HomeMy Public PortalAbout2016-02-02 -- Part 1 -- Truman Hotel TIF Redevelopment Plan
TRUMAN HOTEL
TAX INCREMENT FINANCING (TIF)
REDEVELOPMENT PLAN
January 21, 2016
TRUMAN HOTEL
TAX INCREMENT FINANCING (TIF)
REDEVELOPMENT PLAN
January 21, 2016
TABLE OF CONTENTS
1 INTRODUCTION ..................................................................................................... 1
Overview of Redevelopment Area ..................................................................................... 1
Neighboring Development ................................................................................................. 3
Purpose of Redevelopment Plan ....................................................................................... 4
Summary of Redevelopment Plan ..................................................................................... 4
Use of Tax Increment Financing ........................................................................................ 5
Why Tax Increment Financing is Needed in the Redevelopment Area .............................. 5
Use and Benefits of Tax Increment Allocation Financing ................................................... 5
Organization of this Redevelopment Plan .......................................................................... 6
2 SUMMARY OF KEY FINDINGS ....................................................................................... 7
Introduction ....................................................................................................................... 7
Blighted Area Not Subject to Growth and Development By Private
Enterprise and Not Reasonably Anticipated to be Developed Without TIF....................... 8
Conformance to the City’s Comprehensive Plan ............................................................... 8
Estimated Date of Completion of the Redevelopment Project and Retirement
of Obligations to Finance Redevelopment Project Costs ………. ..................................... 8
Relocation Assistance Plan …………………………………………………. ........................... 9
Cost-Benefit Analysis Showing Economic Impact on Each Taxing District …. .................... 9
No Gambling Establishment .............................................................................................. 9
3 REDEVELOPMENT PLAN OBJECTIVES ............................................................ 10
4 GENERAL DESCRIPTION OF THE PROGRAM AND ACTIVITIES TO
ACCOMPLISH OBJECTIVES ............................................................................... 11
5 EXISTING LAND USE ........................................................................................... 12
6 PROPOSED REDEVELOPMENT PLAN .............................................................. 13
7 ESTIMATED COSTS FOR REDEVELOPMENT PROJECT .................................... 15
8 ANTICIPATED FUNDS TO PAY COSTS AND OBLIGATIONS
TO BE ISSUED ................................................................................................................. 17
Anticipated Sources of Funds to Pay the Costs ………………………….. .......................... 17
Evidence of Commitments to Finance the Project Costs ................................................. 17
Anticipated Type and Term of Sources of Funds to Pay Costs ........................................ 17
Anticipated Type and Term of the Obligations to be Issued ............................................. 19
9 EQUALIZED ASSESSED VALUATIONS ..................................................................... 20
Most Recent Equalized Assessed Valuation of Property Within the
Redevelopment Area ………………………………………………………………….. .......... 20
Estimated Equalized Assessed Valuation after Redevelopment …………. ....................... 20
10 REPORTING REQUIREMENTS ............................................................................ 21
MAPS
Site Location………………………………….…………………………………….………..1
Aerial Photograph of Redevelopment Area ........................................................................ 2
Aerial Photograph of Neighboring Development ................................................................. 3
Existing Land Use ............................................................................................................ 12
Site Plan .......................................................................................................................... 15
APPENDICES
A Legal Description of the Redevelopment Area
B Blight Study Report
C Estimated Project Costs and Reimbursable Project Costs
D TIF Revenue Projections
E Certificate of Compliance with the City’s Comprehensive Plan
F Evidence of Commitment to Finance Project Costs
G Cost-Benefit Analysis Tables
H Developer’s Affidavit
I Developer’s Background and Experience
J List of Consultants
Truman Hotel TIF Redevelopment Plan 1
1. INTRODUCTION
Overview of Redevelopment Area
The Truman Hotel TIF Redevelopment Area (the “Redevelopment Area” or “Area”), is
located adjacent to United States Route 54 in southwestern Jefferson City, Missouri (the
“City”). The Area is generally bounded by Jefferson Street to the southeast, an access
road for offices of the Missouri Department of Transportation (“MoDOT”) and Highway
Patrol to the southwest, Southridge Drive to the northwest, and Zumwalt Road to the
northeast. The Redevelopment Area comprises all parcels in this block except for the one
containing the aforementioned MoDOT and Highway Patrol offices (see Site Location
maps, below).
The Redevelopment Area, which consists of two parcels containing approximately 8.65
acres of land, is split into two Redevelopment Project Areas (“RPAs”). RPA 1 is to be
activated for redevelopment concurrent with passage of the ordinance approving the
Redevelopment Agreement for this Redevelopment Plan; RPA 2 will be activated at a later
date, currently expected to be October, 2018.
Appendix A provides a legal description of the Redevelopment Area and both RPAs
Truman Hotel TIF Redevelopment Plan 2
The Redevelopment Area is located southwest of downtown Jefferson City in a mixed-
use, auto-centric corridor featuring a number of low- to mid-range hotel and motel
properties, fast food restaurants, and automotive services. The Area itself currently
contains five buildings comprising approximately 146,000 square feet. Until recently,
these buildings were operated as the Truman Hotel and Conference Center, a 233-room
non-flagged convention hotel. The hotel, built in 1968, has become increasingly outdated
and rundown (see Blight Study Report prepared by Valbridge Property Advisors, attached
as Appendix B). Several of the buildings are completely unusable, due to their poor
condition, and the others are not able to generate enough income to produce a profit. The
current owner, Puri Group of Enterprises, has closed the hotel down in stages over the
past several years to prepare for site redevelopment.
The entire Redevelopment Area is currently zoned “C-2” (General Commercial District),
which, according to the City’s zoning code, “is intended to accommodate general trades
and commercial services … located at select nodes, intersections, and highway
interchanges to serve the motoring public and highway users.” The proposed uses for the
site are consistent with, and in furtherance of, this intention.
Truman Hotel TIF Redevelopment Plan 3
Neighboring Development
The Redevelopment Area’s immediate surroundings are mostly occupied by low-density,
highway-oriented commercial uses. Beyond the commercial district, to the east, west, and
south, the land use is predominantly residential. To the northeast, along Jefferson and
Madison Streets, lies a denser commercial corridor that connects the Area to downtown
Jefferson City, approximately 1.5 miles away.
Truman Hotel TIF Redevelopment Plan 4
Purpose of Redevelopment Plan
The Redevelopment Area represents an important redevelopment opportunity, given its
location near downtown Jefferson City and adjacent to one of the area’s major arterial
roads. The site is well-positioned for a hotel development; however, the existing hotel’s
poor condition has kept it from being profitable. The Redevelopment Projects described
in this Redevelopment Plan are intended to return the site to productive use.
These Redevelopment Projects will:
Have a substantial and significant public benefit by eliminating blight throughout
the Redevelopment Area;
Provide attractive, convenient upper-midscale lodging options for visitors to the
City;
Strengthen the City’s Economic base by providing an important source of taxes for
the City and other taxing jurisdictions on a site where comparatively little tax
revenue is currently being generated;
Strengthen the City’s Employment Base through creation of employment
opportunities for residents of the City and surrounding communities;
Reinforce the attractiveness of the Highway 54 corridor as a destination, increasing
commercial traffic that will support other area businesses;
Summary of Redevelopment Plan
The site is currently occupied by a shuttered five-building hotel, containing approximately
146,000 square feet, several large surface parking lots, and a swath of vacant land. It is
not anticipated that the existing development can be reused for the types of activities for
which the site is best suited. It is therefore necessary to demolish the existing buildings
and reconfigure the parking areas. This Redevelopment Plan proposes, over the course
of two Redevelopment Projects, to:
1. Demolish the existing, outdated hotel buildings;
2. Construct two new multi-story hotels—the first a 121-room Holiday Inn & Suites
with an on-site restaurant; the second a 145-room Courtyard by Marriott;
3. Fully renovate and remodel the existing, outdated conference space into a new,
20,000 square foot conference, meeting, and event center;
4. Reconfigure the surface parking and ingress/egress for better circulation;
5. Provide improved parking areas, signage, landscaping, exterior lighting, etc.
Truman Hotel TIF Redevelopment Plan 5
Use of Tax Increment Financing
To facilitate redevelopment of the Redevelopment Area, it is proposed to use tax
increment allocation financing ("TIF") pursuant to Section 99.800 et seq. of the REVISED
STATUTES OF MISSOURI (“RSMO”), known as the Real Property Tax Increment Allocation
Redevelopment Act (“TIF Act”). TIF has proven to be an effective tool for remedying
conditions in “blighted areas” and for encouraging growth and development through
investment by private enterprise in situations such as those faced in the Redevelopment
Area.
Why Tax Increment Financing is Needed in the Redevelopment Area
While the revitalization of the Redevelopment Area has been desired by local residents,
businesses, and the City in general for some time, there are a number of serious
impediments to private redevelopment. Most significantly, the costs associated with
making full productive use of the Redevelopment Area are greatly increased by the former
hotel buildings’ functional obsolescence and poor condition. Despite these high
redevelopment costs, the site has a finite ability to generate revenue; consequently, an
imbalance between expense and revenue is created that makes the project economically
infeasible unless selected development costs are effectively reduced by means of TIF.
These economic factors represent the second component of the “but for” justification upon
which this project’s use of TIF is based – without the availability of TIF funds as a
development incentive, private developers will continue to be discouraged from taking on
the extraordinary costs of site redevelopment.
The Developer’s Affidavit, included as Appendix H, attests to the fact that the
Redevelopment Area qualifies as a “blighted area" (as defined by the TIF Act) and that
the Area has not been subject to growth and development through investment by private
enterprise. (The Area’s blighted condition has been confirmed by a Blight Study,
performed by Valbridge Property Advisors, which is attached to this document as
Appendix B). The effect of these realities is that the Redevelopment Area would not
reasonably be anticipated to be developed without the adoption of Tax Increment
Financing.
Use and Benefits of Tax Increment Allocation Financing
Upon the City’s adoption of TIF and approval of the Redevelopment Projects described in
this Redevelopment Plan, payments resulting from incremental increases in various taxes
occurring within the Redevelopment Area will be reallocated and deposited for a limited
time into a special fund of the City (the “Special Allocation Fund”). These taxes will include
incremental real property taxes ("Payments in Lieu of Taxes" or "PILOTs") and a portion
of the incremental tax revenue generated by economic activities within the Redevelopment
Area (“Economic Activity Taxes” or “EATs”), including taxes on certain sales and on
utilities.
Truman Hotel TIF Redevelopment Plan 6
Revenues deposited in the Special Allocation Fund may be used to secure obligations,
the proceeds of which, in turn, may be used to finance the various Redevelopment Project
Costs enumerated in section 99.805(15) of the TIF Act. For the duration of the
Redevelopment Projects, all personal property and commercial surcharge tax revenue, as
well as fifty percent of general sales and utility tax revenues, will be passed through to the
applicable taxing districts. In addition, because tax revenue from the sale of hotel rooms
is ineligible for capture by the TIF, the entirety of the general sales taxes on these
transactions will continue to flow to applicable taxing jurisdictions. Furthermore, Jefferson
City’s 7.00 percent Convention and Visitors Bureau tax will continue to be paid to that
entity.
Once the TIF obligations are retired, the TIF is dissolved and all taxes generated in the
Redevelopment Area will flow to applicable taxing jurisdictions, based on the Area’s then-
current assessed valuation and tax rates.
TIF, as a redevelopment tool, provides several benefits. Typically, the stream of future
revenues available through TIF is used to secure and finance TIF bonds or notes. Thus,
the City and the Developer have funds available at the inception of the Redevelopment
Project, when they are needed most. Additionally, TIF provides for direct representation
of all affected taxing districts on the commission that reviews and recommends
redevelopment plans and redevelopment projects to the City.
Organization of this Redevelopment Plan
Sections 99.805(13) and 99.810 of the TIF Act set forth the requirements for
redevelopment plans. Accordingly, this Redevelopment Plan represents the
comprehensive program of the City intended by the payment of Redevelopment Project
Costs to reduce or eliminate those conditions, the existence of which qualify the
Redevelopment Area as a “blighted area,” “conservation area,” or “economic development
area” (as those terms are defined in Section 99.805 of the TIF Act ), and to thereby
enhance and insure the tax base of the taxing districts which extend into the
Redevelopment Area.
Subsequent sections of this Redevelopment Plan set forth a summary of key findings;
Redevelopment Plan objectives (along with a general description of the program and
activities to accomplish these objectives); existing and proposed land uses for the
Redevelopment Area; the estimated costs of the Redevelopment Project; the anticipated
sources of funds to pay costs; evidence of the commitments to finance the costs of
projects; the anticipated type and term of the sources of funds to pay costs; the anticipated
type and terms of the obligations to be issued; the most recent equalized assessed
valuation of the property within the Redevelopment Area which is to be subjected to
payments in lieu of taxes and economic activity taxes pursuant to Section 99.845 of the
TIF Act; and an estimate of the equalized assessed valuation after redevelopment. This
Redevelopment Plan also provides the basis and documentation for findings required by
Sections 99.810.1(1) through 99.810.1(6) of the TIF Act and summarizes reporting
requirements imposed by Section 99.810.2 of the TIF Act.
Truman Hotel TIF Redevelopment Plan 7
2. SUMMARY OF KEY FINDINGS
Introduction
In order to establish a Redevelopment Area, adopt a Redevelopment Plan, and authorize
Tax Increment Financing, the City must find, and this Plan concludes, pursuant to Section
99.810 of the TIF Act that:
a. The Redevelopment Area on the whole: 1.) Is a blighted area, a conservation area,
or an economic development area; 2.) Has not been subject to growth and
development through investment by private enterprise; and 3.) would not
reasonably be anticipated to be developed without the adoption of tax increment
financing. This finding shall include, but not be limited to, a detailed description of
the factors that qualify the Redevelopment Area or project pursuant to sections
99.805(1) and 99.810.1 of the TIF Act and an affidavit, signed by the Developer
and submitted with the Redevelopment Plan, attesting that the provisions of
section 99.810.1 of the TIF Act have been met;
b. The Redevelopment Plan conforms to the Comprehensive Plan for the
development of the municipality as a whole (see Certificate of Compliance with the
City’s Comprehensive Plan, attached as Appendix E);
c. The estimated dates, which shall not be more than twenty-three years from the
adoption of the ordinance approving any Redevelopment Project within a
Redevelopment Area, of completion of any Redevelopment Project and retirement
of obligations incurred to finance Redevelopment Project costs, have been stated;
d. A plan has been developed for relocation assistance for businesses and
residences that will be relocated (please note that the Developer owns and controls
the entirety of the Redevelopment Area and that no relocation is contemplated to
be necessary);
e. A cost-benefit analysis has been performed showing the economic impact of the
Redevelopment Plan on each taxing district that is at least partially within the
boundaries of the Redevelopment Area (see Appendix G). The analysis shows
the impact on the economy if the project is not built, as well as the impact if it is
built according to this Redevelopment Plan. It also includes a study of the fiscal
impact on every affected political subdivision and sufficient information for the TIF
Commission to evaluate whether the project, as proposed, is financially feasible;
and
f. The Plan does not include the initial development or redevelopment of any
"gambling establishment" (as that term is defined in section 99.805(6) of the TIF
Act).
Documentation of the determination that the Redevelopment Area meets the
requirements of the TIF Act follows:
Truman Hotel TIF Redevelopment Plan 8
Blighted Area Not Subject to Growth and Development by Private Enterprise
and Not Reasonably Anticipated to be Developed Without TIF
The Redevelopment Area meets the requirements for designation as a “blighted area” as
defined by Section 99.805(1) of the TIF Act. The Blight Study Report for the Truman Hotel
and Convention Center (“Blight Study”) details and documents the conditions which qualify
the Redevelopment Area as a “blighted area.” The Blight Study is attached to this
Redevelopment Plan as Appendix B.
The Redevelopment Area has not been subject to growth and development through
investment by private enterprise and would not reasonably be anticipated to be developed
without the adoption of tax increment financing. Appendix H to this Redevelopment Plan
contains an affidavit, signed by the Developer, which is submitted with and incorporated
by reference in this Redevelopment Plan, attesting that the provisions of Section 99.810.1
of the TIF Act have been met.
Conformance to the City’s Comprehensive Plan
The uses proposed for the Redevelopment Area are consistent with and in furtherance of
the current Jefferson City Comprehensive Plan. This Plan is “the guiding document for
the growth [of] and future land use within Jefferson City.” The Comprehensive Plan
specifically identifies the Area as suitable for commercial uses such as those proposed in
this Redevelopment Plan. Furthermore, the Developer has obtained, from the City’s
Department of Planning and Protective Services, a letter evidencing the proposed
development’s compliance with the Comprehensive Plan. It is attached to this
Redevelopment Plan as Appendix E.
Estimated Dates for Completion of the Redevelopment Project and
Retirement of Obligations to Finance Costs of the Redevelopment Project
This Redevelopment Plan states, in Section 8, that all TIF obligations issued to finance
costs of the Redevelopment Project for RPA 1 are estimated to be retired no later than
February, 2039. This conforms to the requirement of the TIF Act that all obligations be
retired not more than 23 years from the date of adoption of the ordinance approving a
Redevelopment Project in a TIF Redevelopment Area. (RSMo § 99.810).
This Redevelopment Plan states that demolition of several of the existing hotel buildings
is anticipated to begin in the spring of 2016, following approval of this Redevelopment
Plan. The Redevelopment Project for RPA 1 is anticipated to be completed in the fall of
2017. RPA 2 is expected to be activated in the fall of 2018 and its redevelopment should
be completed by the spring of 2020.
Redevelopment Project Area Expected Start Expected End
RPA 1 Spring 2016 Fall 2017
RPA 2 Fall 2018 Spring 2020
Truman Hotel TIF Redevelopment Plan 9
Relocation Assistance Plan
The property is owned by the Developer and is currently vacant, so no relocation is
anticipated. To the extent any relocation is needed to carry out the Redevelopment Plan,
however, the provisions of Sections 523.200 to 523.215, Missouri Revised Statutes (as
amended), shall be complied with.
Cost-Benefit Analysis Showing Economic Impact on Each Taxing District
A separate Cost-Benefit Analysis (dated December 18, 2015), prepared by Development
Strategies, which details the economic impact of this Redevelopment Plan on each taxing
district that is at least partially within the boundaries of the Redevelopment Area, is
incorporated herein by reference. The analysis shows the impact on taxing districts if the
Redevelopment Projects are not built, as well as the impact if the Redevelopment Projects
are built according to this Redevelopment Plan.
The cost-benefit analysis additionally includes a study of the fiscal impact on each affected
political subdivision and sufficient information from the Developer for the TIF Commission
to evaluate whether the Redevelopment Projects, as proposed, are financially feasible.
No Gambling Establishment
This Redevelopment Plan does not include the initial development or redevelopment of
any "gambling establishment" (as that term is defined in section 99.805(6) of the TIF Act).
Truman Hotel TIF Redevelopment Plan 10
3. REDEVELOPMENT PLAN OBJECTIVES
The following objectives have been established for this Redevelopment Plan. These
objectives are consistent with those contained in the Jefferson City Comprehensive Plan,
as well as those purposes outlined in the TIF Act:
To reduce or eliminate those conditions, the existence of which qualify the
Redevelopment Area as a “blighted area” and thereby to enhance the public health,
safety, welfare, and/or morals;
To provide a demonstration and catalyst project for the continued growth and
development of the Highway 54 corridor;
To allow the Redevelopment Area to be put to productive use once again;
To support the neighboring commercial development along Highway 54 by providing
a new commercial traffic generator in the area;
To provide a range of job opportunities, from entry-level to professional/managerial,
for the residents of Jefferson City and surrounding communities;
To provide a funding mechanism which will pay for the costs of improvements needed
to stimulate growth and development through private reinvestment; and
As a result of these activities, to enhance the tax bases and the resulting tax revenues
for the City and all other taxing districts that extend into the Redevelopment Area.
Truman Hotel TIF Redevelopment Plan 11
4. GENERAL DESCRIPTION OF ACTIVITIES TO BE UNDERTAKEN TO
ACCOMPLISH OBJECTIVES
To accomplish the objectives of this Redevelopment Plan, a program has been initiated
to make TIF available within the Redevelopment Area and to attract and encourage private
investment in the Redevelopment Area. Steps undertaken to date include:
Preparation of this Redevelopment Plan providing for the redevelopment of the
Redevelopment Area in accordance with and in furtherance of the Jefferson City
Comprehensive Plan (see Appendix E for Certificate of Compliance);
Study of the Redevelopment Area to document the existence of conditions that render
the Redevelopment Area a “blighted area” under the TIF Act. The study methodology
and documentation are set forth in Appendix B, the Blight Study Report. (Study results
provide the basis for the findings in Section 2 of this Redevelopment Plan); and
As a result of these efforts, this Redevelopment Plan envisions a revitalized, productive,
and inviting destination for the Jefferson City community and surrounding areas.
Subsequent activities necessary to implement the Redevelopment Projects and to
accomplish the objectives of this Redevelopment Plan include, without limitation:
The negotiation, approval, and execution of a Redevelopment Agreement providing
for the terms upon which the developer will undertake the Redevelopment Projects in
accordance with this Redevelopment Plan;
Demolition of existing hotel buildings;
Construction of new hotel buildings;
Parking, landscaping, and infrastructure improvements;
Funding of selected costs of the Redevelopment Projects and issuance of temporary
and permanent TIF obligations, if applicable.
Truman Hotel TIF Redevelopment Plan 12
5. EXISTING LAND USE
The Redevelopment Area is comprised of two parcels occupied by five hotel buildings,
several surface parking lots, and a swath of vacant land. The Redevelopment Area’s
buildings currently contain a total of approximately 148,000 square feet, though their
footprints are significantly smaller.
EXISTING LAND USE IN THE
TRUMAN HOTEL TIF REDEVELOPMENT AREA
(As of December 2015)
LAND USE Square Feet % of Total Square Footage
Buildings (footprint) 82,000 22%
Surface Parking 225,000 60%
Vacant Land 70,000 18%
TOTAL 377,000 100%
Source: Cole County Assessor’s Office
Truman Hotel TIF Redevelopment Plan 13
6. PROPOSED DEVELOPMENT PLAN
General Land Use and Redevelopment Project Areas
When completed, the Redevelopment Area will have replaced an outdated, closed hotel
with two new, high quality hotels and a new conference, convention, and event space.
Below is a general description of the redevelopment proposed for each of the two RPAs.
Redevelopment Project Area 1: This RPA consists of one parcel, 5.0 acres in size,
comprising the southwestern portion of the Redevelopment Area. It currently contains
three two-story hotel buildings, several surface parking lots, and a swath of vacant land.
To enhance the commercial value and viability of the Area, the following actions are
proposed:
Demolish the three existing, outdated hotel buildings;
Construct a new five-story, 121-room business class hotel with an indoor pool and
restaurant;
Reconfigure parking lots and ingress/egress for improved circulation;
Provide attractive landscaping details, signage, exterior lighting, and other site
upgrades to improve the overall image, safety, and functioning of RPA 1.
Redevelopment Project Area 2: This RPA consists of one parcel, 3.65 acres in size,
comprising the northeastern portion of the Redevelopment Area. It currently contains the
two main buildings of the existing hotel, including the conference space, and surface
parking. To enhance the commercial value and viability of the Area, the following actions
are proposed:
Demolish the existing, outdated hotel buildings;
Construct a new four-story, 145-room business class hotel;
Replace the existing conference space with a new two-story, 20,000 square foot
conference, meeting, and event space;
Connect the two new hotels to the new conference space via new breezeways;
Reconfigure parking lots and ingress/egress for improved circulation;
Provide attractive landscaping, signage, exterior lighting, and other site
improvements to enhance the site’s utility and image.
It is important to note that the above description of p roposed development reflects current
plans for the redevelopment but could be subject to change in accordance with the TIF Act
Truman Hotel TIF Redevelopment Plan 14
THE ABOVE SITE PLAN IS PRELIMINARY AND SUBJECT TO CHANGE
Truman Hotel TIF Redevelopment Plan 15
7. ESTIMATED REDEVELOPMENT PROJECT COSTS
Section 99.805(15) of the TIF Act authorizes the City to include as "[r]edevelopment project
costs … the sum total of all reasonable or necessary costs incurred or estimated to be
incurred, and any such costs incidental to a redevelopment plan or redevelopment project,
as applicable” (internal quotation marks deleted).
The TIF Act states that eligible redevelopment project costs include but are not limited to:
a) Costs of studies, surveys, plans, and specifications;
b) Professional service costs including, but not limited to, architectural, engineering,
legal, marketing, financial, planning, or special services, subject to the limitations of
Section 99.805(15)(b) of the TIF Act;
c) Property assembly costs including, but not limited to, acquisition of land and other
property, real or personal, or rights or interests therein, demolition of buildings, and
the clearing and grading of land;
d) Costs of rehabilitation, reconstruction, or repair or remodeling of existing buildings
and fixtures;
e) Costs of construction of public works or improvements;
f) Financing costs including, but not limited to, all necessary and incidental expenses
related to the issuance of obligations, and which may include payment of interest on
any obligations issued pursuant to sections 99.800 to 99.865 of the TIF Act accruing
during the estimated period of construction of any redevelopment project for which
such obligations are issued and for not more than eighteen months thereafter, and
including reasonable reserves thereto;
g) All or a portion of a taxing district’s capital costs resulting from the r edevelopment
project necessarily incurred or to be incurred in furtherance of the objectives of the
redevelopment plan and project, to the extent the municipality by written agreement
accepts and approves such costs;
h) Relocation costs to the extent that a municipality determines that relocation costs
shall be paid or are required to be paid by federal or state law; and
i) Payments in lieu of taxes.
Truman Hotel TIF Redevelopment Plan 16
Estimated costs for the redevelopment are anticipated to total approximately $56.8
million. The table below summarizes the planned allocation of total costs. For a
detailed breakdown of total costs and TIF-eligible costs, please see Appendix C.
TRUMAN HOTEL TIF REDEVELOPMENT AREAS 1 & 2
ESTIMATED TOTAL PROJECT COSTS (in Thousands)*
RPA
Studies &
Professional
Services
Property
Acquisition
& Relocation
Demolition,
Environmental, Site
Prep & Improvements
New
Building
Costs
Financing
Costs
Contingency/
Reserve TOTAL
1 $2,800 $1,500 $3,920 $10,685 $975 $2,215 $22,095
2 $4,640 $2,750 $5,700 $16,568 $1,575 $3,470 $34,703
Total $7,440 $4,250 $9,620 $27,253 $2,550 $5,685 $56,798
The value of the TIF revenue stream for each RPA is detailed below. For detailed
projections of TIF revenues generated, please see Appendix D.
RPA 1 – The TIF in RPA 1 is expected to generate a total of $6,660,493 in revenue,
which is presently valued at $3,577,853, assuming a discount rate of 5.25 percent.
RPA 2 – The TIF in RPA 2 is expected to generate a total of $10,288,905 in revenue,
which is presently valued at $5,311,615, assuming a discount rate of 5.50 percent.
Redevelopment Costs anticipated to be funded out of TIF revenues have a total present
value of approximately $8.9 million, as detailed in the following table:
TRUMAN HOTEL TIF REDEVELOPMENT AREAS 1 & 2
ESTIMATED TIF-FUNDED PROJECT COSTS (in Thousands)*
RPA
Studies &
Professional
Services
Property
Acquisition
& Relocation
Demolition,
Environmental,
Site Prep &
Improvements
Building
Renovation
Costs
Financing
Costs Contingency TOTAL
1 $953 $0 $2,075 $0 $300 $250 $3,578
2 $1,637 $0 $2,475 $300 $500 $400 $5,312
Total $2,077 $0 $4,550 $0 $750 $625 $8,890
* Estimates of Redevelopment Project and TIF-funded Costs are based upon certain assumptions that may not
materialize and, as an estimate or projection, are subject to uncertainty and risks that could cause actual
results to differ, possibly materially, from those contemplated in this estimation. Accordingly, the actual
costs may vary from the contemplated costs. Furthermore, distribution of costs among the various cost
categories for Redevelopment Projects is approximate. As the Redevelopment Projects are implemented,
specific categorical items and actual associated costs may vary from those provided above. The above
estimated costs are exclusive of costs of issuance of TIF Obligations (as herein defined), required reserve
accounts, accrued interest on TIF Obligations and capitalized interest, if any.
Truman Hotel TIF Redevelopment Plan 17
8. ANTICIPATED SOURCES OF FUNDS TO PAY COSTS & OBLIGATIONS
TO BE ISSUED
Anticipated Sources of Funds to Pay Redevelopment Costs
It is anticipated that the sources of funds to pay the costs of the Redevelopment Projects
could include:
Funds available to the Developer through the Developer's own operating revenues,
cash reserves, and other equity;
Funds made available through private debt financing obtained by the Developer,
including a construction loan, permanent mortgage, and/or mezzanine financing;
and
PILOTs and EATs revenue collected pursuant to the TIF Act upon adoption of tax
increment allocation financing for the Redevelopment Area by the City and
deposited from time to time in the "Special Allocation Fund" (as that term is defined
in section 99.805(16) of the TIF Act) established for the Redevelopment Projects;
Please see Source of Funds table on the following page.
Evidence of Commitments to Finance the Project Costs
Appendix F contains a commitment letter provided by Mid America Bank to provide
financing for the Redevelopment Project. The Developer also commits to finance Project
Costs through a combination of equity, conventional financing, mezzanine financing, and
TIF Obligations that would be purchased or privately placed by the Developer.
Anticipated Type and Term of Sources of Funds to Pay Costs
As noted above, Redevelopment Project funds anticipate a combination of developer
equity, conventional financing, tax credits, and TIF Obligations. Conventional financing
provided by the Developer will include both private construction financing and permanent
financing. Terms of construction and permanent financing will be determined through
negotiations between the Developer and the Developer's equity partners and private
lending institutions.
As detailed below, TIF Obligations may consist of an initial issuance of temporary notes to
be subsequently refunded by permanent bonds, each secured by revenues deposited into
the “Special Allocation Fund” for the Redevelopment Projects established pursuant to the
TIF Act. As provided in the TIF Act, the maximum term of TIF financing will not exceed 23
years from the adoption by the City of the ordinance approving tax increment financing in
each Redevelopment Project Area.
Truman Hotel TIF Redevelopment Plan 18
Truman Hotel TIF Redevelopment Plan 19
Maximum Term of Obligations to be Issued (if Any)
Should any TIF Obligations be issued for this Redevelopment Project, in no case will their
term exceed a date 23 years from the adoption by the City of the ordinance approving tax
increment financing for the Redevelopment Project. The anticipated date of approval is
February, 2016 for RPA 1. In that case, the latest date anticipated for retirement of all TIF
Obligations issued for RPA 1 would be February, 2039. The anticipated date of approval
for RPA 2 is October, 2018. In that case, the latest date anticipated for retirement of all TIF
obligations issued for RPA 2 would be October, 2041.
Truman Hotel TIF Redevelopment Plan 20
9. EQUALIZED ASSESSED VALUATIONS
Most Recent Equalized Assessed Valuation of Property within each
Redevelopment Project Area
The most recent equalized assessed valuations ("EAV") of property within RPAs 1 & 2 of
the Redevelopment Area are provided by the records of the Cole County Assessor’s Office.
Most recent EAVs reflect assessments for the tax year 2015. RPA 1’s 2015 assessed value
is $270,432; RPA 2’s 2015 assessed value is $289,568.
Estimated Equalized Assessed Valuation after Redevelopment
The estimated EAVs after redevelopment are predicated upon increases in property values
resulting from the completion of the Redevelopment Projects. The table below provides an
estimate of the EAVs resulting from full redevelopment of each Project Area.
TRUMAN HOTEL TIF REDEVELOPMENT PROJECT AREAS 1 & 2
ESTIMATED EAV BEFORE AND AFTER REDEVELOPMENT
RPA 2015 EAV ESTIMATED EAV
AFTER REDEVELOPMENT
PROJECTED
INCREMENTAL EAV
1 $270,432 $5,688,832 $5,418,400
2 $289,568 $8,800,000 $8,510,432
Total $560,000 $14,488,832 $13,928,832
Sources: Cole County Assessor’s Office, Puri Group of Enterprises, and Development Strategies
Truman Hotel TIF Redevelopment Plan 21
10. REPORTING REQUIREMENTS
Annual TIF District Report
Each year the governing body of the municipality, or its designee, shall prepare a report
concerning the status of each redevelopment plan and redevelopment project, and shall
submit a copy of such report to the director of the department of economic development.
The requirements for such reports are detailed in the TIF Act at § 99.865.1.
Annual Report Regarding Relocated Businesses
The TIF Commission, by the last day of February each year, shall report to the State Director
of Economic Development the name, address, phone number, and primary line of business
of any business which relocates to the Redevelopment Area pursuant to requirements of §
99.810.2 of the TIF Act.
Public Hearing Required Every Five Years
Five years after the establishment of a TIF district pursuant to an approved redevelopment
plan, and every five years thereafter, the municipality’s governing body shall hold a public
hearing regarding that redevelopment plan. The purpose of this hearing shall be to
determine if the redevelopment project is making satisfactory progress under its proposed
time schedule. The requirements for such hearings are detailed in § 99.865.3 of the TIF
Act.
APPENDIX A
Legal Description of the
Truman Hotel Tax Increment Financing
Redevelopment Area
Truman Hotel TIF Redevelopment Plan APPENDIX A - 1
C-2.
Overall Redevelopment Area
Truman Hotel TIF Redevelopment Plan APPENDIX A - 2
C-2.
Redevelopment Project Area 1
Truman Hotel TIF Redevelopment Plan APPENDIX A - 3
C-2.
Redevelopment Project Area 2