes the pump for more growth, which leads to more tax revenue for the city and the other entities.

TIF is not a foolproof tool. It can be abused, and it has been abused at times elsewhere. But that's not the case with the Marquette project, which grew out of a carefully thought-out and public TIF process by the city. The investors, led by the Maurer and Rhodes families as developers, deserve high praise for their bold vision, which has the promise to improve the community for decades to come, and Mayor Rediger, city management, and the city council deserve credit for their facilitation of this project.

Jon K. Rust is the publisher of the Southeast Missourian and the co-president of Rust Communications.

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