The Bass Pro area aside, Independence says TIFs have done their job
09/30/2013 10:41 PM
09/30/2013 10:41 PM
A pile of dirt and debris, covered with several inches of topsoil, remained after the construction of Independence Center mall in 1974.
Almost 30 years later, in 2003, Independence officials approved a tax increment financing deal to build an apartment complex where that debris was.
Today that same 42-acre site boasts an assessed value of about $5.6 million — many multiples of the $320,000 it was worth a decade ago.
And all that debris?
That remediation, 30 years in coming, is part of the tax increment financing story in Independence.
Tax increment financing, or TIF, is a development tool that allows tax revenues generated by a project to reimburse developers for infrastructure costs. Independence officials say it continues to hasten economic activity.
That’s despite the headaches associated with one high-profile project, Crackerneck Creek, the site of the city’s Bass Pro Shops store. Lack of retail activity there has cost Independence taxpayers almost $14 million over the last two years.
But even that project is coming along, with grading work on a new Stoney Creek Inn having begun this summer.
The inn, scheduled to open in October 2014, will include a conference center covering 32,000 square feet — an increase from the 20,000 square feet announced a year ago.
“With our analysis, the encouragement of the city and our sense of market opportunities, we have enlarged our conference center,” said Jim Thompson, Stoney Creek Hospitality chief executive officer.
Independence City Council members recently heard updates on two TIFs: the Cornerstone apartments and the Hartman Heritage commercial district.
The projects stand next to each other on the East 39th Street commercial corridor that has played a significant role in the city’s economic fortunes over the last 20 years.
Construction of the Cornerstone project began in 2004.
The TIF closed out earlier this year, said Cindi Dodson, Independence economic development projects coordinator. The completed complex, Dodson said, has strengthened the city’s economic base, while the construction included the remediation of “improperly filled soils” — that big pile of dirt and debris.
Hartman Heritage, on about 63 acres west of Little Blue Parkway north of Interstate 70, was approved in 1998.
The assessed value of property before TIF approval was $9,631. As of August 2012, it was about $11.7 million, Dodson said.
The Hartman project, Dodson said, is a high-quality commercial district with retail and restaurants as well as a hotel and convention center. While the recent economic downturn left some storefronts dark, there is now renewed activity, she said.
The Aspen Athletic Club will be opening in a 29,000-square-foot space, Dodson said, and a new restaurant soon is scheduled to replace the Macaroni Grill.
TIF districts have had their critics.
Opponents have charged that city officials used the development tool in southeast Independence at the possible expense of renewal in the older northwest areas. City officials, in turn, have cited several TIFs in older areas, such as a TIF for Noland Road auto dealerships.
Critics also have included school districts that stood to benefit after developments were placed on the property tax rolls once TIF deals closed.
In 2003 the Blue Springs School District objected to the Cornerstone TIF, saying the number of children in the apartment complex would place an inordinate load on the district.
Independence officials noted that district officials had not complained about other TIF projects, given the promises of increased tax revenues in years to come. The council unanimously approved the TIF that night.
“If the council had not made that decision to make that investment, (the apartment complex) would still be vacant ground, none of those improvements would have been made and the taxing jurisdictions would not have the tax income that they have now,” Independence City Manager Robert Heacock told council members recently.
“It shows it was a good invesment.”
In 1974 Independence officials dedicated the Independence Center shopping mall and then waited for developers to line up, hoping to turn East 39th Street into an Independence version of Metcalf Avenue in Overland Park.
Developers, however, were discouraged by high concentrations of limestone, which added to development costs.
Enter tax increment financing, approved by the state in 1982. Since then, Independence officials have approved 24 TIFs, many in southeast Independence.
“Independence would be in dire straights had they not pulled off what they did on 39th Street," former Independence Mayor Dick King, who represented several developers seeking TIFs, said before his death in 2006.
In 2004 council members approved about $72 million in tax-increment financing for the $171 million Crackerneck Creek project, anchored by Bass Pro on about 200 acres southwest of Interstates 70 and 470.
It was to be surrounded by as many as 70 stores and restaurants, all generating sales tax receipts that would pay off construction bonds.
Bass Pro opened in 2008, but many of the other stores didn’t come, forcing the city to shoulder debt-service payments. The total debt service paid on special obligaton bonds issued for the Crackerneck Creek development for calendar years 2012 and 2013 was $13,794,544.85, said Independence finance director James Harlow.
In April, Independence refinanced the debt, taking advantage of lower interest rates. As a result, the debt service for both calendar years 2014 and 2015 will be $4,440,259.18, Harlow said.
In a report last month, Zachary Walker, Independence management analyst, said that projections of the Crackerneck Creek development’s economic performance “were developed well in advance of the historic economic recession that began to unfold at the onset of the project and continues to linger to the present-day.”
Meanwhile, a building permit has been issued for a Pizza Ranch restaurant on the Crackerneck Creek property, said lawyer Byron Constance, a development group member. While no new tenant announcements are imminent, Constance said, there is high interest in the site.
“The hotel is going to serve as a significant catalyst for additonal development,” he said.