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HomeMy Public PortalAboutCapital Mall JC TIF Plan[ t [ [ L L L [ L l l l l l L l l L l 42411005 12 CAPITAL MALL TAX INCREMENT FINANCING PLAN Jefferson City, Missouri CAPITAL MALL JC, LLC A Missouri Limited Liability Company DEVELOPER PREPARED BY: Polsinelli, P.C. 700 West 4th Street, Suite 1000 Kansas City. Missouri 64 t 12 SUBMITTED TO TIF COMMISSION SEPTEMBER 2013 [ [ t t L t t [ [ t t l t L L l L [ l TABLE OF CONTENTS I. SUMMARY ........................................................................................................................ 3 II. DEFINITIONS .................................................................................................................... 8 III. TAX INCREMENT FINANCING ................................................................................... 15 IV. REDEVELOPMENT PLAN AND REDEVELOPMENT AREA ................................... 16 A. Redevelopment Plan Objectives ............................................................................... 16 B. Specific Plan Objectives ............................................................................................ 17 V. EXISTING CONDITIONS IN THE REDEVELOPMENT AREA ................................. I 7 VI. REDEVELOPMENT PROGRAM ................................................................................... 18 A. Redevelopment Activities ........................................................................................ 18 B. General Land Use ..................................................................................................... 19 C. Project Schedule .............................................................................................. 19 VII. FINANCING PLAN ......................................................................................................... 20 A. Special Allocation Fund ............................................................................................ 20 B. Estimated Project Costs ............................................................................................. 20 C. SourceofFunds ......................................................................................................... 21 D. Nature and Term of Obligations ............................................................................... 24 E. Use of Proceeds of Obligations ................................................................................. 25 F. Evidence of Commitments to Finance ....................................................................... 25 VIII. PROCEDURES FOR PAYMENTS TO THE SPECIAL ALLOCATION FUND .......... 25 IX. DISBURSEMENTS FROM SPECIAL ALLOCATION FUND ..................................... 27 X. COST-BENEFIT ANALYSIS .......................................................................................... 28 XI. TERMINATION OF TAX INCREMENT FINANCING ................................................ 29 XII. PROVISIONS FOR AMENDING THE TAX INCREMENT PLAN .............................. 29 XIII. REQUIRED STATUTORY FINDINGS .......................................................................... 30 2 414!1005 12 i[ ' ' ' it I t t L t L [ t [ L l t l L L [ L I. SUMMARY This Capital Mall Tax Increment Financing Plan ("Redevelopment Plan .. or "TIF Plan'') provides for the redevelopment of the Redevelopment Area. which consists of ±78.26 acres at the northeast comer of Highway 50 & S. Country Club Dr./W. Truman Blvd. in Jefferson City, Missouri. which is commonly known as the Capital Mall. The Redevelopment Area is bounded by vacant land/residential development to the west and commercial development to the north. south, and east. and consists of the following tax parcels: Table I -Tax Parcel Numbers 1002090002001001 1002040003002036 1002040003002037 1002040004000025001 1002090001001023 1002040004000025003 1002090002001004 100209002001002 1002090002001005 1002090002001006 1002040004000025 1002090001001022 1002090001001024 I 0020900 I 0020 II Legally described on Exhibit A. the Redevelopment Area currently contains the Capital Mall. JC Penney. Dillards and outlots within the Capital Mall complex. The JC Penney and Dillards properties. as well as certain improvements located within the Redevelopment Area. are not owned by the Developer. The Developer does not anticipate acquiring the currently un-owned properties within the Redevelopment Area. but is willing to do so to protect the vitality of the development. Since its inception. the Redevelopment Area. particularly the Capital Mall. has received few. if any. capital improvements from its passive out-of-state owners. Through steady 3 42411005 12 t t E t l t t [ t [ t L t t L l t t t deterioration caused by a lack of upgrades and maintenance, the Redevelopment Area has experienced serious decay. As a result, the Redevelopment Area has experienced increasing vacancy rates. declining sales. and declining interest and commercial activity. which has decreased both property values within the Redevelopment Area and decreased sales taxes revenues generated from the Redevelopment Area. The Developer. as a local resident. took on substantial risk by purchasing the Capital Mall. along with other property within the Redevelopment Area. in the hopes of transforming the Redevelopment Area into a commercial hub and further supporting the City and other local taxing districts. The Redevelopment Area is a blighted area and is not developed to its highest and best use. as evidenced by the Blight Study attached as Exhibit D. The redevelopment of the Redevelopment Area will likely have positive effects on the City's economy that extend beyond the direct impacts within the Redevelopment Area. In addition to blight remediation. the redevelopment of the Redevelopment Area. for instance. is likely to create economic stability in a commercial center that has experienced significant economic decline. It will further economic self-sufficiency within Jefferson City by transforming the Capital Mall into a regional shopping center. and thus serve as a catalyst for further development and redevelopment within Jefferson City. But without tax increment financing ( .. TIF .. ) to help defray certain redevelopment costs. including eradication of blight conditions as set forth in this TIF Plan. redevelopment of the Redevelopment Area to its highest and best use is unlikely to occur. The Redevelopment Project will consist of the combination of acquisition. engineering (and other soft costs). and the rehabilitation and renovation of the existing Capital Mall. including its infrastructure and amenities. 4 42-111005 12 t I t t [ L [ t [ [ t t l t L [ l [ [ ~ This TIF Plan will make the Payments in Lieu of Taxes and Economic Activity Taxes available to reimburse certain Redevelopment Project Costs. such costs being referred to herein as Reimbursable Project Costs. on an as-collected basis or to retire bonds or other obligations. which may be issued at the sole discretion of the City Council. the proceeds of which will be used to defray Reimbursable Project Costs at the beginning of the Redevelopment Project. as set forth on Exhibit F. If the Reimbursable Project Costs are allocated to the Redevelopment Project on an as-collected basis, reimbursement of Reimbursable Project Costs would occur over the life of the TIF. lfthe Reimbursable Project Costs are allocated to the Redevelopment Project through a bond issuance. the Payments of Lieu of Taxes and Economic Activity Taxes will be dedicated to retire the bonds. which will occur over the 23-year term of the TIF. Any bond issuance associated \l.'ith this TIF Plan will be subject to the sole discretion of the City Council and will not request an annual appropriation pledge from the City. In addition. the Developer contemplates the creation of a Community Improvement District ("CID") that will impose a One Cent ($0.0 I) sales tax ("CID Sales Tax") for the purpose of providing additional revenue to finance Reimbursable Project Costs and other Redevelopment Project Costs on an as-collected basis or to retire bonds or other obligations which may be issued. the proceeds of which will be used to defray Reimbursable Project Costs and other Redevelopment Project Costs at the beginning of the Redevelopment Project. One half (1/2) of the CID Sales Tax will be captured as Economic Activity Taxes upon creation of the CID and imposition of the CID Sales Tax. The remaining one half (1/2) of the CID Sales Tax is anticipated to be made available by the CID pursuant to the CID Act, a Development Agreement. and a Cooperative Agreement between the Developer, the bond issuer (if any). and CID. Presently. the CID Sales Tax is expected to generate Eleven Million Three Hundred Twenty 5 4241100512 t t [ t L [ t t t [ t L t [ l t [ t t Seven Thousand One Hundred Ninety Dollars ($1 1.327.190) in tax revenue. which over the 23~ year tenn of the Redevelopment Project is presently valued at Five Million Ninety One Thousand Five Hundred Thirty Seven Dollars ($5,091.537). assuming a 7.5% discount rate. Tennination of TIF shall not affect the CID. and upon such tennination. the full CID Sales Tax shall be captured by the CID. The C I D is expected to have a lifetime of up to forty ( 40) years. The aggregate Redevelopment Project Cost for the Redevelopment Project is estimated to be approximately Thirty Six Million Eight Hundred Eighty Three Thousand Nine Hundred Seventy Five Dollars ($36.883.975 ). The total Payments in Lieu of Taxes generated by the Redevelopment Project over a Twenty~Three (23) year period is estimated to be Three Million Seven Hundred Fifty Eight Thousand Two Hundred Seventy Dollars ($3.758,270). which is One Million Three Hundred Sixty Three Thousand Six Hundred Forty Dollars ($1 .363,640) present valued at 7 .5%. The total Economic Activity Taxes generated by the Redevelopment Project over Twenty-Three (23) year period is estimated to be Twenty One Million Eight Hundred Seventy Seven Thousand One Hundred Twenty Four Dollars ($21.877.124). which is presently valued at Nine Million Two Hundred Forty One Thousand Three Hundred Forty Seven Dollars ($4.149.810). assuming a 7.5% discount rate. Estimated revenues from Payments in Lieu of Taxes. Economic Activity Taxes, and CID Sales Tax are shown on Exhibit H. 6 4241100512 t ! I t t L l [ [ [ [ [ 1 L [ t L L t t t EXHIBIT A - EXHIBIT B - EXHIBIT C - EXHIBIT D - EXHIBIT E - EXHIBIT F - EXHIBITG - EXHIBIT H - EXHIBIT I EXHIBIT J - EXHIBIT K - EXHIBIT L - EXHIBIT M - EXHIBIT N - 42411005 12 APPENDIX Location and Legal Description of the Redevelopment Area Project Description Specific Objectives of Redevelopment Plan Blight Study Development Schedule Sources and Uses & Estimated Redevelopment Project Costs and Reimbursable Project Costs Source of Funds Estimated Annual Increases in Assessed Value and Resulting Payments in Lieu of Taxes and Economic Activity Taxes over Life of Project Evidence of Commitment to Finance Cost-Benefit Analysis, with Economic Impact and Fiscal Impact Analysis Developer's Affidavit Development Team Summary Current Occupants/Tenants Relocation Plan 7 't [ [ L L [ t t t [ [ L [ [ l L [ t t II. DEFINITIONS As used in this TIF Plan, the following tenns shall mean: A. Blighted Area: An area which. by reason of the predominance of defective or inadequate street layout, unsanitary or unsafe conditions, deterioration of site improvements. improper subdivision or obsolete platting, or the existence of conditions which endanger life or property by fire and other causes. or any combination of such factors. retards the provision of housing accommodations or constitutes an economic or social liability or a menace to the public health. safety, morals. or welfare in its present condition and use. B. City: Jefferson City. Missouri. C. City Council: The governing body of Jefferson City. Missouri. D. Citv Collector: The collector of Jefferson City. Missouri. E. City Treasurer: The treasurer of JetTerson City. Missouri. F. Countv Assessor: The Assessor of Cole County. Missouri. G. County Collector: The Collector of Cole County, Missouri. H. CID: The proposed Capital Mall Community Improvement District that would have the purpose of providing revenue to partially finance (i) Reimbursable Project Costs: and (ii) other Redevelopment Project Costs that qualify as CID costs pursuant to the CID Act. I. CID Act: The Community Improvement District Act. Sections 67.140 I. el seq •. Revised Statutes of Missouri. as amended. J. CID Revenue: That portion of the revenue derived from the CID Sales Tax that does not constitute an Economic Activity Tax. 8 42411005.12 [ £ E L [ [ [ [ t t t L L [ L t ·t t l K. L. M. N. 0. P. 42411005.12 CID Sales Tax: The One Cent ($0.01) sales tax levied by the CID. Debt Service: The amount required for the payment of interest and principal on Obligations as they come due. for the payment of mandatory or optional redemption payments. and for payments to reserve funds required by the terms of Obligations. Developer: The developer selected by the City to implement this TIF Plan pursuant to a Development Agreement. The proposed Developer under this TIF Plan is Capital Mall JC. LLC. its successors and/or assigns. Development Agreement: The agreement to be executed by the City and the Developer setting forth the rights and obligations of the Developer relating to the redevelopment of the Redevelopment Area. the construction of the Redevelopment Project and the payment and/or reimbursement of Reimbursable Project Costs and other Redevelopment Project Costs. Economic Activity Account: The separate segregated account within the Special Allocation Fund into which Economic Activity Taxes are to be deposited. Economic Activity Taxes: Fifty percent (50%) of the total additional revenue from taxes. penalties and interest which are imposed by the City or other Taxing Districts. and which are generated by economic activities within the Redevelopment Project Area. over the amount of such taxes generated by economic activities within the Redevelopment Project Area in the calendar year prior to the adoption of the Redevelopment Project for the Redevelopment Project Area by Ordinance. while tax increment financing remains in effect. but excluding personal property taxes. taxes imposed on sales or charges for sleeping 9 L l t t [ L r .. [ L [ [ L [ [ L [ t t l Q. R. 42411005 12 rooms paid by transient guests of hotels and motels. taxes levied pursuant to Section 70.500. RSMo. licenses. fees or special assessments other than Payments In Lieu ofl'axes and penalties and interest thereon. Financing Costs: All costs reasonably incurred by the Developer. the City or other issuer authorized by the City or the CID in furtherance of the issuance of Private Loans or Obligations. including but not limited to interest. loan fees and points not exceeding one percent (I%) of the principal amount of the loan. loan origination fees not to exceed two percent (2%) of the principal amount of the loan. and interest payable to banks or similar financing institutions that are in the business of loaning money. plus reasonable fees and expenses of the Developer's or City's attorneys (including City Attorney. special TIF counsel, and bond counsel). the Developer's or City's administrative fees and expenses (including planning and/or financial consultants). undenvriters' discounts and fees. the costs of printing any Obligations and any official statements relating thereto, the costs of credit enhancement. if any. capitalized interest. debt service reserves and the fees of any rating agency rating any Obligations. Any costs related to the financing of non-Reimbursable Project Costs shall not be a Financing Cost or a Reimbursable Project Cost. Unless expressly agreed to by Ordinance. Financing Costs shall not include any interest accruing on Developer's equity investment in the Redevelopment Projects. Obligations: Bonds. loans. debentures. notes. special certificates. or other evidences of indebtedness issued by the TIF Commission. the City, or the CJD each with the prior written approval of the City Council. to pay or reimburse all or 10 [ t r t L t t [ t t [ l t [ l t t [ t s. T. u. 42411005 12 any portion of Reimbursable Project Costs incurred or estimated to be incurred. to finance the cost of issuing such Obligations. to establish reserves to refund or secure such Obligations. to finance the interest costs associated with such Obligations or to refund, redeem or defease outstanding Obligations. Ordinance: An ordinance enacted by the City Council. Payments in Lieu of Taxes or .. PILOTS'': Revenues from real property taxes in the Redevelopment Project Area selected for the Redevelopment Project which are to be used to reimburse the Reimbursable Project Costs, which Taxing Districts would have received had the City not adopted tax increment allocation financing. and which result from levies made after the time of the adoption of tax increment allocation financing within the Redevelopment Project Area, and during the time the current equalized value of real property in the Redevelopment Project Area exceeds the Total Initial Equalized Assessed Value of real property in the Redevelopment Project Area. until the designation is terminated pursuant to this TIF Plan which shall not be later than Twenty~ Three (23) years after the Redevelopment Project for the applicable Redevelopment Project Area is approved. excluding. however, the blind pension fund tax levied under the authority of Article Ill. Section 38(b) of the Missouri Constitution. and the merchant's and manufacturer"s inventory replacement tax levied under the authority of Article X. Section 6(2) of the Missouri Constitution. Payments in Lieu of Taxes Account: The separate segregated account within the Special Allocation Fund into which Payments in Lieu of Taxes are to be deposited. II [ L t L L [ [ t t [ [ l l [ [ t t L t V. Private Loans: private loans obtained by the Developer. or its successors. assigns or transferees. from third party private lending institutions to fund Reimbursable Project Costs. W. Redevelopment Area: The real property legally described on Exhibit A for which the City has made a finding that there exist conditions which cause the area to be classified as a Blighted Area, an Economic Development Area. a Conservation Area. or a combination thereof. X. Redevelopment Plan: This Capital Mall Tax Increment Financing Plan. which represents a comprehensive program of the City for redevelopment intended by the payment of certain specified redevelopment costs to reduce or eliminate those conditions. the existence of which qualified the Redevelopment Project Area as an Economic Development Area. Conservation Area, or Blighted Area. or a combination thereof. and to thereby enhance the tax bases of the taxing districts which extend into the Redevelopment Area. Y. Redevelopment Project: The renovation and rehabilitation of the Capital Mall, as set forth in this TIF Plan and in the Development Agreement. l. Redevelopment Project Area: The area selected for the Redevelopment Project. AA. Redevelopment Project Costs: The sum total of all reasonable or necessary costs incurred or estimated to be incurred. and any such costs incidental to this Redevelopment Plan or the Redevelopment Project, as applicable. Such costs include, but are not limited to. the following: I. Costs of studies. surveys. plans and specifications; 12 42411005 12 [ L t t L l t L [ [ [ L t [ l [ t l r 42411005 12 2. Professional service costs. including. but not limited to. architectural. engmeenng. legal. marketing. financial. planning or special serv1ces (except for reasonable administrative costs of the TIF Commission, such costs shall be allowed only as an initial expense, and are included in the costs set forth in this TIF Plan for the Redevelopment Project): 3. 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: 4. Costs of rehabilitation. reconstruction. or repair or remodeling of existing buildings and fixtures and appurtenant facilities such as parking lots. landscaping and lighting: 5. Initial costs for an economic development area (as defined in the Act): 6. Costs of construction of public works or improvements: 7. Financing Costs. including. but not limited to. all necessary and incidental expenses related to the issuance of Obligations, and \Vhich may include payment of interest on any Obligations issued hereunder accruing during the estimated period of construction of the Redevelopment Project for which such Obligations are issued and for not more than eighteen months thereafter. and including reasonable reserves related thereto: 8. All or a po11ion of a Taxing District's capital costs resulting from the Redevelopment Project necessarily incurred or to be incurred in furtherance of the objectives of this TIF Plan and such Redevelopment 13 t t t [ t t l [ L [ L L ' .. [ t c L ~ BB. cc. DD. EE. FF. GG. 42411005 12 Project. to the extent the City by written agreement accepts and approves such costs: 9. Relocation costs to the extent that the City determines that relocation costs shall be paid or are required to be paid by federal or state law; and I 0. Payments in lieu of taxes. Reimbursable Project Costs: The portion of the Redevelopment Project Costs set forth on Exhibit F as Reimbursable Project Costs and which are incurred by the Developer pursuant to a mutually agreeable Development Agreement between the City and the Developer and all Redevelopment Project Costs which are incurred by the City and/or the TIF Commission. Special Allocation Fund: The fund that contains two separate segregated accounts. maintained by the City Director of Finance. into which, as required by the Act. all PILOTS and Economic Activity Taxes are to be deposited. Taxing District: Any political subdivision of the State of Missouri located wholly or partially within the Redevelopment Area having the power to levy taxes. TIF Act: The Real Property Tax Increment Redevelopment Act. Missouri Revised Statutes. Section 99.800 through 99.865. TIF Commission: The Tax Increment Financing Commission of Jefferson City. Missouri. Total Initial Equalized Assessed Value: That amount certified by the County Assessor which equals the most recently ascertained equalized assessed value of each taxable lot. block. tract. or parcel of real property within the Redevelopment 14 [ t [ t [ [ t l [ L [ l [ [ [ [ l L t Project Area immediately after tax increment financing for the Redevelopment Project Area has been approved by the City Council by an Ordinance. III. TAX INCREMENT FINANCING This Redevelopment Plan is adopted pursuant to the TIF Act. The TIF Act enables municipalities to finance certain Redevelopment Project Costs with the revenue generated (a) from PILOTs resulting from increased assessed valuation on new development and. subject to annual appropriations. and (b) from Economic Activity Taxes resulting from increased economic activities in the Redevelopment Project Area. It is initially anticipated that the Developer will be reimbursed on a .. pay-as-you-go .. basis as TIF revenues are collected annually. If market conditions are favorable. the TIF Commission. City. or CID. with the prior written consent of the City in each case. and at the sole discretion of the City Council. may issue Obligations to finance Reimbursable Project Costs. as pennitted by law. The Developer will not request the City to back Obligations with an annual appropriation pledge. In the event Obligations only partially fund Reimbursable Project Costs. to the extent that TIF Revenues exceed the amount required to repay the Obligations. such excess TIF Revenues will be used to reimburse the Developer for Reimbursable Project Costs not paid from the proceeds ofthe Obligations. Immediately after the City Council approves a Redevelopment Project and adopts tax increment financing for the Redevelopment Project Area. the County Assessor shall certify the Total Initial Equalized Assessed Value of the Redevelopment Project Area. Real estate taxes (including penalties and interest thereon) resulting from: (I) all taxes levied on the Total Initial Equalized Assessed Value for the Redevelopment Project Area; (2) the blind pension fund tax levied under the authority of Article Ill. Section 38(b) of the Missouri Constitution, and (3) the merchant's and manufacturer·s inventory replacement tax levied under the authority of Article 15 42411005.12 ![ ~ I t 't t t [ t l l L L L [ [ t [ t c c X. Section 6(2) of the Missouri Constitution. will be payable to Taxing Districts as if tax increment financing were not adopted. PILOTs (including applicable penalties and interest) collected from owners of property within the Redevelopment Project Area will be paid by the County Collector to the City Director of Finance and deposited in the PILOT Account within the Special Allocation Fund. In addition, the Economic Activity Taxes generated within the particular Redevelopment Project Area shall be paid by the collecting Taxing Districts to the City Director of Finance, who shall deposit such funds in the Economic Activity Account within the Special Allocation Fund. I~ REDEVELOPMENTPLANANDREDEVELOPMENTAREA The Tax Increment Financing Commission of Jefferson City. Missouri (the '"TIF Commission"") proposes to undertake the redevelopment of the area described on Exhibit A (the ··Redevelopment Area"") in accordance with the terms of this Redevelopment Plan. For the purpose of redeveloping the Redevelopment Area. the Redevelopment Plan has been prepared and may be recommended to the City Council. Developer will implement the Redevelopment Plan and complete the Redevelopment Project pursuant to a mutually agreeable Development Agreement between the City and the Developer. A. Redevelopment Plan Objectives 42411005 12 The general objectives of this TIF Plan are: I. To reduce or eliminate the blighted conditions of the Redevelopment Area and prevent the blight from spreading. 2. To enhance the tax base of the City and other Taxing Districts by development of the Redevelopment Area to its highest and best use and 16 iL· ! . I I .. It t t t t t L L [ l [ •• L t r .. [ ( encouraging private investment in the Redevelopment Area and the surrounding areas. 3. To discourage commerce from moving operations to another state, create economic stability at in the Redevelopment Area and the City. and facilitate economic self-sufficiency within the Redevelopment Area and the City. 4. To increase employment in the City. 5. To enhance the aesthetics of the Redevelopment Area. 6. To serve as a catalyst for further high quality development and redevelopment in the City. B. Specific Plan Objectives Specific objectives of the Redevelopment Plan are set forth on Exhibit C. V. EXISTING CONDITIONS IN THE REDEVELOPMENT AREA A study of the Redevelopment Area has been conducted documenting the existing blight conditions and is attached as Exhibit D. As detailed in the attached Blight Study Report, the Redevelopment Area's significant blight is a result of the predominance of a combination of factors. including substantially deteriorated and deteriorating site improvements. defective and inadequate street layout. improper and obsolete platting. unsanitary and unsafe conditions. and conditions which endanger life and property by fire. As a result of the predominance of these factors. the Redevelopment Area has become an economic and social liability and a menace to the public health. safety. morals. and welfare in its present condition and use. The extent of the blight and obsolescence of this 1970's mall and the rehabilitation needed to alleviate these conditions at the Capital Mall. after taking into consideration market rate rents and the recent 17 42411005 12 l L t [ [ l [ l L ( [ [ [ economic struggles of the current anchor tenants (e.g .. JC Penney and Sears). has made alternative forms of financing infeasible. Alternative financing that the Developer has explored and considered is traditional debt financing. mezzanine debt financing. and various joint venture/partnership capital contributions structures. The Developer has also considered other avenues of public contribution. such as tax abatement through Chapter I 00 bonds. After exploring these options, it is abundantly clear that without TIF. the private benefits from the rehabilitation efforts do not justify the costs incurred to rehabilitate Capital Mall. VI. REDEVELOPMENT PROGRAM A. Redevelopment Activities 1. Acquisition. Developer has acquired a large portion of the Redevelopment Area. The Developer owned/controlled portion includes the land and improvements consisting of the Capital Mall. but excluding the adjacent JC Penney and Dillards parcels and certain improvements within the Redevelopment Area. The tax parcels owned by the Developer are as follows: Tab I e2-D 0 d/C eve oper wne 'ontrol led P reels a 1002090002001001 1002040003002036 1002040004000025003 1002090002001004 100209002001002 1002090002001005 1002090002001006 1002040004000025 1002090001001022 1002090001001024 100209001002011 2. Developer Responsibilities. To achieve the objectives ofthis TIF Plan. the Developer will perform or cause to be performed the design. rehabilitation 18 42411005 12 [ [ L t [ L t ( l t l l [ [ ,, L [ ( [ ( and construction of the Redevelopment Project in accordance with this TlF Plan and the Development Agreement. which will be executed between the City and the Developer. 3. Relocation Assistance. Although there is no guarantee that expiring tenant leases \Viii be renewed. no businesses or other occupants shall be displaced as part of this Redevelopment Plan or the Redevelopment Project. While it is not anticipated that there will be a need for any relocation assistance. a Relocation Plan has been attached hereto as Exhibit N. as required by the TIF Act. B. General Land Use and Comprehensive Plan A description of the proposed Redevelopment Project is attached hereto as Exhibit B. After completion of the Redevelopment Project. the Redevelopment Area will continue to function as the Capital Mall. and it shall remain a regional commercial center. The Redevelopment Project and Redevelopment Area are currently zoned C· I. Neighborhood Commercial. During and after construction of the Redevelopment Project. it shall be subject to the applicable provisions of the City's zoning ordinance as well as other codes and ordinances as may be amended from time to time. The Redevelopment Plan is consistent with the Comprehensive Plan of the City. For example. the Comprehensive Plan of the City states that "[f]uture development should be encouraged to be designed in a unified scheme to limit access points with internally accessed out-parcels.·· The Comprehensive Plan credits the Capital Mall for .. better site development designs'' under the goals of the City's Comprehensive Plan. C. Project Schedule 19 4241100512 [ L l [ [ ~ t ( [ ( t l l [ [ t L t r The proposed development schedule is set forth on Exhibit E. which is incorporated into this subsection as though set out in full. VII. FINANCING PLAN A. Special Allocation Fund The City Treasurer shall establish and maintain the Special Allocation Fund. which shall contain two separate segregated accounts. PILOTs shall be deposited into the PILOT Account within the Special Allocation Fund. and Economic Activity Taxes shall be deposited into the Economic Activity Account within the Special Allocation Fund. PILOTs and Economic Activity Taxes so deposited and any interest earned on such deposits will be used and pledged for the payment of Reimbursable Project Costs. including the retirement of Obligations. if any. and for the possible distribution to the Taxing Districts. in the manner set forth in Article IX of the Redevelopment Plan. B. Estimated Project Costs Redevelopment Project Costs mean and include the sum total of all reasonable and necessary costs incurred or estimated to be incurred. and any such costs incidental to a redevelopment plan or redevelopment project. as applicable. in implementing the Redevelopment Plan and the Redevelopment Project. Reimbursable Project Costs mean and include all reasonable and necessary costs allowed by the TIF Act. incurred by the City and/or the TIF Commission and those specified Reimbursable Project Costs incurred by the Developer pursuant to a mutually agreeable Development Agreement between the City and the Developer in such amounts as are set forth on Exhibit F. Currently. total Redevelopment Project Costs are estimated at Thirty Six Million 20 424 I 1005 12 '[ [ [ [ ( t t [ Eight Hundred Eighty Three Thousand Nine Hundred Seventy Five Dollars ($36.883,975). plus Financing Costs. Neither the City nor the TIF Commission shall have any obligation to reimburse any Reimbursable Project Cost unless and until funds are available in the Special Allocation Fund to pay such reimbursement. Further, notwithstanding anything to the contrary contained in this TIF Plan, all of Developer's rights under this TIF Plan are subject to Developer's compliance with all of the obligations of this TIF Plan and the Development Agreement. including but not limited to. the completion (as such term is defined in the Development Agreement) of the Redevelopment Project pursuant to the terms and conditions of this TIF Plan and the Development Agreement. All Reimbursable Project Costs approved and certified by the City will bear an interest rate equal to the actual rate of interest paid on amounts used to fund Reimbursable Project Costs from the time such Reimbursable Project Costs are incurred to the time they are reimbursed as Reimbursable Project Costs. This interest shall be classified as Reimbursable Project Costs and shall be reimbursed according to the reimbursement process provided in the Development Agreement. The costs of issuing any Obligations shall also be Reimbursable Project Costs, but only after such costs are approved. on an Obligation-by-Obligation basis. in writing by the City Council. Estimated Redevelopment Project Costs and Reimbursable Project Costs are set out on Exhibit F. C. Source of Funds Anticipated sources and amounts of funds to pay all of the Redevelopment Project Costs are shown on Exhibits F and G. PILOTs and Economic Activity Taxes shall be available for reimbursement of Reimbursable Project Costs on an as-collected basis or to retire Obligations that may be issued in 21 42411005 12 ![ accordance with this plan. the proceeds of which will be used to defray Reimbursable Project Costs at the beginning of the Redevelopment Project. Estimated Reimbursable Project Costs are set forth on Exhibit F and far exceed the expected PILOTs and Economic Activity Taxes available for the Redevelopment Project. Assuming a pay·as-you-go framework, it is estimated that PILOTs and Economic Activity Taxes will pay for approximately Ten Million Six Hundred Four Thousand Nine Hundred Eighty Seven Dollars ($10.604,987) (present valued at 7.5%) of Redevelopment Project Costs. As such. the ratio of TIF assistance to total Redevelopment Project Costs is approximately Twenty Eight Percent (28%). As will be stated in the Development Agreement and Cooperative Agreement. all revenues collected from the proposed CID Sales Tax shall be available for reimbursement of Redevelopment Project Costs and Reimbursable Project Costs on an as-collected basis or to retire Obligations that may be issued. the proceeds of which will be used to defray Redevelopment Project Costs and Reimbursable Project Costs at the beginning of the project. Assuming a pay-as-you-go framework, it is estimated that revenues from the CID Sales Tax will pay for approximately Five Million Ninety One Thousand Five Hundred Thirty Seven Dollars ($5.091.537) (present valued at 7.5%) of Redevelopment Project Costs (plus interest). Developer anticipates that it will obtain financing or provide capital to make up the difference between total Redevelopment Project Costs and all revenues available for reimbursement of Redevelopment Project Costs discussed above. Calculations of expected proceeds of PILOTs are based on current real property assessment formulas and current property tax rates. both of which are subject to change due to many factors, including statewide reassessment. the effects of real property classification for real property tax purposes. and the rollback in tax levies resulting from reassessment or classification. 22 4241100512 ( L C [ ( Likewise. calculations of expected additional Economic Activity Taxes are based on current sales tax estimates and projected sales tax gro\\1h. and are based on numerous factors set forth in this TIF Plan. and may be subject to change or adjustment for multiple reasons. including general market conditions. 42411005 12 I. Payments in Lieu ofTaxes a. Most Recent Assessed Valuation The total initial equalized assessed valuation of the Redevelopment Area according to records at the Cole County Assessor's Office is Eight Million Five Hundred Ninety Seven Thousand One Hundred Eighty Two Dollars ($8.597.182). b. Anticipated Assessed Valuation and Payments in Lieu of Taxes This Redevelopment Plan. for the reasons described above. estimates that the Redevelopment Area's assessed value following completion of the Redevelopment Project will be Nine Million Forty One Thousand Twenty Two Dollars ($9.041.022). increasing each year by two percent annually and. during the first five years. increasing by One Hundred Eighty One Thousand Four Hundred Seventy Two Dollars ($181.472) annually on account of the future development of four vacant outparcels. c. Surplus PILOTs The amount of PILOTs in excess of Reimbursable Project Costs. not counting any retention of funds for the payment of future Reimbursable Project Costs. will be declared as surplus and will be available for distribution to the various Taxing Districts in the Redevelopment Project Areas in the manner provided by the Act. 23 2. Economic Activity Taxes a. Current Economic Activity Taxes The current annual tax revenues resulting from economic activities in the Redevelopment Project Area are approximately Five Million Five Hundred Eighty Four Thousand One Hundred Sixteen Dollars ($5,584.116), which is based on the current estimated total annual sales of Seventy Two Million Two Hundred Eighty Six Thousand Two Hundred Eighty Six Dollars ($72.286,286). b. Anticipated Economic Activity Taxes Upon completion of the Redevelopment Project. the total annual sales in the Redevelopment Project Area are estimated to be Seventy Five Million Seven Hundred Eighty Two Thousand Eighty Hundred Sixty Seven Dollars ($75.782.867). The increase in sales by year is shown on Exhibit H. as are Fifty Percent (50%) of the resulting Economic Activity Taxes available to pay Reimbursable Project Costs. c. Surplus Economic Activity Taxes The amount of Economic Activity Taxes in excess of Reimbursable Project Costs. not including the retention of funds for the payment of future Reimbursable Project Costs. will be declared as surplus and will be available for distribution to the various Taxing Districts in the Redevelopment Project Area in the manner provided by the Act. D. Nature and Term of Obligations Although it is not anticipated that Obligations will be immediately issued. Obligations may be issued. at the sole discretion of the City Council, pursuant to the 24 4241100512 [ [ ( ( l [ ( Redevelopment Plan for a term not to exceed Twenty-Three (23) years at an interest rate determined by the issuer and underwriter and approved by the City. Revenues received in excess of One Hundred Percent ( 100%) of funds necessary for the payment of costs of issuance, principal. and interest on the Obligations may be used to call Obligations in advance of their maturities. To the extent there are any excess TIF Revenues following the retirement of Obligations. such excess shall be used to reimburse the Developer for Reimbursable Project Costs not paid from the proceeds of the Obligations. Any remaining TIF revenues shall be declared a surplus and distributed to the Taxing Districts (but only after a determination that there are no Reimbursable Project Costs expected in the future). E. Proceeds of Obligations The proceeds of Obligations. if issued at the sole discretion of the City Council. shall be used to pay for Reimbursable Project Costs incurred. F. Evidence of Commitment to Finance Attached as Exhibit G and Exhibit I. Developer has included a Sources of Funds and evidence of commitment to finance that portion of the Redevelopment Project Costs that are not paid for by revenues from PILOTs. Economic Activity Taxes. and CID Sales Taxes. The commitment to finance is contingent upon the approval and adequacy of TIF and CID assistance. VIII. PROCEDURES FOR PAYMENTS TO THE SPECIAL ALLOCATION FUND A. Payments in Lieu ofTaxes Following the designation of a Redevelopment Project Area, for as long as the Redevelopment Project Area is subject to tax increment financing. the County Assessor shall 25 42411005 12 [ [ t [ ~ L ( E ( determine the assessed value of such Redevelopment Project Area without regard to tax increment financing. The County Collector and City Collector shall collect sums due from real property within such Redevelopment Project Area in accordance with the current equalized assessed valuation and tax levies in effect for each year. The amount collected which represents PILOTs shall be paid by the County Collector and the City Collector within Thirty (30) days after collection to the City Treasurer who shall immediately deposit the amount paid into the PILOT Account within the Special Allocation Fund. to be utilized and expended in accordance with the Act and the Redevelopment Plan. B. Economic Activity Taxes Following the designation of a Redevelopment Project Area. for as long as the Redevelopment Project Area is subject to tax increment financing. Economic Activity Taxes shall be determined and deposited into the Economic Activity Fund within the Special Allocation fund in accordance with the following procedures: I. Documentation of Economic Activity Taxes Paid by Taxpayers The Developer will use commercially reasonable efforts to include in all future leases, deeds and other instruments of conveyance provisions to ensure that no later than Thirty (30) days following payment of any Economic Activity Tax, there is presented to the City Treasurer documentation of the type and amount ofthe Economic Activity Taxes paid by all persons and entities operating within the Redevelopment Project Area. The documentation presented must clearly establish the type and amount of taxes paid and transactions that generated Economic Activity Taxes and may include actual tax returns. original sales records or similar specific business records of the person or entity operating within the Redevelopment Project Area. its tenants and successors in interest. Each 26 424110\l5.12 [ L [ [ l l l L L L l L ( l L l l L l person or entity collecting and remitting sales tax within the Redevelopment Project Area shall also be required to provide an authorization allowing the Missouri Department of Revenue to release to the City the aggregate sales tax figures for all of such persons' or entities' businesses within the Redevelopment Project Area. 2. Certification by City Council The City CounciL following reasonable research and investigation. using independent consultants. accountants and counsel when appropriate. shall certify the nature and amount of Economic Activity Taxes payable by each Taxing District from which Economic Activity Taxes are due. 3. Presentation to Taxing Districts The City Council. or its authorized designee. shall deliver by mail or hand delivery its certification of Economic Activity Taxes payable by each Taxing District to the governing body of each such Taxing District. Each Taxing District shall within Thirty (30) days of receiving the certification or within Thirty (30) days after receiving any such Economic Activity Tax. whichever is later. appropriate the amount of Economic Activity Taxes actually received and pay the appropriate sum to the City Treasurer. 4. Deposit of Funds The City Treasurer shall deposit the payments of Economic Activity Taxes received from the respective Taxing Districts in the Economic Activity Account in the Special Allocation Fund. to be utilized and expended in accordance with the Act and the Redevelopment Plan. IX. DISBURSEMENTS FROM SPECIAL ALLOCATION FUND 27 42411005 12 [ L t [ [ L l l l l l [ l l L l l l l All disbursements from the Special Allocation Fund will be made by the City Treasurer out of the two separate segregated accounts maintained within the Special Allocation Fund for PILOTs and Economic Activity Taxes in proportion to their respective balances at the time of making a disbursement. On each distribution date. the City Treasurer shall disburse from the Special Allocation Fund in the following manner and order of preference: First. to pay the reasonable Reimbursable Project Costs of the City and the TIF Commission; Second. to pay Debt Service on Obligations at the times and in the amounts provided for by the terms of the Obligations. if any; Third. to pay for or reimburse Developer for Reimbursable Project Costs that were not financed by Obligations: Fourth. following the completion of the Redevelopment Project. the retirement of all Obligations. and the payment of and/or reimbursement of Developer, the City. and the TIF Commission for all Reimbursable Project Costs incurred or anticipated. funds remaining in the Special Allocation Fund shall be disbursed by the City Treasurer to the appropriate Taxing Districts in accordance with the Act. X. COST -BENEFIT ANALYSIS A cost-benefit analysis showing the economic impact of this TIF Plan on each Taxing District is included in the analysis attached as Exhibit J. In addition. the cost-benefit analysis shows the fiscal impact on the jurisdictions if the Redevelopment Project is undertaken or not undertaken.1 The projections in Exhibit J are based on market assumptions, including those 1 Please note that fiscal impact may also include the impact of additional City services associated with the Project, but because those services are already provided and because the Redevelopment Project is at an existing commercial facility, the impact on additional City services is likely negligible. As such. for purposes of the fiscal impact analysis. this TIF Plan only includes the fiscal impact of redirected tax revenues via TIF. 28 42411005 12 [ [ [ [ [ [ l l L l l [. [ L L l l L [ outlined in the assumptions and projections contained in the attached Exhibit J and Exhibit H. These market assumptions and the Cost/Benefit analysis shows the market feasibility of the proposed Redevelopment Project if the Redevelopment Project is built and is not built. Based on these assumptions and economic impact analysis, the Redevelopment Project is not only feasible, but a much-needed boost to the Jefferson City economy. The cost-benefit analyses and the tax impact analyses were constructed by Polsinelli PC and provides sufficient information to evaluate and support the financial feasibility of the Redevelopment Project as proposed. Based on the Pro Forma. tax impact analyses and cost- benefit analyses, the projected Ten Million Six Hundred Four Thousand Nine Hundred Eighty Seven ($1 0,604.987) (present valued at 7.50%) of TIF Revenue generates additional tax revenue to all current taxing jurisdictions (including the State) of Eighty Eight Million Seven Hundred Seventeen Thousand Three Hundred Seventeen Dollars ($88, 717.317). after subtracting the tax revenue redirected by TIF and considering the potential loss of tax revenue if the Redevelopment Project fails to move forward. The total anticipated increase in tax revenue generated by the Redevelopment Project that benefits only the City is estimated at Fourteen Million Eight Hundred Five Thousand Fourteen Dollars ($14.805,014). XI. TERMINATION OFT AX INCREMENT FINANCING Tax increment financing for the Redevelopment Project Area shall remain in effect until the Redevelopment Project has been constructed, all Obligations repaid. and all Reimbursable Project Costs incurred or to be incurred pursuant to this TIF Plan have been reimbursed. At such time (but in no event later than Twenty-Three (23) years from the date on which tax increment financing is adopted for the Redevelopment Project Area), tax increment financing shall be terminated by the adoption of an Ordinance of the City Council terminating the designation of 29 42411005 11 1 [ t [ [ l l l L l l L l l l L l r L L tax increment financing in any such Redevelopment Project Area, or by any other method authorized by the TIF Act. XII. PROVISIONS FOR AMENDING THE TAX INCREMENT PLAN The Redevelopment Plan and Project may be amended pursuant to the provisions of the TIF Act. XIII. REQUIRED STATUTORY FINDINGS With the approval of this TIF Plan. the TIF Commission and the City Council have. as required by the TIF Act. made the findings set forth below. based upon the record of the public hearing on the Plan. including but not limited to the blight study attached as Exhibit D and the affidavit of the Developer attached as Exhibit K. Blighted Area. The Redevelopment Area on the whole is a Blighted Area. Expectations for Development-"But For TesC. The Redevelopment Area on the whole has not been subject to growth and development through investment by private enterprise and would not reasonably be anticipated to be developed to its highest and best use without the adoption of tax increment financing due to the substantial cost to ameliorate the blighted condition ofthe Redevelopment Area. Conforms to Comprehensive Plan of the City. This TIF Plan is in conformity with the City's Comprehensive Plan. Date to Adopt Redevelopment Project. The Ordinance approving the last of the Redevelopment Projects to be approved will not be adopted later than ten years from the adoption of this Tl F Plan. 30 424 I Hl05 12 Date to Co mplet e Red eve lopm ent. T he es tim ated dat e to co mpl ete th e Redeve lop ment Project has been sta ted and s uc h da te is not more th an twe nt y-th ree (23) yea rs fr o m th e adop t io n o f th e Ordin ance approv ing th e Redeve lo pm ent Projec t. Dat e to Retire Obligati ons. In th e eve nt Obli ga ti ons are iss ued to finan ce Reimbur sa bl e Proj ec t Cos ts. it is anticipat ed that suc h O bli ga ti ons will be retire d in less than Twe nt y-Thr ee (23) yea rs fr o m th e ad opti on o f th e Ordin a nce approv in g th e Redeve lopm ent Proj ec t. Re locati on Ass istan ce . Beca use th e Redeve lopm ent Pl an does not di spl ace an) bu sin esses or occ up ant s in th e Redeve lopm ent Area. th e re will be no nee d fo r re loc ati on ass istance. Neve rth eless. a Re locati on Pl an has bee n in c lud ed as Ex hibit N. Cost-B e nefit An a lys is . T he cos t-benefit ana lys is includ ed o n Ex hibit J s hows the eco nomi c imp ac t of thi s TIF Pl an on each Tax in g Di strict. The an a lys es s how th e impa ct on th e eco no my if the Redeve lopm e nt Proj ec t is built a nd if th e Rede ve lo pm ent Pr oject is not built pursuant to thi s TI F Plan . The ana lyses in c lud e a fi sca l impa ct stud y on eve ry Tax in g Dis tri ct. and s uffici ent informati o n to eva lu ate wheth e r th e Red eve lo pm ent Projec t as pro posed is financiall y fe as ibl e. Gambling Es ta bli shm ent. Thi s TI F Pl an does not include th e initial deve lo pm e nt or redeve lo pment of any gamblin g es tabli shm e nt as defin ed in th e TIF Act. Re po rting Requireme nt s. The Co mmi ss ion s ha ll re po rt to th e Direc to r of the De partm ent of Eco no mi c Deve lopm e nt fo r th e Stat e o f Mi sso ur i by th e las t day of Febru ary o f eac h yea r th e name. address . ph o ne number and prim a ry line of bu s in ess o f any bu sine ss th at re loca tes to th e Redeve lo pm ent Area. Pursua nt to th e Ac t. th e Director fo r th e Departm ent of Eco nomi c Deve lo pm ent is required to co mpil e and re port th e sa me to th e gove rn or. th e speaker of the house and th e pr es id ent pro temp ore of th e Se nat e on th e la st da y of April o f eac h yea r. 3 1 42411 005 12 Red eve lo pment Projec t Are a. The Rede ve lopment Proj ect Area se le cted for th e Red eve lop ment Pr ojec t include s onl y th ose parce ls of real propert y and improvement s direct ly and sub sta nti a ll y ben efited by th e proposed Rede velo pment Project. Co nstructi on activity may tak e place and improve ment s ma y be constructed on land adjacent to. but not included within. th e Rede ve lopment Area which benefit s the Red eve lo pment Area. but s uch costs associated th erewith will not be Reimbursa ble Project Costs. 32 42411005 12 42411 00 < 12 EX HIBIT A DEPI CTION AN D L EGA L D ESC RIPTION OF RED EVELOPM ENT A R EA AN D R ED EVELOPMENT PROJ ECT A REA A· I EXHIBIT A Pat1 of th e Sou th Half of Sect ion 4, and part of the No rth east Quarter of the Northwest Quarter and part of th e West Half of the Northwest Quarter o f th e Nort heast Quarter of Section 9. a ll in Townsh ip 44 North . Range 12 W. in the Cit y of Jefferson. Co le Co unt y. Mis so uri. more partic ularl y described as follows : BEGINNING at the northeast corner of the We st Half of the Nort hwes t Quarter of the Nort hea st Quarter of said Section 9: thence S4 °26'19 .. E, 760.31 feet to the nottherly lin e of Old U.S. Route No. 50 (now Cou ntry Club Drive): th ence S4 °44'3TE. cross in g said Coun try Cl ub Drive right-of-way. I 01 .2 0 feet to a point on the sou th erly line thereof and said comer being the northwest comer of a tra ct of land described by deed of record in Book 136. page 132. and on the easterly boundary of a tract described by deed of record in Book 239. page 903, Co le County Recorder's Office; th ence S4°34'31 "E , a lon g th e ea ster ly boundary of sai d tract de sc ribed in Book 239 , page 903 , 375.37 feet to th e sou th easterly co mer thereof. sa id comer being on th e northerly lin e of U.S. Route No. 50: th ence S75 °33'03"W. along the northerly line of sa id U.S. Route No. 50. 77 .73 feet ; thenc e N88 °24'20"W , alo ng the north er ly lin e of said U.S. Route No. 50. 125.05 feet to the so uth easte rl y corner of a tract of land described by deed of record in Book 362, page 5 19. Co le Co unt y Recorder's Office: th e nc e N7 °57'56"W, a long the easterly boundary of sa id tra ct de sc ribed in Book 362. page 519. 346.95 feet to th e northeasterly corner thereof. sa id co rn er being on th e so uth erly lin e of th e aforesaid Coun try Cl ub Drive; thence S77 °59'08 .. W. a long the sou therl y lin e of said Co untry Club Drive , 334 .2 1 feet to the nort hwester ly corne r of a tract of land described by deed of record in Book 3 15 . page 773 . Co le County Recorder's Office; thence SI4°07'00"E. along the westerly boundary of said tract described in Book 3 15, page 773. 273.73 feet to the sout hwester ly corner thereof. said corner being on the northerly lin e of the aforesaid U.S. Route No. 50: thence N88 °24'20"W , along the northerly lin e of said U.S. Route No. 50. 765.43 feet ; thence S75 °24'00"W. along the nort herl y lin e of sa id U.S. Route No . 50. 36.12 feet to the sou th eas ter ly comer of a tract of land described by deed of record in Book 298. page 83. Cole Co unt y Recorder's Office ; thence N3 °07'58"W. along the easterly boundary of said tra ct described in Book 298. page 83. 96 .22 feet to th e northea sterly corner thereof. said corner being on the southerly line of the aforesaid Co untry Club Drive; thence continuing N3 °07'58"W. I 02.09 feet to th e northerly lin e of said Cou nt ry Club Drive: th ence S78 °00'23"W , alo ng th e northerly lin e of said Co unt ry Club Drive. 104.04 feet to th e mo st easter ly comer of th e U.S. Highway 50 connection right-of-way de sc ribed by deed of record in Book 240. page 660. Co le Co unt y Recorder"s Office: th ence, along the nort herl y line of said connection right-of-way. the following courses: N85 °29'44"W. 264.86 feet; thence N49 °07'58"W , 230.71 feet: th ence N47 °05'00"W. 313.86 feet to th e easterly lin e of West Truman Boulevard (former ly known as Nort h Ten Mile Drive ): th ence N8 °34'28"E. along the easterly line of said West Truman Boulevard , 490.41 feet: thence N6 °37'2 1 "E. along the ea sterl y lin e of said We st Truma n Boulevard , 401.12 feet to the northerly end of the aforesaid con nection right-of-way ; th ence N79 °05' 18 .. W. 36.28 feet to the cent erl in e of West Truman Boulevard (as described in Parcel I ofthe deed of record in Book 626 . page 565 Co le Co unty Recorder's Office); thence , leavi ng th e aforesaid connection right-of-way lin e, described in Book 240. page 660, N3 °27'09''E. along the ce nterline of West Truman Boulevard (as per sa id Parcel I description), 11 3.55 feet : then ce N23 °44'10''E. along the cen terlin e of West Truman Bou levard (as per said Parcel I description), 233 .0 3 feet to th e so uth erly end of the property deeded to the City of Jefferson for th e street right-of-way . now known as West Truman (formerly known as Not1h Ten Mile Drive) as per deed of record in Book 275. page 2 14 . Co le County Recorder's Office; th ence N85 °03'03"E. along the so utherl y lin e of said property described in Book 275, page 2 14. and along the sou th er ly A-2 42411 005 12 EXHIBIT A boundary of the propert y de sc ribed by dee d of re co rd in Book 555 . page 698. along the so utherl y bo unda ry of El Mercad o De ve lopment. ection I . as per plat of record in Pl at Book II. page 402 and along the so uth erl y bo undary of th ose prope rtie s de sc ribed by deed s o f re co rd in Boo k 529 . pa ge 947 and in Book 462. pa ge 649. Co le Co unt y Rec order"s Office. 1461.95 feet: thence N86 ° ll 'll"E. alo ng the so uth erl y boundary of sa id pro pert y desc ribed in Boo k 462. pa ge 649 and along th e so utherl y boundary of th e prop ert y de sc ribed by deed of record in Book 546. page 150 , Co le Co unty Record er· s Office, 692.99 fee t to th e so uthea sterly corner o f sa id property de sc ribed in Bo ok 546 , page 150 and said corner bein g on the westerl y bo undary of Monticell o Acre s, Section Nine. as per plat of record in Plat Boo k II , page 859. Co le Co unt y Reco rd er 's Office; then ce S3 °59'18"E. along th e westerly bo undary of Monti ce ll o Acres, Section Nine , 700.95 fee t to th e so uthwe sterly corner th ereof. being a po int on the so uth line of sa id Section 4, Town ship 44 North. Range 12 We st. at the so uthea sterl y comer of the property de scribed by de ed of rec ord in Boo k 629. page 196. Co le Co unt y Reco rder"s Office: th e nce S86°32'02"W. along the Section Line. 389.43 feet to the POINT OF BEG INN IN G. A-3 42411005 12 EXHIBIT B PROJECT DESCRIPTION PROPO SE D CAPITAL MALL RE NOVATION S J. Exterior A. Parking Lot -Repavin g. ren ova tin g. res urfac in g. install in g adequate li ghtin g and repairin g ex istin g li ghtin g. B. Structure/fa ca de -Repair and re place roof. repair a nd replace RM U"s. repair and repla ce waterproofing ex te ri o r construct ion j o int s, in stall and improve exteri o r fa~ad e with cu ltured sto ne and ma so nr y. install co mp os ite met a l panel s and refonn parape t. in stall new glazing fo r entry and windows. in stall fa bri c aw nin gs and dec ora ti ve li ght fixture s with wa ll was h. install internally illumin ated fro sted glass tower at entry. in stall so lar panelin g, in stall pylo n s ig ns and additi o na l exterior signa ge. in stall so lar panel s. a nd repair. rep lace and in stall common area HV AC units. II. Interior 42411005 12 A. Facade -Upgrad e and in stall new li ghtin g. in stall new furniture fi xture and equipment. rep lace o utdated interi or signage and fa~ade structures , replac e interi o r fl oo rin g. moderni ze sho ppin g and co mm on areas . in sta ll landscap in g and paint interi or. B-1 EXHIBIT C SPE CIFIC OBJECTIVES OF REDEVELOPMENT PLAN I . To re du ce o r remedi ate th e bl ig htin g co nditi o ns preva lent in th e Redeve lo pm en t Area : 2. To cause th e Redeve lo pm ent Area to be redeve loped th ro ugh th e re novat io n o f th e Ca pit a l Ma ll. toge th e r with all a meniti es, land sc apin g. a nd in fras tru cture. 3. To ex pand the tax ba se o f th e C it y by e nco urag in g pri va te in ves tm ent tn th e Redeve lopm ent Area. 4. To in c rease th e re tail shoppin g and e mpl oy ment opp o nuniti es for th e Cit y"s res id ent s. fac ilitate eco nomi c se lf-s uffi c ie ncy within Je ffe rso n Cit y. a nd se rve as a ca ta lys t fo r funh er hi gh qu alit y deve lopm ent or redevelopm ent in th e Cit y. C-1 42411 00512 EXHIBIT D BLIGHT STUDY CAPITAL MALL 3600 COUNTRY CLUB DRIVE JEFFERSON CITY, COLE COUNTY, MISSOURI See Attached. D-1 4241 1005 12 Va lbridge Property Advisors 1 Shaner Appraisals, Inc. 10990 Quivira Road Suite 100 Over1and Park. Kansas, 6621 0 913.451 .1451 913.529.4121 fax va/bridge.oom Val bridge PROPERTY ADVISORS Sha.wr Appraisals. Inc. July 30, 2013 Mr. Rob Kingsbury Farmer Holding Company 221 Boliver Street, Suite 400 Jefferson City, Missouri, 65101 Re: Blight analysis of the Capital Mall located at the 3600 Country Club Drive in Jefferson City, Cole County, Missouri 65109 . Shaner File Number: 12638 Dear Mr. Kingsbury: I am pleased to transmit the attached Blight Study Report that has been prepared for the above referenced property. The purpose of this report is to determine whether the Study Area is blighted, as defined in Section 353.020, Section 67.140, and Section 99.805 Revised Statutes of Missouri. This analysis represents an accumulation of my findings based on research and investigations performed as of the report's effective date, December 9, 2012 . The attached report sets forth the data, research , investigations, analyses, and conclusions for this report. The Study Area is comprised of 14 parcels with a total site area of 78.27 acres of land. The Study Area is presently a combination of both unimproved land and improved structures that are being utilized for retail purposes such as banking, food service, and other general retail uses. As determined in the following study, it is my opinion that the Study Area represents a ·blighted area · as is defined in Section 353 .020 of the Missouri Redevelopment Corporations Law and in Section 99.805 of the Real Property Tax Increment Allocat ion Redevelopment Act of the Revised Statutes of Missouri . Primary blighting factors include: • Age and obsolescence • Inadequate or outmoded design • Physical deterioration/deterioration of site improvements • Defective or inadequate street layout • Unsanitary or unsafe conditions • Improper subdivision and/or obsolete platting • Conditions endangering life or property by fire and other causes As a result of the age, obsolescence, inadequate and outmoded design and physical deterioration the Study Area has become and economic and social liability and those conditions are conducive to the inabi lity to pay reasonable taxes. Therefore, it is my opinion that the Study Area is a blighted area as defined in Section 353.020 of the Revised Statutes of Missouri. Further, it is my opinion that the Study Area is a blighted area as defined in Section 99.805 of the Revised Statutes of Missouri because the Study Area suffers from the predominance of defective and inadequate street layout, unsanitary and unsafe conditions. improper subdivision and obsolete platting, deterioration of site improvements, and 42415698.4 Mr. Ro b Kings bur)' July 30, 2013 Page 2 conditions endangering life and property by fire and other causes and as a result of such factors the Study Area constitutes an economic and social liability and a menace to the public health and safety in its present condition and use. I have reached these conclusions based on the facts shown in the following report. This letter is invalid as an opinion of blight if detached from the report. which contains the text, exhibits and Addenda. Sincerely, Shaner Appraisals, Inc. Jason Roos, MAl Director State Certified General Appraiser, Missouri No . 2009011367 42415698 .4 Capital Mall Blight Study Certification I certify that, to the best of my knowledge and belief.· • The statements of fact contained in this report are true and correct • The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, impartial and unbiased professional analyses, opinions and conclusions. • I have no present or prospective interest in the property that is the subject of this report, and no personal interest with respect to the parties involved. • I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. • My engagement in this assignment was not contingent upon developing or reporting predetermined results. Furthermore, my engagement was not conditioned upon the report producing a specific opinion of blight or the approval of any public incentives or the approval of a loan. • My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined opinion of blight that favors the cause of the client, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this report. • The reported analyses, opinions, and conclusions were developed, and this report has been prepared , in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice. • The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. • Laird Goldsborough, MAl. MRE provided assistance to the person(s) signing this certification. • Jason Roos. MAl made a personal inspection of the property that is the subject of this report. • As of the date of this report, Jason Roos , MAl has completed the continuing education program of the Appraisal Institute. • I have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three -year period immediately preceding acceptance of this assignment. Jason Roos. MAl State Certified General Appraiser, Missouri No . 2009011367 SHANER APPRAISALS, INC. 42415698.4 Certification Capital Mall Blight Study ExTuoltDINARY AssuMP110HS AND HYPOTHETICAL CoHomoNs Extraordinary Assumption: An assumption, directly related to a specific assignment. which, if found to be false, could alter the appraiser's opinions or conclusions. Extraordinary assumptions presume as fact otherwise uncertain information about physical , legal , or economic characteristics of the subject property; or about conditions external to the property such as market conditions or trends; or about the integrity of data used in an analysis. There are no extraordinary assumptions employed in this report. Hypothetlul Condition: That which is contrary to what exists but is supposed for the purpose of analysis. Hypothetical conditions assume conditions contrary to known facts about physical, legal , or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis. There are no hypothetical condi tions employed in this report. 1. None SHANER APPRAISALS, INC . 424 15698.4 OTHER CONDillONS Extraordinary Assumptions and Hypothetical Conditions 4 5 6 7 8 9 10 11 12 13 14 Capital Mall Blight Study I NT RODUCTION Identification of the Property O.Kription The subject consists of 14 parcels located generally near 3600 Country Club Drive, Jefferson City, Cole County, Missouri, although each parcel has a separate address. The subject contains four parcels of vacant land and seven parcels that have been improved with retail buildings. The following table summarizes the 14 parcels . ...... ., 1002090002001001 1,225,343 3546 Country Club Drive 1002040004000025 355 ,450 8.16 Vacant land 3550 Country Club Drive 1002040004000025003 219,542 5.04 26,390 Improved with Movie Theater 3524 Country Club Drive 1002090001001024 65,776 1.51 Vacant land 3530 Country Club Drive 1002090002001004 31,799 0 .73 2,415 Improved with Restaurant 3516 Country Club Drive 1002090001001022 105,851 2.43 Vacant land 3536 County Club Drive 1002090002001002 29,621 0.68 Ground lease with Restaurant 3721 West Truman Blvd. 1002040003002036 353 ,272 8.11 Ground lease with Grocery 3601 Country Club Drive 1002090002001006 55,321 1.27 3,820 Improved with Restaurant 3533 Country Club Drive 1002090002001005 84,071 1.93 4,285 Improved with Bank 3515 Country Club Drive 1002090001002011 74,923 1.72 Vacant land 3600 Country Club Drive 1002040003002037 328 ,743 7.55 61,940 JC Penney's 3600 Country Club Drive 1002040004000025001 182,594 4 .19 Improved with Parking 3600 Country Club Drive 1002090001001023 8 Dillard Tot011l Identification of the Problem Purpose The purpose of this blight study is to investigate and determine if blight conditions exist in the proposed Study Area according to Missouri's Urban Redevelopment Corporations Law and Real Property Tax Increment Allocation Redevelopment Act as defined below. Definitions Missouri Urban Redevelopment Corporations Law, Section 353 .020 (2), RSMo. -"Blighted area", that portion of the city within which the legislative authority of such city determines that by reason of age, obsolescence, inadequate or outmoded design o r physical deterioration have become economic and social liabilities, and that such conditions are conducive to ill health, transmission of disease, crime or inability to pay reasonable taxes. Missouri Real Property Tax Increment Allocation Redevelopment Act, Section 99.805(1), RSMo.-"an area which, by reason of the predominance of defective or inadequate street layout, unsanitary or unsafe conditions, deterioration of si te improvements, improper subdivision or obsolete platting, or the existence of conditions which endanger life or property by fire and other causes, or any combi nation of such factors, retards the provision of housing accommodations or constitutes an economic or social liability or a menace to the public health, safety, morals, or welfare in its present condition and use." SHANER APPRAISALS, INC. 42415698.4 Introduction • 1 Capital Mall Blight Study Effective Date The effective date of this blight study is December 9, 2012. The property was inspected by Jason Roos, MAl on December 9, 2012. Date of Report The date of this report is January 31, 2013. A comparison of the date of the report to the effective date of the blight study indicates that our conclusions are reflective of current market conditions. Use or Function This blight study was prepared for the sole and exclusive use of Farmer Holding Company to assist in determining if the Study Area is blighted and eligible for tax abatement and/or TIF and OD. It is not to be relied upon by any third parties for any purposes, whatsoever; provided, however, this Report may be submitted by Farmer Holding Company or its affiliates or agents to any governmental entity or agency for the purpose of making a recommendation of a finding that the Study Area is blighted or a legislative determination and/or finding that the Study Area is blighted. Appraiser Competency No steps were necessary to meet the competency provisions established under USPAP. Our firm has completed many blight studies in the past several years , and we have adequate experience and qualifications to complete the study. Please refer to the Appraiser Qualifications at the end of our report. Sources of Information Market data was obtained from a number of sources, including but not limited to the following: • The Site-To -Do-Business • The Cole County Assessor's Office • Jefferson City online databases • Cole County online databases • Jefferson City Chamber of Commerce • Jefferson City Economic Development department • The Labor of Bureau Statistics • The U.S. Census Bureau • Loopnet, CoStar, Multiple Usting Service (MLS), and in-house database SHANER APPRAISALS, INC. 4241 5698 .4 Introduction • 2 Capital Mall Blight Study AREA AND NEIGHBORHOOD Area Overview The subject is located in the western portion of Jefferson City, Cole County. Missouri. Jefferson City is the state capital of Missouri and is located approximately midway between Kansas City and St louis. Major highway access in the community is provided by US Highway 50, which runs east/west through the community and US Highway 63 which runs north/south. Accordi ng to the Site to Do Business, Jefferson City had an estimated 2012 population of 43,506 people with a median household income of S46,525. This represents a population increase in Jefferson City of 0.44% annually from 2010 to 2012. In comparison, the Kansas City metro has a median housing income of $51,835 in 2012 and a reported population growth of 0.60% annually since 2010. The following analysis focuses on the social, economic, government, and environmental forces that form the elements of supply and demand and subsequently affect local real estate values. According to Market Analysis for Real Estate, published by the Appraisal Institute. the trade/mar1cet area is delineated by physical, political, and socioeconomic boundaries or by the time-distance relationship represented by travel times to and from common destinations. A mar1cet area is an area in which alternative, similar properties effectively compete with the subject in the minds of probable, potential SHANER APPRAISALS, INC. Area and Neighborhood • 3 Capital Mall Blight Study users . It is further stated that the time-distance relationship to employment and support facilities is the primary determination for retail properties. Therefore, for the purposes of this report, the market area boundaries are considered to be the entire city of Jefferson City. The market area is shown on the following map. Market Area t. ' • , ' •, ~ \ ~ i ~ .. I I • • \ ______.M ~ ·-.. • ~" .. ... \ \ I Land Use Land use in the immediate area of the subject includes mostly commercial and single family residential. The main commercial corridor in the subject's neighborhood is West Truman Blvd . and US Highway SO, which intersect at the southwest comer of the subject property. Significant land use characteristics are summarized in the following table for the immediate area . Predominant Age of Improvements 30 years Predominant Quality and Condition Averaqe Approximate Percent Developed (estimate) >75% with vacant sites being located throughout the area Life Cycle Staqe Second, a period of stability Infrastructure/Planning Average Prevailing Direction of Growth West Immediate Surroundinq Land Use North Commercial South Hiqhway - East Residential --- West Commercial SHANER APPRAISALS, INC. Area and Neighborhood • 4 capital Mall Blight Study Access Regional access to and from the local market area is good due to the presence of US Highways 63 and SO. US Highway SO runs east/west through the area and connects with Interstate 470 and Kansas City to the west and Interstate 44 and St. louis to the east . US Highway 63 runs north/south through the area and connects with Interstate 70 and Columbia, Missouri to the north and Interstate 44 and Rolla, Missouri to the south . Outlook and Conclusions I am cautiously optimistic about both the short and long-term outlooks of the subject market area . Jefferson City is the state capital of Missouri and as such , will continue to have a solid employment base of government jobs. Although that is the case, there is still a risk factor involved that includes the potential cut in government spending, which would have a negative impact. The location along two US Highways is also a positive for the community and the market will remain stable for the foreseeable future with few changes occurring . SHANER APPRAISALS , INC . Area and Neighborhood • 5 Capital Mall Blight Study PROPERTY DATA Site Description Physical Futures SID (11 hrals c..blned) Approximately 78.27 acres, or 3.409.423 square feet Scua: County Records mlon Irregular (see following maps, aerials and site plans) ~ Basically level Adequate at the time of inspection Flood ....... c:omm...lty ....... , 29051C0109E, effective November 2, 2012 Zone X, ·Areas of 0.2% annual chance flood ; areas of 1% annual Flood Zone chance flood with average depths of less than 1 foot or with drainage areas less than 1 square mile; and areas protected by levees from 1%annual chance flood : Flood .......... Nottypically required within Zone X Utlltles Adequate utilities are available and in_Qiace at the site. Our physi ca l inspection of the subject property d id not reveal any EnvlroniMnUI indication of environmental hazard. However, we were not provided with a Phase I report to verify. It is recommended that a competent third party prepare a Phase I to confirm. We were not provided a soil report to review . We assume that the Ground SUblllty soil's load bearing ca pacity is sufficient to support the existing structures. We did not observe any evidence to the contrary during our physical inspection of the property. SHANER APPRAISALS , INC. Property Data • 6 Capital Mall Blight Study StwiER APPRAISALS, INC. Property Data • 7 I r SHANER A PPRAISALS, INC . b l Jefferson CJtv • C·S ·C·2 ·C-3 .c ... • c-o .,...1 .,...2 .,...3 .N-O 1 .AA-2 .IU: .ltD 0 ltS-1 0 ltS-2 IJ ... , ·~ [JMI Capital Mall Blight Study Property Data • 8 capital Mall Blight Study Flood Map PROPER I Y ADDRESS: 3600 Cow*y CU» Dr, Jder80n ~. MO, 65109 North SHANER APPRAisALs, INC . Property Data • 9 Capital Mall Blight Study Site Conclusions The subject site is functional for its legally permissible use of a retail development The site is favorable for its current retail use and has good general access to main transportation routes in Jefferson City and utilities. The use of the property is consistent with the surrounding development. SUIJECT PHoTOS View of exterior of Capital Mall SHANER APPRAISALS, INC . Subject Photos • 10 Capital Mall Blight Study View of exterior of Capital Mall View of exterior of Capital Mall SHANER APPRAISALS, INC. Subject Photos • 11 Capital Mall Blight Study View of exterior of Capital Mall View of exterior of Capital Mall SHANER APPRAISALS , INc . Subject Photos • 12 Capital Mall Blight Study View of exterior of Capital Mall Subject Photos • 13 Capital Mall Blight Study View of interior of Capital Mall SHANER APPRAISALS, INC. Subject Photos • 14 Capital Mall Blight Study View of interior of Capital Mall SHANER APPRAISALS, INC. Subject Photos • 15 Capital Mall Blight Study View of i nterior of Capital Mall SHANER APPRAISALS, INC. Subject Photos • 16 Capital Mall Blight Study View of interior of Capital Mall SHANER APPRAISALS, INC. Subject Photos • 17 capital Mall Blight Study View of interior of Capi tal Mall SHANER APPRAISALS , INC . Subject Photos • 18 Capital Mall Blight Study View of Wendy's outparcel SHANER APPRAISALS , INC . Subject Photos • 19 Capital Mall Blight Study V.ew of Hardee's outparcel SHANER APPRAISALS, INC. Subject Photos • 20 Capital Mall Blight Study I View of vacant land SHANER APPRAISALS, INC. Subject Photos • 21 Capital Mall Blight Study View of vacant land SHANER APPRAISALS, INC. Subject Photos • 22 Capital Mall Blight Study View of vacant land SHANER APPRAISALS, INC. Subject Photos • 23 capital Mall Blight Study BLIGHT ANALYSIS Blight Defined As presented earlier, Section 353 .020 (2) R.S.Mo of Missouri 's Urban Redevelopment Corporations law defines a "blighted area · as follows: • "Blighted area ", that portion of the city within which the legislative authority of such city determines that by reason of age , obsolescence, inadequate or outmoded design or physical deterioration have become economic and social liabilities, and that such conditions are conducive to ill health, transmiss ion of disease, crime or inability to pay reasonable taxes . We also presented the definition of blight from the Missouri Real Property Tax Increment Allocation Redevelopment Act, Section 99.805(1), RSMo which defines a "blighted area· as follows : • an area which, by reason of the predominance of defective or inadequate street layout, unsanitary or unsafe conditions, deterioration of site improvements, improper subdivision or obsolete platting, or the existence of cond itions which endanger life or property by fire and other causes, or any combination of such factors, retards the provision of housing accommodations or constitutes an economic or social liabil ity or a menace to the public health, safety, morals, or welfare in its present condition and use. The above definitions serve as the basis for further discussion concerning whether the proposed Study Area is blighted. Chapter 353--Factors Ill and 2 -Age and Obsolescence The Study Area includes both improved and unimproved sites. For the unimproved sites, since land does not depreciate or age over time similar to improved property, and age is not cons idered to be a sign ificant indication of bl ight for these parcels. There are nine structures on the 14 parcels. Each of these structures was built in a different year and is subject to different amounts of depreciation. The Capital Mall parcel (Parcel 1) contains the majority of the building area in the Study Area at approximately 63% and was built in 1978. In our inspection of th is building, there were a number of areas that had dated improvements. These include the floor tile throughout the common areas and the tile in the restrooms. There are several places in the mall that have tiles that are mismatched in color, possibly due to the lack of similar tile to repair areas of the floor. Photos of these items can be seen on the following pages. The Merriam-Webster Dictionary defines "obsolescence· as "the process of becoming obsolete or the condition of being nearly obsolete " and "obsolete" as "of a kind or style no longer current: old - fashioned ." In a reta il shopping center sim ilar to the subject, keeping the common areas updated appeals to both the shoppers and the tenants. Shoppers generally have more desire to be at a center that appears "newer" and that has more up-to-date amenities. By making the subject mall more aesthetically pleasing to these shoppers, traffic to the mall should increase and may increase the occupancy with tenants that would appeal to these shoppers. Tired and outdated malls have difficulty attracting tenants that will draw shoppers to the mall. SHANER APPRAISALS, INC. Blight Analysis • 24 Capital Mall Blight Study An article was reviewed that addresses this matter specifically. It was written by John Simpson, MAl who has authored all or parts of four Appraisal Institute books and 11 Appraisal Journal articles, and he has over 20 years of commercial appraisal experience. In his online appraisal blog ·Appraisal Matters·. he wrote about older regional malls. In it, he stated that these properties "face a quandary: He goes on to note "they need to be renovated to keep competitive with newer regional malls, yet this is a very expensive proposition that rarely is financially feasible: Additionally, the article states "Older regional malls that have not been modernized to current levels have great difficulties attracting the high credit anchors they want: Mr. Simpson states "typically renovations that have occurred over the prior five to ten years are cosmetic and do little to increase foot traffic: Mr. Simpson finishes his article with the following conclusion: So older regional malls have lower sales per square foot and higher common area maintenance costs. Frequently traffic volume and traffic patterns reduce the radius it can draw from. So even if the mall is renovated , it is extremely difficult to recoup the cost, hence what we see are partial renovations that focus on cosmetics. The problem is that prospective retail tenants recognize the dynamics and even with a face lift, they are very hesitant to commit. Their response is "show me higher average sales volumes", which is a Catch 22 with only cosmetic renovations. Even if sales volumes increase, the higher costs associated with the mall result in a lower negotiated rent So again, mall owners are faced with a difficulty in justifying the costs of a full renovation. That's why they need one or more new anchors, yet the particular location matrix of an anchor will generally preclude a regional mall perceived as a "local s" mall. Based on our inspection of the subject property along with the data that has been obtained from the article noted above, it appears that the age of the subject property contributes to the indication of blight for the Study Area . SHANER APPRAISALS, INC . Blight Analysis • 25 Capital Mall Blight Study SHANER APPRAISALS , INC . Blight Analys is • 26 Capital Mall Blight Study SHANER APPRAisALs , INC. Blight Analysis • 27 capital Mall Blight Study Chapter 353 Factor • 3 -Inadequate or Outmoded Design The majority of the Study Area is improved with a regional shopping center. In general, current views are that the designs of regional shoppi ng centers are considered both inadequate and outmoded. The layout of an older mall property like the subject is considered a problem to some investors as the buildings have long wings that connect to the various anchors. This is a concern because each wing in a shopping center typically requires an HVAC system which can help to eliminate economies of scale, increase repair and replacement costs, and reduce the energy efficiency of the facility. A layout of the subject's facility that shows the various wings at the subject shopping center can be seen later in this section. As shown by the pictures on page 31, the entrance wings have little to no physical or visual activity rendering the design to be out-of-style and inadequate by today's standards. The main entrance to the subject site from Truman Boulevard enters with a view of the service and loading area of the Sears tenant and not to one of the main entrances to the shopping center, which can be found primarily on the south side of the subject building near the food court. By today's standards service areas are shielded from public view. The two entrances nearest to Truman Boulevard are, for the most part, void of any significant leasable space rendering the design to be inadequate and outmoded. CoStar published a three part series in October 2012 titled "The De-Mailing of America: What's Next for Hundreds of Outmoded Malls?" In this article, it notes that RIDs like Simon Property Group and General Growth Properties (the prior owner of the subject property), which are the nation's largest mall operators, are divesting lesser-performing properties. Investors have been purchasing these properties at these low prices and believe that they can reposition these malls or raze them to gain land for apartments or other uses. The article goes on to note that that the issues that face distressed malls and large shopping centers ranges from changing neighborhoods, increased competition from online retailers, the appeal of newer lifestyle and power centers, consolidation of anchor stores, and sharp downsizing by in-line tenants. In a report from Green Street Advisors, it was forecast that 10% of the nation's 1,000 enclosed malls will fail by 2022 and will eventually be converted to uses other than retail . Chapter 353 Factor • 4 -Physical Deterioration We have been provided a report completed by Jamie Reed , General Manager for the subject property. This report shows that there are a number of items of physical deterioration and potential safety issues within the subject property. The description of these items from this report are included below with the full report being included in the addendum of this report. Blight Analysis • 28 Capital Mall Blight Study I . F.cades--Tbe ~ of the mall property is in poor condition in aew.ral plaocs.. See enclosed pidwe I for an example oftypK:al fw;:ade conditions. 2. Roof-Tbc roof is in poor condition in several places. 'J'hae are a subsUntial number o f active roof leab and sips of a hiltory of roof leaks in 14 of 30 of Chc teunt aas observed. In additiaa, substantial repairs will be needed to the roof~ Sec mcloscd pictures 2 to I 1 for evideoce of the roof condition and leab ~und. 3. HVAC-Thc HVAC system is in poor condition. It has bcc:n recoauncnded tbll 11 HV AC units be lq)lac.ed in the short tam due to their substantial dcfaiontioft. qc and obdc::a:cocc. 4. Steel Service Doon---()oe..half of the steel service doors are Nlkd and ddaionlcd aloog lbc door jambs.. See enclosed picture 12 for an illustration of lbc typical rusted steel door. S. Plimcd F~ tawJt e®ies are in need of immc:diacc painting. 6. EJFS--Oamage was observed to the underlying EIFS (~) at ~ of the tenant eoeries, most notably .. vacant spaces at the IOUtbcrn cod of the buikfins. See cndoled piduR:s 13 to 16. See also picture 17 for typical dried and a'lldted ooatrol joint tcalant found on the lhrouabout the ~ 7. Suspcd Mold-Vasual signs of suspect mold have been idcatific:d two ICUDliR:M. See adosed picture 8 md I I . This is a safety and health issue, in lddition to a deterioration issue. 8. Paw:menl-A. you already noted the parking lot payment is highly deterioraled and in need of rqUcanent. See endoscd pic:tura 18, 19 and 20 for rcccndy taken of the .,.tin& pavanent conditions. 9. Cwbs-Tbe curbs are deteriorating in sewn) placa throughout the property. See enclosed picture 21 of a damaged curb on the property that was typically oMcrved . 10. Trip Haz:.d-At west side: of JC Penney a trip hazard was identified. See c:nc:loscd pidlae22. I I . Service Enary Lights-There arc sevc:raJ ~ at lights over ICI'Vicc enuy doors. See cocloscd picture 23 for typi<:aJ missing lights over savice artry doors. This is a safety issue • much as a dctcriont.ioo issue . 12. W"mdows-Replacanc::nt needed at small ..char teoant at sooth end of building. Sec codoscd picture 24. In additi on to these items, the reader is referred to the discussion of physical deterioration on page 33 under ·oeterioration of Site Improvements.· Chapter 99 Factor • 1 -Defective and Inadequate Street Layout Conditions associated wi1h defective or inadequate street layout include poor vehicular access and/or internal circulation; substandard driveway definition and parking layout (e.g . lack of curb cuts, awkward entrance and exit poi nts}; offset or irregular intersections; and substandard or nonexistent pedestrian circulation and lack of signage. The lack of signage can create uncertainty and a potential for accidents for drivers who are unfamiliar with the area . SHANER APPRAisALs, INC. Blight Analysis • 29 Capital Mall Blight Study One of the conditions that was common throughout the Study Area. was that of non-existent pedestrian circulation. The only sidewalks found within the Study Area. were located around the perimeter of the bu ildings. and no sidewalks linked the redevelopment area with adjoining a.rea.s. None of the streets in the Study Area. have sidewalks. Additionally, there are no sidewalks along West Truman Road or along Country Club Drive. The lade of sidewalks creates a. dangerous environment for pedestrians within the Study Area. Creating pedestrian linkages with major activity hubs such a.s the Capital Mall is often a planning priority of most communities. Chapter 99 Factor I 2 -UnsaniUry or Unsafe Conditions There are widespread locations within the Study Area exh ibiting unsafe or unsanitary conditions. The most prevalent Study Area. conditions considered unsafe or insanitary include numerous potholes throughout the parking areas, poor drainage throughout the parking areas, the existence of cracked or uneven sidewalks, poor drainage, life safety issues and outdated building systems. The numerous potholes throughout the area lead to unsafe conditions to vehicular traffic and especially to pedestrian access to and from the parking areas. Chapter 99 Factor I 3 -Improper Subdivision or Obsolete Platting There are specific conditions that can be used to determine the existence of improper subdivision or obsolete platting. Among these conditions are irregular or faulty lot shape and/or layout. inadequate lot size, poor access, as well as conformity of use. Field study and review of public records suggest these conditions present throughout and are predominate within the Study Area . lot layout is deemed to be faulty if the configuration relative to the street is contrary to what is desired for development. lot shape is considered faulty if the shape is unusual to an extent that it deters or constrains development options. The Study Area consists of 14 parcels that are irregularly configured , making it difficult to undertake a coordinated approach to redevelopment of the property so as to bring it up to modem development standards. Each of the department stores together with its ancillary parking has been separately platted, result ing in the plats having highly irregular shapes. Such platting results in the creation of a number of legal and financial obstacles to development. The GIS map on page 7 of this Report illustrates improper subd ivision or obsolete platting in the Study Area. Of the 3,409,423 square feet contained in the Study Area, 100% of the property in the Study Area reflects this condition. The Study Area predominantly suffers from improper subdivision and obsolete platting. There are several additional evidenti ary factors that support this. The first is that the main entrance to the subject site from Truman Boulevard enters with a view of the service and loading area of the Sears tenant and not to one of the mai n entrances to the shopping center, which can be found primarily on the south side of the subject buildi ng near the food court. The two entrances nearest to Truman Boulevard are, for the most part, void of any sign ificant leasable space. A photo of the two entrance wings is below. In addition, although it is not owned by the same entity as the mall , Dillard's has poor visi bility and access from both Country Club Drive and Truman Boulevard. This can be seen on the site plan that follows in this section . SHANER APPRAISALS , INC. Blight Analysis • 30 Capital Mall Blight Study A second factor that evidences improper subdivision of the overall Study Area is that the shopping center and subject land is not built out 100%, even though the center was constructed nearly 35 years ago. There is one pad site (Parcel 4) that is 1.51 acres and has frontage along Country Club Drive. This pad site SHANER APPRAISALS, INc. Blight Analysis • 31 Capital Mall Blight Study remains vacant. There are also three parcels (Parcels 2, 6 and 11) that are considered ·butters· from the residential development that exists to the east. Although this buffer is required by zoning, it consists of slightly over 20% of the total site area in the Study Area , which is considered to be excessive. Within the Study Area, the platting is also considered to be inefficient and obsolete by today's standards as JC Penney and Dillard's have been separately platted. The division of space has resulted in the plats having very irregular shapes. These anchors (JC Penney and Dillard's) are owned by a different entity than the remainder of the shopping center. This presents major problems relating to the development of a plan for any redevelopment or adaptive reuse of the property as well as legal and financial hurdles to development. The shopping center and site plans that were referenced earlier in this section can be seen below and on the following page. Page 7 of this report shows the layout of the various parcels and their irregular shape and location on the site. i 1 Ill il .. oa I j~ :s~ .. '= SHANER APPRAISALS, INC. Blight Analysis • 32 I ' I ,- 1 rr..,_b.- '/z I '{ t • • Ca pital Mall Blight Study .... -·-- All of these components indicate that the subject property suffers from an inadequate and outmoded design as well as improper subdivision and obsolete platting, and these are cons idered to be an indication of blight. The fa ct that one pad site remains vacant evidences the limited demand in the area and results in an economic liability to the city. In addition, the parcels that are currently used as buffers between the shopping center and the residential development to the east are useful for their current purpose, but in this capacity do not generate significant taxes for the city. Chapter 99 Factor I 4 -Deterioration of Site Improvements At the Study Area, there are a number of items of physical deterioration that are present, however, it does not appear that any of these items are significant. They include damaged parking areas and damaged interior tiles. On the interior of the mall, the building itself is dated with several places in the buildi ng that have floor tiles that are mismatched as well as some evidence of damaged floor t iles. There was nothing specific that was identified as major deterioration, such as evidence of foundation damage, HVAC obsolescence, roof leaks, or improper drainage around the mall's exterior, however as noted previously, there was an overall dated appearance to the facility. One issue with the Study Area is the i nterior of the shopping center and the damaged floor tile. It does not appear that there is any rema i ning match ing tile for the majority of the build ing. As noted previously, areas of the common floor have been replaced with lighter color tiles. Because of this, it is possible that the cost to update the flooring throughout the building's common areas would be a detriment to developers from a cost -benefit standpoint. SHANER APPRAisALs, INC . Blight A nalysis • 33 Capital Mall Blight Study My inspection also found that the parking lot was nearing the end of its useful life and is in need of resealing and restriping, and repair of potholes. Several curbs are deteriorating and need repairs throughout the area as well. The following pictures show a sample of the damaged tile as well as the damage in the parking area. SHANER APPRAISALS, INC. Blight Analysis • 34 Capital Mall Blight Study SHANER APPRAISALS, INC . Blight Analysis • 35 Capital Mall Blight Study SHANER APPIWSALS, INC. Blight Analysis • 36 Capital Mall Blight Study Therefore, given the reasons outlined above, physical deterioration is considered to be an indication of blight. Chapter 99 Factor II 5 -Conditions which Endanger Life or Property by Fired and Other Causes According to the property condition report received from Jamie Reed , the fire sprinkler system has not been tested since October 2009. These systems are supposed to be tested on an annual basis. Because of the lack of fire system testing stated in the property condition report, there is an potential that the tire system may not operate correctly in the event of a tire. This can be considered a condition that would endanger life and property by tire. 81..16HT STUDY CoNcLUSIONS The following factors of the blight definition are present in the proposed Study Area . --JSJ Bllaht Factors Yes No Aqe X Obsolescence X Inadequate or Outmoded Design X Physical Deterioration X The foregoing analysis demonstrates that four out of the four Chapter 353 blighting factors are present throughout the Study Area. In accordance with Missouri's Urban Redevelopment Corporations Law definition of Blight Section 353.020(2). RSMo., the Study Area is blighted if the governing body of the city determines that by reason of age, obsolescence, inadequate or outmoded design or physical deterioration the area have become economic and social liabilities, and that such conditions are conducive to ill health, transmission of disease, crime or inability to pay reasonable taxes. Because of the four present blighting factors above, the Study Area has become both an economic and social liability and these conditions are conducive to the inability to pay reasonable taxes as defined in Secti on 353.020(2), RSMo. See below for a full evaluation of economic liability, social liability and the inability to pay reasonable taxes . -... 99 Blight Factors Yes No Defective or Inadequate Street La_yout X Unsanitary or Unsafe Conditions X Improper Subdivision or Obsolete Platting X Deterioration of Site Improvements X Conditions which Endanger life or Property by Fire and Other Causes X The foregoing analysis demonstrates that five out of the five Chapter 99 blighting factors are present in the Study Area and the combination of these conditions are predominant in the Study Area . Under the Missouri Real Property Tax Increment Allocation Redevelopment Act, Section 99.805(1), RSMo. the Study Area is a blighted area if by reason of the predominance of defective or inadequate street layout, unsanitary or unsafe conditions, deterioration of site improvements, improper subdivision or obsolete platting, or the existence of conditions which endanger life or property by tire and other causes, or any combination of such factors, retards the provision of housing accommodations or constitutes an SHANER APPRAISALS, INC. Blight Study Conclusions • 37 Capital Mall Blight Study economic or social liability or a menace to the public health, safety, morals, or welfare in its present condition and use. By reason of the predominance of the five present blighting factors above, the Study Area, in its present condition and use, constitutes both an economic as defined in Section 99.805(1), RSMo . See below for a full evaluation of both economic liability and social liability. Inability to Pay Reasonable Taxes A specific definition that clearly defines "the inability to pay reasonable taxes· was not found in the Missouri Statues. In the real estate field, the inability to pay reasonable taxes can simply be that that property value as it currently sits is less that the potential value of the property as renovated or rehabbed. There is substantial evidence that the property is unable to pay reasonable taxes which result directly from the age, obsolescence, inadequate and outmoded design and physical deterioration of the property. The subject property was recently purchased in December 2012 for a sales price of Sll,OOO ,OOO . In the course of that purchase, an appraisal was completed by Cushman and Wakefield . The appraisers that signed this report were Thomas S. Helm. MAJ. MRICS, who is a Senior Director and Richard Latella, MAl, FRICS. who is the Executive Managing Director and Americas Practice Leader for the company. The value conclusions from this report can be seen in the chart below. Value ConclusiOns ·----~-' . . ' , ... 1:!:. . .-: -~ =-~""~!-~~~·~ • I 0 •-r ' T"'! ,---.: J • ., .,., ,.,., 1/1/2015 $12.900.000 In this report, it was noted that the ·as is" value of the property, which accounts for the tenants that were i n place as of their inspection date of December 5, 2012, was S11,200,000. They also provided an ·as stabilized " value as of January 1, 2015 of $12,900,000. The value differences between the ·as is" and "as stabilized " values is due to the fact that the appraisers felt that the subject was not at a stabilized occupancy. It was estimated that approximately 10,842 square feet would require lease -up to long term tenants, and that 12,229 square feet would be occupied by temporary tenants. Th is would bring the subject's occupancy up to a typical market level for a regional shopping mall. Because the subject property is not considered to be currently stabilized, its fair market value, which is what the assessors in Missouri base their values, is below that of a stabilized shopping center. Given this fact, the subject property is not paying reasonable taxes. We have also been provided the historical operating statements from the property owner for 2009, 2010, 2011, their 2012 budget. and where they are as of January 1, 2013. This can be seen below. SHANER APPRAISALS, INC. Blight Study Conclusions • 38 Capital Mall Blight Study INCOME 1/1/2013 ContrKtual Minimum Rents $2,576,309 $2,230,042 $2,154,764 $2,135,350 $1,756,616 lu5e Tennination Income $50,000 so $27,110 so so Reimbursement Income $1,072,185 $870,690 $769,591 $697,179 $432,050 Marlcetinc/Promotion $55,091 $25,714 $13,433 $14,396 so Other Tenant Reimbursement $15,173 $12,098 $9,812 $3,571 $392,456 Over-.,e Rent $145,812 $117,037 $190,432 $195,613 $449,948 Other Income $97,741 ~ ~ S69.3n $69.317 TOTAL INCOME $4,012,311 $3,363,956 $3,235,348 $3,116,086 $3,100,447 DP!NSIS Martcetins $55,091 $49,182 $46,558 $55,968 $55,450 Operations $257,965 $247,988 $UI6,739 $212,154 $205,400 Utilities $343,469 $401,232 $449,375 $506,722 $50l,SOO Oeanirc $241,322 $268,791 $311,351 $286,908 $285,650 Landscapirc $17,791 $17,352 $12,285 $11,900 $11,900 Security $159,629 $160,362 $164,712 $164,103 $163,900 Other $187,290 $176,179 $180,672 $166,292 $168,880 Manasement Fee $58,828 $68,949 so so so Real Estate Taxes $288,.603 $284,212 $203,225 $195,055 $182,715 Insurance ~ ~ .lli..lli ill.§§Q ill.§§Q TOTAl EXPfNSU $1,657,496 $1,713,301 $1,581,431 $1,626,762 $1,603,055 NET Ol'fRATING INCOMf $2,354,815 $1,650,655 $1,653,917 $1,489,324 $1,497,392 As can be seen in this chart, the net operating income for the subject property dropped nearly 30% between 2009 and 2011, which is the last year that actual numbers were provided. If the in place estimate of net operating income as of January 1, 2013 were considered, the net operating income would have declined by over 35% from 2009. Through the three years of actual income and expenses that we have, the expenses at the subject property have remained fairly stable. The total income of the property has declined from $4,012,311 in 2009 to the current in place total income of $3,100,447, a decline of nearly $900,000 . Based on the historical figures, this appears to be due to the decline in the contract minimum rents. Regional shopping centers like the subject are almost always purchased for their income generating potential. If the net income that would be available to the property owner has declined by approximately 35%, that would have an effect on the market value of the subject property. Given that the county assessor is to value the subject property for taxation purposes at its fair market value, assuming the mill levy remained constant, it is logical to assume that the taxes that would be paid on the property would decrease, which would support the blighting factor of inability to pay reasonable taxes. In addition to the information above, the 14 parcel s that make up the Study Area are currently assessed and taxed as various county parcels . A summary of the parcels involved and their current tax amounts follows. SHANER APPRAISALS, INC . Blight Study Conclusions • 39 Capital Mall Blight Study ---· . hral 2001 2001 .. 2011 2012 1 $284 ,188.32 $274,156.42 $269,985.04 $169,647.15 $169,508.72 2 $2,318.3 2 $2,236.48 $2,202.45 $2,202.65 $2,000.85 3 $18,013.68 $17,377.80 $17,11339 $17,114.93 $17 ,100.96 4 $8 ,551.76 $8,249.89 S8,1243 6 $6,965.32 $6,959.63 5 $7 ,665.43 $7 ,394.84 $7,282.32 $7,997.72 $7,991.19 6 $18.58 $17.93 $17.66 Sl7.65 $17 .64 7 $4,112.49 $3,967.33 $3,906.96 $3,907.32 $3,904.13 8 $174,800.20 $168,629.71 $166,063.96 $113,598.12 $113,505.42 9 $8,828.65 $9,101.03 $8,962.56 $10,173.89 $10,165 .58 10 $21,470.27 $20,712.36 $20,397.21 $20,399.06 $20,382.42 11 $4,086.37 $3,942.12 $3,882.13 $3,882.49 $3,879.32 12 $53,865.76 $51.964.28 $51,173.64 S49,785.78 $49,745.15 13 $15,385.42 $14,842.31 $14,616.48 $11,394 .89 $11,385.59 14 $63,617.32 $61,371.62 $60,437.84 S49,094.20 $49,054.14 Teal $666,922.57 $64J,IM.12 $04,111.00 $411.UL17 $465,100.74 ....... . . -'. :.t:_ t.:!::-'.f .t'· -·-.. Allutment County c.-a, c:...tT-c:un.tT ... hral Appr-... ...... a.T._ ~flf2001 ..... ~ v.-v-. (2012) TuAmount 1 32% $9,613,000 $3,076,160 $169,508.72 $284,188.32 59.65% 2 32 % $1 24,800 $39,940 $2,200.85 $2,318.32 94.93 % 3 32% $969,800 $310,340 Sl7,100.96 $18,013.68 94.93 % 4 32% $394.700 $126,300 $6,959.63 $8,551.76 81 .38% 5 32% $453,200 $145,020 $7,991.19 $7,665.43 104.25 % 6 32% $1,000 $320 $17 .64 $18 .58 94.94 % 7 32% $221.400 $70,850 $3,904.13 S4 ,112.49 94 .93 % 8 32% $6,437,000 $2,059,840 $113,505.42 $174,800.20 64.93 % 9 32% $576,500 $184,480 $10,165.58 $8,828.65 115.14% 10 32% $1,155,900 $369,890 $20,382.42 $21,470.27 94.93% 11 32% $2 20,000 $70.400 $3,879.32 $4,086.37 94 .93 % 1 2 3 2% $902,750 $288,880 S49,745.15 $53,865.76 92.35 % 13 32% $206,620 $66,118 $11,385.59 $15,385.42 74.00% 14 32% $890,210 $284,867 $49,054.14 $63,617.32 77 .11% Tot* $22.166.-S7,01J,405 s.s,a.74 $616,122.57 "-"" The subject property has been operated fo r a number of yea rs and has been generating taxes. However, the taxes generated by the county have been fa lli ng as the property ages, income drops, and vacancies increase. The appraised value by the county for the properties within the Study Area is $22,166,880 and results in taxes of S465,800.74 for the 2012 tax year. We have researched the historical tax amounts of the properties within the Study Area . In general, the records available go back fiVe years. The total taxes generated by the parcels in the Study Area in 2008 was $666,922.57 . This compares to a total tax generated in 2012 for those parcels of S465 ,800.74. This SHANER APPRAISALS, INC. Blight Study Conclusions • 40 Capital Mall Blight Study suggests that the real estate taxes generated by the properties is now only roughly 69.84% of that generated in 2008. This has resulted in a significant loss in property taxes for Jefferson City. The tax revenues generated at the subject are lower than they were in 2008 as a result of the decline in the subject mall's revenues, along w ith the decline in mall properties around the country referenced earlier in this report The continued deterioration of the subject property both physically with the near tenn deferred maintenance and economically with the potential continued decline in revenues will conti nue to see the taxes generated from this property decrease. One common way to view the potential future for a shopping center is to look at the mall sales per square foot. Gerard V. Mason, executive managing director of Savills US, stated that high qual ity malls should take in $400 per square foot, wh i le decent B-class malls should yield about $350 a square foot Anytime that a mall's sales fall below $300 per square foot, i t is l ikely in very serious trouble. According to the historical sales data that has been provided, the total tenant sales per square foot are $161.88. A healthy mall anchor store should have at lea st $200 per square foot and any reta iler that is below $100 per square foot is probably in danger of closing . Based on the infonnation that we have been provided , several retailers fit this test and add to a fear of closi ng. Another critical factor is a store's health ratio, which is also known as occupancy cost, and is calcu lated by d ividing the annual rent by total sales for the yea r. Healthy mall store ratios average about 11% to 12%. Any ratio above 15% will likely land a store on a watch list and if it is above 20% the store is probably destined to go dark. Based on the marketing packet, there were ten retailers that had health ratios that were above 13%. These are shown below: ~~·':'"",-:~::. Wilson 's Tota l Fitness 20.61% Clai re's 15.40% CJ Banks 14.n % Modem Na ils 48.22% Stir Fry_ 33.15% Christopher and Banks 28.71% DEB 13.10% Hallmark 13.29% Pretzel maker 33.89% Mastercuts 16.81% Given the low sales per square foot and the large number of tenants that have a health ratio above 13%, there is a possibility that there may be store clos ings in the subject center if the sales throughout the mall do not increase. Renovation of the property would likely result in a higher value due to an i ncrease in traffic and renewed interest by retailers to locate i n the mall, and would therefore generate a higher tax base. Renovation of the property would also result in increased employment, personal property, utility, and sales taxes. In my opinion, the blighted elements noted previously have resulted in the inability of the affected properties to pay their reasonable share of taxes. Economic Liability The city and other taxi ng districts are highly dependent on real property taxes, personal property taxe s, uti lity taxes and sales taxes generated in its commercial areas. As discussed in detai l above the Study SHANER APPRAISALS, INC. Blight Study Conclusions • 41 Capital Mall Blight Study Area in generating substantially less in real property taxes in the last several years and its real property tax generation continues to decline. The real property tax generation of the Study Area has decreased to 69.84% of the total that was seen in 2008. Without redevelopment it is expected that the real property tax generation will continue to decline. Although there is no detailed study of sales tax revenues for the Study Area rent revenues which are tied directly to sales in retail centers has substantially declined leading to the inevitable conclusion that sales tax revenues from the Study Area have also substantially declined and the evidence leads to the conclusion that these revenues will continue to decline without redevelopment. Clearly the Study Area is not generating the amount of tax revenues to its potential and thus results in an economic liability. The decline of the tax revenues is a result of reason of age, obsolescence, inadequate and outmoded design and physical deterioration of the Study Area and thus by reason of these factors the Study Area is an economic liability. The decline of the tax revenues is also results from the predominance of the combination of defective and inadequate street layout, unsafe conditions, deterioration of site improvements, improper subdivision and obsolete platting, and thus by reason of these factors the Study Area in an economic liability in its present condition and use. The Study Area consists of an underutilized property and has not been subject to acceptable growth and development through private enterprise. The existence of the blighting factors present inadequate or outmoded design and physical deterioration, when taken as a whole, clearly indicates that the Study Area constitutes an economic liability in its present condition and use. Because of this and the other blighting factors, it is unlikely that the Study Area will be redeveloped without assistance. This concept of an economic liability or the economic underutilization of a property as a basis for blight has been upheld by the Missouri Supreme Court. The Court has determined that "the concept of urban redevelopment has gone far beyond 'slum clearance' and the concept of economic underutilization is a valid one.· Blight exists to the extent an area is operating less than its potential. The community is harmed by the foregone tangible and intangible benefits resulting from underperformance. The following are reference to the Missouri Supreme Court Cases. • parking Systems. Inc. v. Kansas City Downtown Redevelopment Corooration, 518 S.W.2d 11, 15 (Mo.1974). The courts determined thot it is not necessary for on area to be what commonly would be considered a "slum · in order to be blighted. • Crestwood Commons Redevelopment Corporation y. 66 Driye-In. Inc .. 812 S.W. 2d 903, 910 (MO. App. E.D.1991). The courts determined that on otherwise viable use of o property may be considered blighted if it is on economic underutilizotion of the property. • State ex. Rei Atkinson v. Planned Industrial Expansion Authority, 517 S.W.2d 36 at 46 (Mo. bane 1975). The courts determined that blight may also be found if the redevelopment of on area Hcould promote a higher level of economic activity, increased employment, and greater services to the public.· SHANER APPRAISALS, INC. Blight Study Conclusions • 42 capital Mall Blight Study Social Uability To our knowledge the tenn soc ial liability has not been defined in Missouri 's statutes or in Missouri cases. The following is the ordinary meaning of the term "social" as found in the dictionary: • "Of, relating to, or concerned with the welfare of human beings as members of society" and "of or relating to the interaction of the individual and the group: liability is defined as: • "Something that works as a disadvantage. • Based on the two definitions, "social liability" can be anything that works to the disadvantage of the welfare of members of a given community or of interaction among such members. The welfare of the community is substantially based on job opportunities and adequate amenities such as shopping and community services provided by various taxing jurisdictions from its tax revenue sources. As vacancies increase and sales decrease the Study Area is less able to provide job opportunities for members of the community as would be expected from commercial areas of this nature. likewise, a reduct ion in tax revenues reduces the ability of taxing districts to provide educational and other community serv ices to its community members. Taken together these factors lead to the conclusion that the Study Area by reason of the blighting factors constitutes a social liability in its present condition and use. As discussed in this report, the Study Area is affected by age and obsolescence, inadequate or outmoded design , and improper subdivision and platting, among the several other blighting factors reviewed in this Report . Age and obsolescence can be seen with the overall dated appearance of the subject property. Based on data presented earlier, a regional shopping center is typical considered to be an outmoded design. The majority of shopping centers that have been built recently have been open -air centers. This benefits the landlord because people enjoy these shopping districts and it also lowers the util ity and repair cost as there is no common area to heat and cool. Based on the data and information contained in this report, I have determined that as of December 9, 2012, the Study Area constitutes both a "social liability" and an "economic liability" and meets the definition of a "blighted area· according to the definition provided in Missouri 's Urban Redevelopment Corporations law (Section 353.020 (2) R.S . Mo.) as well as Section 99. 805(1) of the Real Property Tax Increment Redevelopment Act Further I have determined from my examination of each individual parcel of the Study Area that more than SO% of the Study Area is a blighted area pursuant to Sections 353 .020(2) and 99.805(1), RSMo and consequently, a preponderance of the Study Area, as a whole is a blighted area under Sections 353 .020(2) and 99.805(1), RSMo. SHANER APPRAISALS, INC. Blight Study Conclusions • 43 ADDENDA • Appraiser Qualifica ti o n s • Ar ea Demographics • Glossary • Additio nal I n fo rma ci o n SHANER APPRAISALS, INC . I I APPRAISER QUALIFICATIONS I SHANER APPRAISALS, INC . Qualifications of Jason Roos, MAl Director -Industrial Valuation Valbridge Property Advisors I Shaner Appraisals, Inc. Independent Valuations for a Variable World State Certifications State of Kansas State of Missouri State of Iowa State of Nebraska State of North Dakota Education BBA University of North Dakota Contad Details 913 -451-1451 (o) 913-647 -4095 (d) Valbridge Property Advisors I Shaner Appraisals, Inc. 10990 Quivira Road Suite 100 Overland Park , KS 66210 www.valbridge.com jroos@valbridge.com Membership/Affiliations: Member. Treasurer. Appraisal Institute -MAl Designation Appraisal Institute -Kansas City Chapter Appraisal Institute & Related Courses: Business Practices & Ethics Uniform Standards of Appraisal Practice Advanced Income Capitalization Advanced Sales Comparison & Cost Approaches Report Writing and Valuation Analysis Advanced Applications A Debate on the Allocation of Hotel Total Assets Fundamentals of Separating Real Property, Personal Property, and Intangible Business Assets Appraising the Appraisal: Appraisal Review-General Analyzing Tenant Credit Risk and Commercial lease Analysis Condemnation Appraising: Principles and Applications Experience: Director-Industrial Valuation Valbridge Property Advisors I Shaner Appraisals, Inc. (2007 -Present) Appraisal/valuation and consulting assignments include: industrial buildings, office buildings, retail buildings, and hotels and motels. Industrial properties appraised include a wide variety of warehouse and manufacturing facilities located across the Midwest. Assignments have been concentrated in the Kansas City Metropolitan area , but assignments have been completed across the country on specialized manufacturing and warehouse properties. COMPANY PROFILE SHANER APPRAISALS, INC. 10990 Quivira, Suite 100 Ove rland Park, Kan sas 662 10 Ph one (913) 451 -145 1 I Fa x (913) 529-4121 www .s hanerapprai sa ls.com Shaner App rai sa ls, Inc. is a full-se rv ice rea l es tat e va luati o n and consulti ng firm located in Overl and Park, Kansas. Fo und ed i n 1978, Shaner A ppra i sa ls has established a so lid reputation fo r p ro fess io nal rea l estate serv ices. Th e fi rm em p loys eightee n full-time app raise rs, incl uding five M A l and o ne SRA des ignated m embe r o f th e Appraisa l In stitute. O ur profess io nals represent over 100 yea rs o f va luatio n and related experience, an d three past pres idents of th e Kan sas Ci ty Chap ter o f the Ap praisa l Institute. Th e firm 's primary mark et is Kansas and Misso uri , but Shaner Ap praisa ls has also completed ass ign me nts thro ugho ut the U nited States. Th e firm prov id es M ark et Stu d ies, Feas i bi lity An alyses, litiga ti on Support and Va luati on Services for all types of prope rt y fro m m ulti-fa mily res idences to shoppin g ce nters, o ffi ce build in gs and indu stri al co m p lexes. Shaner Appra isa ls also has ex tensive expe ri ence in eminent d omai n matt ers an d i n va luing specia l p u rpose p rope rti es such as nursin g ho mes , undergrou nd sto rage faci l ities, microwave towers, and rock qu <~rri es. A l l assignments are com p leted o r reviewed by an MAl d es ignated a ppr<~i se r . LI ST OF SERVI CES Comm erci<~l p rope rty app raisa ls Res identia l property appraisa ls Emin ent d o mai n app raisa ls Expe rt w it ness testimo ny Prope rty tax appea ls M arke t st udies Feas i bility stud i es Liti ga t ion su pport Due d i l igen ce resea rc h A ppraisa l rev iew Parti al interest va luat ion Co nserva tion ease men t va lu ati o n Rent studies VALUATION I CO U NSELING PU RPO SES Fin anc in g Ad va lo rem tax disput es Tru sts and est <~tes Co nd emnatio n Inves tm ent <~na l ysis A rbitratio n Po rtfo l io va l ua tio n Co llateral <~ssess m e nt Ri ght o f way acquisitio n Fin ancial st ruct uring Bli ght stu d ies Gene ral rea l estate counse ling PROPER TY TYPES APPRAISED Office bui ld ings-si ngle/multi-tenant, standard o ffi ce, m ed ica l office, surgery ce nters Retai l ce nters -single/m ulti-tena nt, neighborhood , community, reg ional shoppin g ce nte rs In d ustr ial buildings-fl ex, R&D, d ist ribut io n , m a nuf<~ct uri n g, und ergro und , se lf-s to rage Land -A ll types M ulti-fam il y apa rt ment com p l exes, LIHTC, H UD N ursi ng ho mes Ho tels, mot el s, exte nded st<~y fac ilities Single f<~mi l y ho m es, cond o miniums, dup lexes Chu rc hes Easeme nt corrid o rs PAR TIAL CLIENT LI ST Gove rnm en t Age ncies/Muni ci paliti es Un ifi ed Govern ment of Wyandotte County/ Ka nsils Cit y, Kansas Ci ty of Ga rdner City o f Overl and Park Ci ty of Leawood Ci ty of Lee's Sum mit Ci ty of Lenexa Ci ty of Independen ce Ci ty of O lath e City of Shawnee City of W ichita Ci ty of St. Josep h Dept. of H ou sing & Urban Developm en t (H UD) Eudoril Sc hool D i strict O lathe Sc h ool Dis trict DeSoto School Dist rict Blue V alley Sc h ool D i stri c t Gardner Sc hool D ist rict Shawnee M iss i o n Sc hool District Jo hnso n County Ai rport Commis sion Johnso n County Appraise r's Office Johnso n Coun ty Board of Cou nty Comm ission ers Johnso n County Park s an d Recreati on Dept. Jo hnso n County Was tewater D i stri c t Ka n sas Dep art ment o f Tra nspo rt at i o n Ka nsas Highway Patro l U .S. Dep artm ent of Ju sti ce U.S . Pos tal Serv ice GSA l endin g In stitut ion s Ban k O ne Bank Midwest, N.A. Bank o f A m eri cil Ban k of Blue Va lley Bl ue Rid ge Ba nk & Tru st Be rks hire Mortgage Fi nancial Bridge r Commerc i al Fundin g Ca p itol Federal Sav ings Centra l Ban k of Kansas G randbri d ge Rea l Esta te Cap i tal G rea t Southe rn Bank H ea rtland Bank H i llc res t Ban k Intrust Ba n k Key Bank Comm ercia l Mortgage LaSa ll e Ban k M etca l f Ban k Midland Loa n Services Misso uri Ba nk & Trus t MuniMae Midl and, LL C Newm an Fi n ancial Services North Am eri Cil n Savi n gs Bank Northmarq Capit al , Inc . Peop les Ba nk Commerce Bank Country Cl ub Ba nk Credit Suiss e Fi rst Bos to n EF&A Funding First Federa l Ba nk First Kan sas Bank First M o rtgage Inves tment Corp orati on Firs t Na tional Ba nk of O lat he G M AC Commerc i al Mort gage M&l Ba n k Q uantum First Capital Red M o rt gage Ca pi tal , In c . Sec urity Ban k of Kansas Southern Pac ific Ban k So uth wes t Ban k Tri ad M ortgage & Realty U MB Bank U nion Ba nk United M isso ur i Bank US Ban k Va lley V iew St ate Ba nk Was hington M o rt gage W ells Fa rgo Thelman Fina ncia l Corporations, Developers and Institutional Clients A llian z Life Insurance Company A llsta te In surance St . Luk e's H ea lth System Bo y Scouts of America Burlington North ern CA LPER S Cessna Aircra ft Company Coll iers Tu rl ey M artin Tu cker Copaken , White & Blitt Excel Corporation FMC Corpo rt~tion GE Cap it al General Serv ices Administrations Grubb & Elli s Hallmark Ca rd s Hunt Midwes t ).A. Peterson C ompt~ny Prin ci pal Life Insu rance Company Prin cipal Mutual Life Arms trong Teasda le Sc hlafly & Dav is Husch, Blackwell, Sanders Craft , Fridkin & Rh yne De loitte & To uche Ferree , Bunn , O 'Grady & Runb erg So nn ensc h ein, N ath & Ro se nt ha l , LLP Lathrop & Gage McAnan y Van Cleave & Phillips, P.A . MHM Pr ope rty Ta x Consultants Mitchell , Kri st! & Li eber Ern st & You ng Sch lage l , Gord on & Kin ze r LL C Ame ri ca n State s In suran ce Propert y Tax Resea rch Comp any Prot ect ive Life In surance Compan y Sa lvati on Arm y Sava ge & Browning Se nt i nel Rea l Estate Company Shaw nee Miss ion Medical Center Shelter Ins u rance Jeffrey Smith Company State Farm Fi re and Casual ty Insurance Stern Broth ers Stephens & Company, Inc. Terra Ven t ure, Inc. TRI Capital Wai -Mart Store s, Inc. Washington Ca pita l Weingart Foundation Ya rco Companies YWCA Zimmer Real Estate Service s Ac counting and law Firm s Nort on, H ubba rd, Ruzicka & Kreame r Pay ne & Jones Orri ck & Assoc iates Polsinelli Shugart PC Pri cewa terhou se Coopers Shook Hardy & Bacon Spence r Fane Britt & Browne Stin son Morri so n Hecke r Wallace, Sa unders, Au st in, Brown & Enoc hs AREA DEMOGRAPHICS SHANER APPRAISALS , INC. .............. 2000 Population 2010 Population 2012 Population Execut 1ve Summary Jefferson City Jefferson City, MO (2937000) Geography : Place 2017 Population 2000-2010 Annual Rate 201o-2012 Annual Rate 2012 -2017 Annual Rate 2012 Male Population 2012 Female Population 2012 Median Age Prepared by laird GoldsboroughMAI Jefferwn Oty, MO (29370 ... 41,960 43,079 43,506 44,636 0 .26% 0.44% 0 .51 % 50.7% 49 .3% 37 .7 In the Identified area , the current year population Is 43,506. In 2010, the Census count in the area was 43,079. The rate of change since 2010 was 0.44 % annually . The fiVe-year projection for the population in the area is 44,636 representing a change of 0.51% annually from 2012 to 2017. Currently, the population Is 50.7% male and 49.3% female . ....... The median age In this area Is 37. 7, compared to u.s . median aoe of 37.3 . ............. 2012 White Alone 2012 Black Alone 2012 American Indian/Alaska Native Alone 2012 Asian Alone 2012 Pacific Islander Alone 2012 Other Race 2012 Two or More Races 2012 Hispanic Origin (Any Race) 78.6% 16.2% 0 .3% 1.7% 0 .1 o/o 0 .9% 2 .3% 2 .9% Persons of Hispanic origin represent 2 .9% of the population In the Identified area compared to 16.9% of the U.S. population. Persons of Hispanic Origin may be of any race . The Diversity Index, which measures the probability that two people from the same area will be from different race/ethnic groups, is 39.3 in the Identified area, compared to 61.4 for the U.S . as a whole. " ........ ,. 2000 Households 2010 Households 2012 Total Households 2017 Total Households 2000-2010 Annual Rate 2010-2012 Annual Rate 2012-2017 Annual Rate 2012 Average Household Size 16,403 17,278 17,432 18,001 0 .52 % 0 .40% 0 .64 % 2.25 The household count in this area has changed from 17,278 in 2010 to 17,432 in the current year, a change of 0.40% annually . The five-year projection of households Is 18,001, a change of 0.64% annually from the current year total. Average household size Is currently 2.25, compared to 2.21 In the year 2010. The number of families in the current year is 10,100 In the specified area. DIID lilliE lncume i5 opr-essed In OJrTftlt dollws s-a: U.S. Census a..-, Census 2010 Sumnart Air I . Esn foreosts for 2012 ..S 2017. Esri converted Census 2000 data Into 2010 geogfllphy . January 29, 2013 il e ......... ............ lnceMe Execut ive Summa r y Jefferson City Jefferson City, MO (2937000) Geography : Place 2012 Median Household Income 2017 Median Household Income 2012-2017 Annual Rate A.....-Houoohold 1 .... 2012 Average Household Income 2017 Average Household Income 2012·2017 Annual Rate ... ~ ....... 2012 Per Capita Income 2017 Per Capita Income 2012-2017 Annual Rat.e Heuo1holll• -.y lncDIIM Prepared by laird GoldsboroughMAI Jefferson Oty, MO (29370 ... $46,525 $55,537 3 .60% $58,464 $64,945 2 .12% $25,845 $28,630 2 .07% Current median household Income Is $46,525 In the area, compared to $50,157 tor all U.S. households. Median household Income is projected to be $55,537 In five years, compared to $56,895 for all U.S. households Current average household income is $58,464 in this area, compared to $68,162 tor all U.S households. Average household income is projected to be $64,945 In five years, compared to $77,137 for all U .S. households Current per capita Income Is $25,845 In the area, compared to the U .S. per capita Income of $26,409. The per capita income Is projected to be $28,630 In five years, compared to $29,882 tor all U.S. households " ........ 2000 Total Housing Units 2000 Owner Occupied Housing Units 2000 Owner Occupied Housing Units 2000 Vacant Housing Units 2010 Total Housing Units 2010 Owner Occupied Housing Units 2010 Renter Occupied Housing Units 2010 Vacant Housing Units 2012 Total Housing Units 2012 Owner Occupied Housing Units 2012 Renter Occupied Housing Units 2012 Vacant Housing Units 2017 Total Housing Units 2017 Owner Occupied Housing Units 2017 Renter Occupied Housing Units 2017 Vacant Housing Units 17,580 9 ,895 6,509 1,176 18,852 10,085 7,193 1,574 18,951 10,196 7,237 1,519 19,394 10,610 7,390 1,393 Currently, 53.8% of the 18,951 housing units in the ar ea are owner occupied; 38.2%, renter occupied ; and 8 .0% are vacant. Currently, In the U.S ., 56.5% of the housing units in the area are owner occupied; 32.1% are renter occupied; and 11.4% are vacant. In 2010, there were 18,852 housing units In the area -53.5% owner occupied, 38.2% renter occupied, and 8 .3% vacant. The annual rate of change in housing units since 2010 Is 0 .23%. Median home value in the area Is $133,265, compared to a median horne value of $167,749 for the U.S . In five years, median value is projected to change by 2.29% annually to $149,256 . .,.. llaele: ll'lalme is ~ "' wnent dolclrs ~u.s. Census aur-.. Census 2010 Sammary Fir 1 . Esn fOROSis f or 20U imd 2017 . Esn converted Census 2000 data into 2 010 geool'l1ph y. January 29, 2013 < 20 1 Esn GLOSSARY SHANER APPRAISALS, INC. GLOSSARY Unless otherwise noted, the following definitions are taken from The Dictionary of Real Estate Appraisal, Fourth Edition , published by the Appraisal Institute in 2002. Accrued Depreciation The difference between the reproduction or replacement cost of the improvements on the effective date of the appraisal and the market value of the improvements on the same date. (p. 4) Appr1lul (n .) The act or process of developing an opinion of value; an opinion of value. (adj.) Of or pertaining to appraising and related functions such as appraisal practice or appraisal services. (USPAP, 2002 ed.) (p . 15) Extraordinary Assumption An assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser's opinions or conclusions. Extraordinary assumptions presume as fad otherwise uncertain information about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends ; or about the integrity of data used in an analysis. An extraordinary assumption may be used in an assignment only if: • It is required to properly develop credible opinions and conclusions; • The appraiser has a reasonable basis for the extraordinary assumption; • Use of the extraordinary assumption results in a credible analysis; and • The appraiser complies with the disclosure requirements set forth in USPAP for extraordinary assumptions. (USPAP, 2002 ed .) (p . 107) Fee Simple Estate Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat. (p. 113) Highest and Best Use The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum profitability . (p. 135) Hypothetical Condition That which is contrary to what exists but is supposed for the purpose of analysis. Hypothetical conditions assume conditions contrary to known facts about physical , legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis. A hypothetical condition may be used in an assignment only if: • Use of the hypothetical condition is clearly required for legal purposes, for purposes of reasonable analysis, or for purposes of comparison; • Use of the hypothetical condition results in a credible analysis; and I • The appraiser complies with the disclosure requirements set forth in USPAP for hypothetical conditions. (USPAP, 2002 ed.) (p.141) Investment Value The specific value of an investment to a particular investor or class of investors based on individual investment requirements; distinguished from market value, which is impersonal and detached. See also Market value (p. 152) Leased FH Interest An ownership interest held by a landlord with the rights of use and occupancy conveyed by lease to others. The rights of the lessor (the leased fee owner) and the leasee are specified by contrad terms contained within the lease . (p . 161) Leasehold Interest The interest held by the lessee (the tenant or renter) through a lease transferring the rights of use and occupancy for a stated term under certain conditions. See also Negative leasehold; Positive leasehold. (p. 162) Market Value The most probable price which a property will bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each ading prudently and knowledgeably, and assuming the price is not affeded by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1. buyer and seller are typically motivated; 2. both parties are well informed or well advised and ading in what they consider their own best interests; 3. a reasonable time is allowed for exposure in the open market; 4 . payment is made in terms of cash in US. dollars or in terms of financial arrangements comparable thereto; and 5. the price represents the normal consideration for the property sold unaffeded by special or creative financing or sales concessions granted by anyone associated with the sale. (12 C.F .R. Part 34.42(g); 55 Federal Register 34696, August 24, 1990, as amended at 57 Federal Register 12202, April 9, 1992; 59 Federal Register 29499, June 7, 1994) (p. 177) Negative Leasehold A lease situation in which the market rent is less than the contrad rent. (p . 193) Neighborhood A group of complementary land uses; a congruous grouping of inhabitants, buildings, or business enterprises. (p. 193) Positive Leasehold A lease situation in which the market rent is greater than the contrad rent. (p. 215) Replacement Cost The estimated cost to construd, at current prices as of the effedive appraisal date, a building with utility equivalent to the building being appraised, using modem materials and current standards, design and layout. (p. 244) Reproduction Cost The estimated c ost to construct, at current prices as of the effective date of the appraisal, an exact duplicate or replica of the building being appraised, using the same materials, construction standards, design, layout, and quality of worbnanship and embodying all the deficiencies, superadequacies, and obsolescence of the subject building. (p . 244) Use Value The value a specific property has for a specific use; may be the highest and best use of the property or some other use specified as a condition of the appraisal; may be used where legislation has been enacted to preserve farmland , timberland , or other open space land on urban fringes . (p. 303) ADDITIONAL INFORMATION SHANER APPRAISALS, INC. July 24, 2013 JasonRoos 10990 Quivira, Suite 100 Overland Park, KS 66210 jroos@valbridge.com Re: Capital MaD Property Conditions Dear Mr. Roos, Jmaiellec:d Gcocnl Managu Covington Realty Partoen S73) 193-5437 (Office) (S73) 893-5447 (Fax) jrccd@coYin~com Covington Realty Partners is the property manager for the Capital Mall property in Jefferson City, Missouri. On June 11 , 2013 , I personally toured the Capital Mall to view the property conditions on behalf of the property owner. During my tour I noted the following property conditions that appear to be relevant to your work in updating the blight study for the Capital Mall: Physiul Deterioration and Potential Safety Issues. 1. Facades-The ~e of the mall property is in poor condition in several places. See enclosed picture 1 for an example of typical f~e conditions. 2 . Roof-The roof is in poor condition in several places. There are a substantial number of active roof leaks and signs of a history of roof leaks in 14 of 30 of the tenant areas observed. In addition, substantial repairs will be needed to the roof parapet. See enclosed pictmes 2 to 11 for evidence of the roof condition and leaks found. 3 . HV AC-The HV AC system is in poor condition. It has been recommended that 11 HV AC units be replaced in the short tenn due to their substantial deterioration, age and obsolescence. 4. Steel Savice Doors--Qne..half of the steel service doors are rusted and deteriorated along the door jambs. See enclosed picture 12 for an illustration of the typical rusted steel door. 5. Painted Fmishes----Several tenant entries are in need of immediate painting. 6 . EIFS-Damage was observed to the underlying EIFS (~) at several of the tenant entries, most notably at vacant spaces at the southern cod of the building. See enclosed pictures 13 to 16. See also picture 17 for typical dried and aacked control joint sealant found on the tbrougbout the ~e. July 24 , 2013 Page2 7. Suspect Mold-Visual signs of suspect mold have been identified two tmant areas. See enclosed picture 8 and 11 . This is a safety and health issue, in addition to a deterioration issue . 8. Pavement-As you already noted the parking lot payment is higbly deteriorated and in need of replacement. See enclosed pictures 18, 19 and 20 for recently taken of the parlcing pavement conditions. 9. Curbs-The curbs are deteriorating in several places throughout the property. See enclosed picture 21 of a damaged curb on the property that was typically observed . 10. Trip Hazard-At west side of JC Penney a trip hazard was identified . See enclosed picture 22. 11. Service Entry Lights-There are several damaged at lights over service entry doors . See enclosed picture 23 for typical missing lights over service entry doors. This is a safety issue as much as a deterioration issue. 12. Windows-Replacement needed at small anchor tenant at south end of building . See enclosed picture 24 . Fire Safety . The fire sprinkler system has not been tested since October 2009 and it is supposed to be tested annually. Picture 25 shows the sprinkler riser with expired inspection tag. Clearly lack of testing is a fire safety issue. ADA Coaformaace. Although we have not had a full ADA review there are some known non- conformance issues. Some identified issues are: 1. ADA parking not properly tnarked . For example, one posted sign for multiple handicapped accessible spots. See enclosed picture 26 . 2. No signage for wheel chair accessible facilities . Please contact me should you have any questions. A-~eRJ ( 458552 16.2 Capital Mall Pictures -June 11 ,2013 1. Typical fa~de ooadition. 2. Roof surface. 4. Damaged roof and wora surface. 45855216 .2 6. South side of roof with ponded water and vegetation growth. 4S8SS2 16.2 8. Staiaed ceilia~ tile with mold in teaant 52. 458552 16.2 10. Typical stained ceiling tiles. 4S8SS2 16 2 12. Typical rusted steel service door. 458552 16.2 14. Damaged ElF'S a ad paiat at southern side of building. 45855216.2 I 16. Damaged EIFS aad paiat at southern side of building. 4S85S216.2 18. Damaged asphalt pavement at entry to service area. 4SIISS216.2 I I I 20. Damaged asphalt pavement. I 4S8SS216.2 21. Typical damaged concrete curb. 22. Trip laazard adjaceat to JC Penney. 45855216 2 24. Damaged window with water iafiltratio• at vacant minor anchor tenant. 451552 16.2 26. Accessible parking with one sign for three spaces. 45855216.2 •• News: National llll&e~~eall t • October 03, 2012 Written by Randyl Drummer (rdrummer@costar.com) The De-Mailing of America : What's Next for Hundreds of Outmoded Malls? Strained by Online Commerce, Changing Shopper Preferences and Trendier Competition, Many Outmoded Malls Face Bleak Future The widening gap between strong malls with rising sales and failing malls that are hemorrhaging retailers, sales dollars and foot traffic has led to dire forecasts by some analysts for the future of older enclosed malls as changing demographics and buying habits suck the life from aging and poorer quality properties . Many trade areas are unable to support multiple malls, with dominant properties increasingly attracting retailers and shoppers at the expense of outmoded centers. Some of these properties, memorably documented on web sites like Deadmalls .com , are so devoid of shoppers and stores that they may be suitable only for demolition or as sets for an episode of "The Walking Dead ." REITs like Simon Property Group (NYSE : SPG) and General Growth Properties (NYSE : GGP), the nation's largest mall operators, have gotten the message and are busy divesting lesser-performing properties . Meanwhile, emboldened by low prices for these older malls, investors are beginning to snap up the properties, confident they can reposition and turn around malls that are on life support, or raze it to gain access to the often-valuable land to build apartments or other uses. The litany of issues facing distressed malls and large shopping centers is well documented, with ills ranging from changing neighborhoods, increased competition from online sales, the appeal of newer lifestyle and power centers, consolidation of anchor stores and sharp downsizing by in-line tenants. In a widely quoted report, Green Street Advisors has forecast that 10% of the nation's 1,000 enclosed malls will fail by 2022, eventually converting to uses other than retail. Ed itor's Note: This is the first of a two-part CoStar series on aging and distressed malls. Next week: What strategies have been effective as communities and owners try to reclaim a growing inventory of obsolete retail space? Age appears to be a contributing factor. Of more than 200 malls and large U.S. shopping centers with 250,000 rentable squa r e feet or higher that are hampered by vacancy rates of 35% or higher --a clear marker for shopping center distress --86.5% were built before 2000; according to CoStar Group data . Of these distressed regional mall, power center and community center properties, 43 .5% were built in the 1970s and '80s, another one -quarter were built in the 1990s, and 17.5% were built in the 1960s and prior. The average center in the distressed group was built in 1983 and had a vacancy rate of 50 .6%. Among the 44 regional and super-regional malls (usually malls of 1 million square feet or above) with distressed vacancy, the average rate was 54 .5%, with older super regional properties built from 1960 to 1990 averag ing just under 60% vacant. We're Not Overbuilt, We're Under-Demolished •1 don't think we're overbuilt, I think we're under-demolished, • said Daniel Hurwitz, president and CEO of Copyright (c) 2012 CoStaf Really lnformatiou, Inc. AJ rights reserved. CONTINUED: The De-Mailing of America: What's Next for HW'Mirada of Outmoded Malls? DDR Corp ., a Cleveland -based REIT, during ICSC's recent Western States conference in San Diego. "When you have [tenants] looking for space and nothing new being built, and we're sitting at mid-90% occupancy levels, it's hard to argue we're overbuilt when they're scrambling to find 10,000 square feet." "There is a sense of reality that we all have to come to that there are projects that are not going to lease . Retail has a finite lifespan and once you reach that lifespan, you can put up all the signs you want, and charge as low rent as you want, but that doesn't make [tenants] want to take the space ." Follow Randy Drummer on Twitter for live news updates. As DDR 's Hurwitz makes clear, shopper's preferences have changed and demand for large enclosed malls is quite different than It was 20 years ago. Changes in shopping patterns and preferences is also readily apparent in the shrinking number of department stores and the consolidation among trad itional shopping center anchors like Sears Hold ings, Kmart, Best Buy, The Gap and Office Max . All of those chains have announced plans to shut down stores in 2012 . The announced closures for these five retailers alone could add another 15 million squa re feet of mostly mall and power center space to the market this year, according to analysis from Property and Portfolio Research (PPR), CoStar's real estate analytics and forecasting company. But analysts also see the closings and repositionings as a healthy process. As market forces cull weaker properties, successful malls grow stronger. "Malls and buildings age. We don't design for the life-cycle of buildings like we used to 50 or 60 years ago," said Robert Yuricic, an architect with Greenbergfarrow, a retail-oriented design firm and the second - largest restaurant architect in the country. "Malls are designed for a much shorter shelf span and they need to be refreshed ." Many of the earliest malls were buildings connected by pedestrian walkways and common areas, si mi lar to today's lifestyle center. Many malls began to tum inward in the 1960s and '70s, with the typical suburban mall composed of department stores and smaller shops connected by a roof, essentially forming an air-conditioned cave, Yuricic noted . Walking into such malls is "like going into the bowels of a casino, where the door seems to disappear and you can't find your way out," he said . "People want to go to what's new and shiny and if you don't give it a facelift, it becomes old and tired and not able to attract the younger, more ch ic crowd with more disposible income," Yuric ic said . Kristin Mueller, executive vice president and director of retail business development with Jones Lang LaSalle in Atlanta, has a simple message to those who would write their obituary: Malls are not dead. "The vast majority of the malls in the U.S. will continue to be incredibly relevant and are thriving," Mueller sa id . "There are many indicators that show malls are going very strong; you see It in thei r sales performance and In the REIT stocks of those that own two-thirds of the malls in this country. "There are many different ways that we as an Industry are working with malls to make sure they're relevant for thei r shoppers and communities, usually through a combination of new retail and other alternative uses," Mueller said. Mueller acknowledged that some, "perhaps more than a handful," of the country's stock of 1,200 to 1,400 endosed malls are in serious trouble. "Those malls have usually been unfavorably impacted by their surrounding communities, or they've been outflanked by bigger, better competition" from lifestyle and power centers, Mueller said . Copyright (c) 2012 CoStar Really Information, Inc. AI righls reserved . CONTINUED: The De-Mailing of America: What's Next for Hundreds of Outmoded Mah? Distress is still a significant factor for these properties, even as the bear market for retail investment appears to be coming to an end and transaction activity Is now at par with the average annual volume of the past decade . About 11% of total deal volume by dollar value over the past four quarters was from forced sales, down from nearly 20% in early 2011 but well above the average 1% from 2000 to 2008, according to PPR . It appears almost certain that the pipeline of distressed retail property will continue to flow, with plenty of commercial mortgage-backed securities (CMBS) loans backed by collateral that's behind on payments and carrying thin debt service coverage ratios. These distress deals often reflect financing Issues rather than prevailing market conditions . Not surprisingly, their troubles have drawn the attention of Wall Street rating agencies that are sufficiently worried enough about the widening gap between the country's best and worst performing malls to put out warnings that could further affect the supply of credit and finandng to the mall sector. Fitch Ratings said Its "very cautious " outlook on U.S. malls has prevented the agency from rating some CMBS transactions this year. While It's fa irly easy to understand the dynamics of the best and worst properties, the condition of the second -tier malls in the middle is more difficult to parse, Fitch said in a recent report. Fitch-rated deals Include about 1,150 retail loans of over $20 million, many secured by malls. Of these, 126 are already In spedal servicing and 44 assets are real estate owned (REO) and many are among the largest contributors to Fitch Ratings' overall expected deal losses. Who Will Buy A Dying Mall? In its own report last summer, Moody's Investors Service also noted the widening performance gap between stronger and weaker malls . When a marginal mall defaults, losses can well surpass those typical for a commerdal property loan. "Renovating or reconflguring an underperforming mall may cost many millions of the dollars," said Tad Philipp, director of Moody's CRE research. "What's more, should the location lose its viability for retail altogether, the value to revert to land less demolition cost [will produce] an even greater loss." Overall, however, mall investment has actually been stronger over the past few years as a percentage of total retail investment than It was during the peak of the last cycle, said PPR real estate economist and retail spedalist Ryan McCullough . CoStar COMPs data for the largest U.S. markets shows that mall Investment comprised 34% of total shopping center transaction dollar volume from 2010 to the present, up from 28% between 2005 and 2007. "I don't think that Investors have necessarily been scared off from malls due to the obsolescence of a subset of the category," McCullough said . "Investors, however, are pickier about the quality of the mall properties purchased today, which is showing up in the pricing data." On a dollar-per-square-foot basis, malls with a vacancy rate of 5% or less traded at a 45% premium over those with higher than 5% vacancies from 2010 to present. During the 2005-07 market peak, the premium was a negligible 2%, he noted . "The short of It is that investors are recognizing quality malls --those with h igh occupancies, solvent anchor tenants, good population density and access to affluent shoppers --as stable, low-risk, income- produdng assets and will pay up for them today," McCullough said . Copyright (c) 2012 CoStar Really Information. Inc. AJ rights reserwct CONTINUED: The De-Malting of America: What's Next for Hundreds of Outmoded Malls? "Poor quality malls, on the other hand, are either not trading or selling at a steep d iscount, and pe r haps are scheduled for demolition or conversion ." "As an industry, we're not going to start throwing up malls as the economy recovers," added JLL's Mueller. "In fact we stopped building malls a while ago and started to build lifestyle centers in n iche lnflll locations between malls." Instead, real estate services providers like Mueller and her JLL team are focusing on creati ve redevelopment and repositioning strategies for distressed properties . Often means chang ing out the type and size of the retail --or considering non -retail uses, such as a university or hea lth care facility. Mega - churches have taken over former anchor spaces. Others have become call centers and government offices . Even malls that continue to thrive are being redesigned as town squares -adding more entertainment and service elements. Simon Property is remodeling 15 to 20 malls a yea r , adding such amen it ies as electric- car charging stations and stadium -seating theaters . Malls today have to "provide a unique set of shopping, dining and entertai nment experiences," Simon's President and COO Richard Sokolov told the New York Times, Including scheduling 20,000 events a year to draw traffic, such as cook ing demonstrati ons . As the mall's 50 -year reign as the ultimate shopping destination appear to be coming to an end , CoStar News w ill look at examples of successful mall adaptations In a follow up story next wee k . Follow Randy Drummer on Twitter for live news updates . Copyrighl (c) 2012 CoStar Really Information. Inc. AJ rights reserved. ~· Ne-: National lilA&!*'' 1 October 10, 2012 Written by Randy! Drummer (rdrummer@costar.com) Can This Ma ll Be Saved? Elements Needed for a Turnaround Include Lowe r Debt , Deep Pockets Despite Major Risks, Some Gutsy Owners and Investors Are Hoping To Cash In On Value-Add 8-Ma/1 Turnarounds and Repositionings Last week, CoStar News reported on the daunting challenges faced by hundreds of outmoded malls i n rema ining relevant in a Increasingly Darwinian retail environment. In this, the second of a three-part series, we look at the signs that may signal a mall's days may be numbered, and how some gutsy investors are taking on the challenge of reviving moribund properties. According to retail property experts, changes in a couple of key vital signs often provide the first signs that a mall may be In trouble . Consistent declines in retail sales per square foot over an extended time Is one big warning sign, according to Gerard V . Mason, veteran retail specialist and executive managing director of Savills US . Higher quality class A malls should take in at least $400 per square foot, while a decent B-class mall will yield about $350 a square foot. Any time a mall's sales fall below $300 per square foot, It's likely in very serious trouble, according to Mason . Likew ise, a healthy mall anchor store should log $200 at least per square foot, and any anchor that falls below $100 a square foot is probably in imminent danger of closure. Another critical factor Is a store's so -called health ratio, also known as occupancy cost, which Is calculated by dividing the annual rent by total sales for the year. Healthy mall store ratios average about 11% - 12 %. Any ratio above 15% will likely land the store on a landlord's tenant watch list, and above 20%, the store is probably destined to go dark. Once one or more anchors or junior anchors close, it sets off a chain reaction of reduced shopping traffic, increased financial pressure on smaller in-line stores and decreased revenue for maintenance and operations that can quickly send a mall --along with many surrounding businesses that benefit from mall traffic --into a death spiral. "The retail business Is very Darwinian. Formats come and go, and right now is a very dangerous time to be invested in B malls," Mason said . "A lot of them will survive, but the competition has become almost overwhelmingly stronger than before the downturn." cavernous Gap Between the Have's and Have-Nots On paper, u.s. regional malls are among the strongest performing types of assets for real estate investors. Total returns for publicly traded regional mall companies increased 48.5% at the end of the third quarter from a year ago, the highest among all retail types, according to the FTSE NAREIT US Equity REIT Index. But a cavernous gap divides the performance of top-tier malls that attract the trendiest retailers and rents are on the rise, and older, lower-grade enclosed properties that struggle to attract foot traffic. Only about one-third of the 1,300+ malls in the U.S. qualify as high-growth, Investment-grade properties, according to Savills' Mason . "The recovery has been uneven across mall quality types," said Mason . "In the Midwest and other lagging Copyrigtll (c) 201 2 CoStar Realty Information, Inc. AJ rights reseM!d. CONTINUED: Clln This Mall Be S..ved? Elements Needed for a Turnaround Indude Lower Debt, Deep Pockets areas, the second mall in a three -mall town may be on the brink of not being worth Its debt. The recession has exacerbated the gap between the mall haves and have-nots." As retailers review their sales performance per store with an eye on trimming costs, the under-performers at have-not malls are especially vulnerable to a round of closings. The ongoing trend among retailers toward smaller stores also contributes to the widening gap. Mall staples such as Old Navy, which used to occupy 25,000-square-foot stores, are now comfortable in 10,000 square feet. Even the mall in-line tenants have downsized to smaller, more productive stores. Vacancies from down-sizing retailers are often welcomed at successful malls as they provide an opportunity to sign more retailers at higher rents. But for a struggling mall, the empty spaces just reinforce a negative perception among shoppers. Meanwhile some retailers are simply foregoing B mall locations altogether, including Lululemon Athletica, a company specializing in high-end yoga-style exercise apparel. "We have focused on only being in very strong malls," said Christine M. Day, president and CEO, of Lululemon Athletica during a recent conference call with investors. "We've had a real estate strategy of not bundling or taking weaker malls, and we go to [lifestyle] centers or streets, which allow us to really drive our business through community." Sifting the Viable from Lost causes In many cases, the prospects for reviving a dead mall as a viable retail property are not good. The best option may be to demolish and start over with a different use that does have demand, such as residential apartments. However, in cases where an older property has been over-shadowed by new competition, and the location continues to enjoy strong demographics capable of supporting a large retail presence, investors have been successful in repositioning former failed malls. In general, these successful turn-arounds appear to involve a combination of three main elements: deleveraging, 'de-mailing' and deep pockets . Buying over-leveraged but otherwise viable malls out of foreclosure can provide investors with an opportunity to acquire the property at a basis low enough to justify paying for capital improvements and attracting retailers with lower rents . Rouse Properties Inc., (NYSE : RSE) and CBL & Associates Properties (NYSE: CBL) have both stepped up to buy B-class suburban malls, particularly where they can find so-called "only game in town"-type properties. Follow Randy Drummer on Twitter for live news updates. Earlier this year, Rouse acquired Grand Traverse Mall, a 590,000-square-foot enclosed mall in Grand Traverse, MI, out of receivership for $66 million . The mall was formerly owned by the upstart REITs former parent GGP, which handed nearly a dozen malls back to its lender last year. In another recent example, West Manchester Mall, a 742,000-square-foot enclosed center built in York, PA, in 1981, recently sold to M&R Investors after spending more than a year on the market for $17.5 million --less than $24 per square foot and far below the price the previous owner, The Lighthouse Group, paid several years ago. Mason, whose firm represented the seller, said the sale involved "a classic de-mailing scenario." The 62% occupied mall faced competition from York Town Center, a CBL & Associates-owned power center that opened a few miles away. After the power center opened in 2007, JCPenney and Value City Copyrigtt (c) 2012 CoStar Realty Information. Inc. AI rights reserved. CONTINUED: can This Mall Be Saved? Elements Needed for a Tumarouncllndude Lower Debt, Deep Pockets stores went dark at West Manchester, but Ughthouse was able to lease the spaces to Wai-Mart and Kohl's. A Macy's department store and Regal Cinemas theater also anchor the center. However, sales at the in - line shops gradually fell and several national chains left the mall. The remaining shops have been converted to month-to-month leases and the In-line space will likely be demolished and converted to a big -box power center. "It was a classic case of too much mall GLA [gross leasing area] in a one-mall town, • Mason said. •aut it still had a reason to exist, with an excellent location, and there was a need for big box stores in the area." Many malls haven't aged very well and shoppers want to go where it's shiny and new. Any successful turnaround often requires a major property makeover. This may be even more true in highly competitive retail markets, such as Santa Monica. Before Macerich Co. removed the roof and completely remodeled and re-tenanted with interesting shops and restaurants, Santa Monica Place located at the bottom of the Third Street Promenade in Santa Monica, CA, was one of those old-school B malls with B tenants, noted Southern California retail property expert Steve Jaffe, executive vice president and general counsel with BH Properties. "Macerich has deep pockets and spent a lot of money and was able to raise the stakes and go upscale, but they already owned the mall," Jaffe said, conceding that new ownership might have a difficult time obtaining financing for such a venture. "It's one thing if you already own it and want to demolish, It's another to step into it as a new owner. Until the financing market heats up across the board, lenders won't readily finance what effectively would be vacant retail rehab projects without tenants lined up." NEXT WEEK: CoStar spotlights 'have-not' malls that are using innovative strategies and drafting unconventional tenants to revive former troubled mall properties. Copyrigtt (c) 2012 CoStar Realty Information. Inc. AI rights reserved. EXHIBITE DEVELOPMENT SCHEDULE Acquisition Renovation* * Dates are proposed and ap proximate 42 4 11005 12 December 20 12 Co mmencin g Feb ru ary 20 14 , rehabi litate Capita l Mall Building, common area s, and infrastructure ; co mpl ete construction/rehabilitation by Augu st 20 14 Commenc in g February 2015 , redevelop and lease /se ll vacant pad site and redevelop and lease vaca nt unit s within Capita l Mall ; comp lete co nstruction /devel o pment by Au gust 2015 Co mm enc in g February 20 16, develop and lease/sell vaca nt pad si te and redevelop and lea se vacant unit s wi thin Capital Mall ; complete co nstructi on/development by August 20 16 Com men cin g February 20 17, develop and lease /sell vaca nt pad site and redevelop and lease vacant units wit hin Cap ital Mall ; co mplete co nstru ction/development by August 2017 Co mmencing February 20 18 , rede ve lop and lease remaining vaca nt unit s wit hin Cap ital Mall ; complete development by Au gust 20 18 E-1 EXHIBIT F SO URCES AN D USES OF F UN DS & ES TIMATE D REDEVELOPM EN T PROJECT CO ST S AN D REIMBUR SABLE PROJECT CO ST S E ~ Ql c: :.:J 42411 005 12 Reimbursable Project Costs* Ca te gory '!~ • Total Pro ject Dev eloper's CID 1'.4 Development Costs Costs Costs nF-* Sales Tax Land Acquisition $ 11 ,000,000 $ 11 ,000,000 $ . $ . Hard Construction Costs $ 20,316,500 $ 6,619,976 $ 9,604 ,98 7 $ 4,0 91,537 Renovations $ 8,680,500 $ -$ -$ - l andscapin g $ 250 ,000 $ -$ -$ - Public Space FF&E $ 886 ,000 $ -$ -$ - Comron Area lmprovrre nts $ 10,000 ,000 $ -$ -$ - Replacerrent RMU 's $ 500,000 $ -$ -$ - Soft Renovation Costs $ 3,115 ,825 $ 1,11 5,825 $ 1,000 ,000 $ 1,000,000 Archooctura l & Engineeri ng $ 350,000 $ -$ -$ - General Conditions $ 100 ,000 $ -$ -$ Taxes, Insurance, Appraisal $ 50 ,000 $ -$ -$ - Financing Costs/Co nst lnerest $ 1,000 ,000 $ -$ -$ - Adninis lr ative /Overhead $ 300 ,000 $ -$ -$ - Legal $ 250 ,000 $ -$ -$ - Survey $ 50 ,000 $ -$ -$ - Developer Fee $ 1,015 ,825 $ -$ -$ - Contingency $ 2,451 ,650 $ 2,451 ,650 $ . $ . Hard Cost Continge ncy ( 1 0%) $ 2,03 1,650 $ -$ -$ - Soft Cost Co ntingency (20 %) $ 420 ,000 $ -$ -$ - Tota l Development Costs $ 36 ,883 ,975 $ 21 ,187 ,451 $ 10 ,604 ,987 $ 5,091 ,537 Percentages ofT otal Project Costs by Caegor 100% 57.43 % 28.75% 13.80 % *All amounts are estimates and subject to cha nge as actual costs are incu rred and incentives rece ived. TIF and CID reimburseab le project costs are not limited by categories set forth in the worksheet above , and all TIF and CID reimburseable project costs shall re imbursed pursuant to a mu t ually acceptable development agreement between the Develope r, City , and CID , all purs uant to , and in comp liance with , t he CID Act and TI F Act , as app licab le. Reimbursable project costs for TIF and CID are Net Present Valued assuming 7.5% discourt rate and based on reimbursement to Developer on an as -collected basis **Includes $5,091 ,537 in revenue from the proposed CI D 1% Sa les Tax , which is contingen t upo n creation of the CI D and imposition of the CID Sales Ta x F-1 t l t t t l L l t t t t , . .. t t Source TIF CID Central Bank FHC/Developer EXHIBITG SOURCE OF FUNDS FOR ALL ESTIMATED REDEVELOPMENT PROJECT COSTS Amount Term Status Contact Person $10,604,987 23 Years Pending n/a $5,091,537 40 Years Pending nla $10,187,451 TBD Committed Bud Peck, SVP $11,000,000 TBD Committed Kirk Fanner Contact Tele12hone n/a n/a 573.634.1311 573.635.2255 *TIF and CID revenues are Net Present Valued at 7.5% and based on reimbursement of Developer on an as-collected basis. Also, allocation of sources of funds between Central Bank and FHC/Developer are based on preliminary estimates and may not reflect the ultimate level of funding provided by each entity. Collectively, however, the Developer anticipates that these sources will be sufficient to complete the Project. 42411005.12 :::c: I ....... oc~ 11 If · I i i ~ II ~~~~ II lr lr rnrn l ~ I ~ ~ I ~ I ~ l ~l i II ~ l ~l ~l i I ~ ~ llll!il ili l i l ~l i l ~ I ~ liJ i l ~l i I ~ EX HIBIT H ESTIMATED ANNUAL INCREASES J N ASSESSED VALUE AND RESUL TJNG PAYMENTS JN LIEU OF TAXES AND ECONOMIC ACTIVITY TAXES OVER LIFE OF PROJ ECT _ ........... ('~·l1•"11. ... " .... "'""""'. '"'"""'"""'"' 1-1-1 4241100~ 12 oL•l•I 4.,.,,.,,....,_.,.,,.P"'.,,.,,. .,,.....,.,..,.....,rl 1l111o-ll.t'f\ ... :.....,~, .......... "''· ................ 1-\;o• ,., ................ _ ~--... -.,. ....... ~\ ........... ,... .. ,,, ........ \-···-· .... --............... ,....,_... 141,. .. -............. J. ,... .... _........,_..,.,\ ........... . ,.,'Ya .. ·~··-......... "-•r-, ...... ,,._,,., .... _ .. ..... ,.,, .... , .• ~~· .. '" .•. ,.o~,...,....,.., ..... ~ _ .. n~ -,., EXHIBIT I EVIDENCE OF COMMITMENT TO FINANCE See Attached . 1-I 42 411005 .12 FHC FARME R H OLDI NG COMPANY Wednesday, September 04, 2013 City of Jefferson, Missouri Attn: Drew Hilpert, City Counselor 320 E. McCarty Street Jefferson City, MO 651 01 Re: Capital Mall Redevelopment -Letter of Interest to Fund Dear Drew : The purpose of this letter is to display our interest to assist in the redevelopment of the Capital Mall in Jefferson City, Missouri (the "Project") by providing financing to Cap ital Mall JC, LLC. With the assistance of Tax Increment Financing and Community Improvement District funding, we intend to fully support and finance the Project. Farmer Holding Company, LLC's interest and ab ility to fund the Project is further subject to the following conditions: 1) Final approval by applicable governing authorities for Tax Increment Financing and Community Improvement District financing in connection with the Project; 2) A satisfactory debt financing commitment and execution of loan documents; and 3) A full and satisfactory review of all financial and development data, including the development plan and schedule, in connection with the Project and borrower. We are excited about the opportunities available to the Jefferson City community from this Project and will support this Project in every way feasible . Although this letter should not be construed as an absolute commitment to fund this Project, we fully intend to support this Project by filling any financing gap or providing any additional financing to bring the Project to fruition . If you should have any further questions, please do not hesitate to contact me. Sincerely, ~ l?t-bud Fanner Farmer Holding Company, LLC 221 Bolivar Street, Suite 400 Jefferson City, Missouri 65101 (Ph) 573 .635.2255 1 August 1, 2013 Mr. Rob Kingsbury P.O. Box 104960 Jefferson City, MO. 65102 Central Bank e RE: Jefferson Ci ty Capital Mall Development Dear Mr. King sbury: It is the understanding of Central Bank tha t Capital Mall JC, LLC is applying to participate in the "Tax Increment Financing" (TIF)· and "Community Investment District" (CID) financing programs. If these applications are approved, the TIF and CID programs would-significantly benefit the Capital Mall development in assisting to fund costs incurred with redevelopment efforts. The Capital Mall development is an important economic base for Jefferson City and its surrounding area and .provides needed public use facilities. The TIF and CID programs are vital ingredients in Capital Mall JC, LLC's goals of retaining and creat i ng new jobs, providing additional capital investment , increasing tax revenues and maintaining and improving the Capital Mall development as a viable economic base for the citizens of central Missouri. In the past, Central Bank has fulfilled the f i nanc i al requirements o f Capital Mall JC, LLC and related entities. Credit has previously been provided to these parties for projects such as these and Central Bank is committed to continue to support their financial needs contingent upon a favorable analysis of each request. Cap i tal Mall JC, LLC h as the capacity to obtain financing for the portion of the redevelopment that requires conventional financing and Central Bank is capable of providing the credit necessary for Capital Mall JC , LLC to engage in this activity as assets of the bank exceed one billion dollars. Capital Mall J C, LL C is a customer· that is held in h~gh regard and Central Bank looks forward to assisting this entity with its future financial requ irements. With the involvement of the various funding sources, the i mprovements at the Capital Mall development will benefit our community, region and state. Central Bank supports the endeavors of Capital Mall JC, LLC with this project . Thank you. Truly yours, 6~~ Bud Peck Senior Vice President NMLS -525966 Ctlllral Bank, 238 MIIJisonStmt,jeffirson City, Mim11ri 6510 1, 5731634·1234 Mtmber Cmm•l B"nromp11ny Source TIF ClD Ce ntral Bank FHC /Developer EXHIBIT J SOURCE OF FUNDS FOR ALL ESTIMATED REDEVELOPMENT PROJECT COSTS Amount Term Status Contact Person $10 ,604 ,987 23 Years Pending n/a $5,09 1,5 37 40 Years Pending n/a $10 ,187 ,45 1 TBD Co mmitted Bud Peck , SVP $11 ,000 ,000 TBD Co mmitted Kirk Farmer Contact TeleQhone n/a n/a 573.634 .1311 573.635.2255 *T IF and CID revenues are Ne t Present Valued at 7 .5% and ba sed on reimbursement of Developer on an as-co llected basis . Also , allocation of so urces of funds between Central Bank and FHC/Deve loper are based on preliminary estimate s and may not reflect the ultimate level of funding provided by each enti ty. Co ll ective ly, however , th e Developer anticipates that these so urces will be suffic ient to complete the Project. 42411005 .12 I I EX HIBIT J COST BENE FIT ANALYSIS, EC ONOMIC IMPA CT ANALYSIS AND FISCAL IMPA CT ANALYSIS INCREASE D TAX REVENU E VERSUS TH E VALUE OF TI-l E INCENTIVES PROV ID ED (BY A FFEC TED TA XING JURISD ICT ION): This spreadshee t depi cts (on the left ) the total incentives provid ed by affec ted taxi ng jurisd ic tions, and it is compared to the potential inc rease d tax revenue to those juri sdiction , fro m all source s and ne t o f TIF redirected reve nu e, fr om the Redeve lopment Projec t (on th e right) over a 27 yea r period . Please note tha t thi s ana lysis doe s not inclu de the bene fit to the State of Mi sso uri from th e Projec t, and it is intended to add ress the City's internal po li cy th at ask s for a co mparison of pote ntial increased reve nu e, fro m all so urces, to the value of the incent ives prov ided. It inclu des onl y revenue from the Redevelopme nt Area, and doe s not in c lude additiona l reve nu e fro m sp in-off developmen ts. ., " -968 126-'08 <21.6" 1 .'71 23.0>1 !.12> UP.> 667 "'·"' "I ·61.1 16 llo<,4>9 >1; I I >; ... ·"' "·"' ....... • '" ,,. '·'"' "'' .. ., ... ., ,.,,,. .. , .... ~, 1.119 19 . • . . 2>9.' .. • "'''" ""·"'' "·'" ·~" '· 391.>11 48<.1799.' I ,., I I I .... .,.., I 6.996 ·'·"' "'·'" ><J.~ ""' I I I ,\120 D.%67> I I '·'" '''·""' "''.106 " ,. I 166,408 I 119 8.' " I . ....... I l.m "'·''"' ,,..,1136 " I , 1 ..... , I I . 1.9~ 2l "''I" "'"" ..... 10 6 .114 '·""' .,....._., I ,.. "· ,. """"' U9.01W "·"8 ,,16) '" '"'·"' 1,09 " I I '10l,700 J-1 EXH IBIT J PARCEL AND TAX DATA ASSUMPT IONS: The below in fo rmation sets fort h the a~sumpt i ons re la ted to the valu ati on o f Cap ita l Mall and economic ac tivi ty (i.e., sale s) wit hin the Redevelopme nt Area, in cluding the effect o f the Redevel opm ent Projec t on the assesse d va lu e of the improvements and sales at the busin esses located wi thin the Red eve lopment Area. The se ass umptio ns al so incl ud e the ta x rates, by jurisdiction , and various valuation assump tio ns over the life of the Redev elo pment Project fo r purpo ses of calc ul ating va ri ous components of the cost/be nefit and tax impa ct analysis. 4 2411005 12 ' ·~ " -~ .. .., ... ,....,..,-.;>_ J' ... -,.,..,,...,. • .,.oot total'o ., ........ ~ ....... ,,,..,..~' .,..,,.,l<>o•""'-'"'ur'·"""' (o• •-" _, .. , ,... ...... ,_ot,l •l<>oto_...., 'llll•..,aiDo••u,......, 1•• ,; .......................... !!._ .... . JIOo• ....... ,.._., .... , .. , ...... .._ :;:~!.::;~::: .. ":'.:.":~:""'' ... 01 J::.' ~)•...,.,w,., .. "''-or•J·~lloo·~"'' a...<'••l U .-.~~ ...... ~ ........ ~ ... ._ .. ,,...... )10 ,tl ...... -......... , .......... _ •.I~ ....• , .... _ .................. ~ ... ,. .... ~ ....... ~ ........ ~,. ... , •• _, (ll ~•",..J'•~ ''""'""-"''""'·UI'I"'""'' Jl>. J-2 EXH IBIT J ECONO MIC IMPACT: REAL PROPERTY VALUES AND ECONOM IC ACTIV ITY WIT HIN REDEVELOPMENT AREA T he chart below sets forth the projected econo m ic impact of the Project on propert y values and sales in t he Redevelo pment Area with and wit hout the Redeve lopme nt Project. J-3 4241 1005 12 I I EXHIBIT J ECONOM IC IM PAC T: PERSONAL PR OPERTY VALUE AN D AS SESSE D VALUE (OVE R 27 YEAR S): Th e chart bel ow sets for th e proj ect ed marke t va lue (l eft side ) and assessed va lu e (ri ght s id e) of all perso nal property wit hin the Redeve lopme nt Area over a per iod of 27 ye ars . Please no te three items: (I) the "Base " co lumn dep icts the growth in persona l property taxes ass um ing curren t gro v.1h, (2 ) the .. Add Year (2 )'" thru th e "A dd (Year 5)" co lum ns show the effect of decrease d vac an cy and build-ou t o f the curren tl y vacant pad-site s in the Redev elopm ent Area, an d (3) the va lues wit hin the ·Total w/out Project'" co lum n are based on separate assu mp tion s id ent ifi ed above (i.e., lon ge r rep laceme nt ti me pe ri od and lower rep lacement rate). J-4 4241100512 EXHIBIT J FISCAL IMPACT: AD VALOREM TAXES RE DIR ECTE D BY T IF (BY AFFECTED TAX J URI SDI CTION) The chart be low sets fo rth th e ad va lo rem/rea l estate taxes red irec t by TJF by each tax j uri sdi cti on affec ted, in c lud ing th e annu al total for a ll tax in g j uri sd ic ti ons, over the 23-year T IF term . h ·ar (;l'lll'mlf{l'\l'IIUl' Sdmul l{u:ul &. B tidgl' Libml) SJll'l'ial Sl'" in·~ ( it~ H>l \1. I $ 4 86 $ 16 ,320 $ 1,198 $ 88 1 $ 396 $ 2,468 $ 21 ,750 2 $ 83 4 $ 27 ,973 $ 2,054 $ 1,509 $ 679 $ 4,23 1 $ 3 7,281 3 $ 1,188 $ 39,860 $ 2,927 $ 2,15 1 $ 968 $ 6,028 $ 53,122 4 $ 1,549 $ 51 ,984 $ 3,817 $ 2,805 $ 1,262 $ 7,862 $ 69,280 5 $ 1,9 18 $ 64 ,350 $ 4.725 $ 3,472 $ 1,563 $ 9,732 $ 85,761 6 $ 2 ,145 $ 71,960 $ 5.284 $ 3,883 $ 1,748 $ 10,883 $ 95,902 7 $ 2 ,376 $ 79 ,72 1 $ 5,854 $ 4,302 $ 1,936 $ 12,057 $ 106,246 8 $ 2 ,6 12 $ 87 ,638 $ 6,435 $ 4.729 $ 2,128 $ 13,254 $ 11 6,797 9 $ 2,853 $ 95,7 13 $ 7.028 $ 5,164 $ 2 ,325 $ 14.475 $ 12 7,559 10 $ 3,098 $ 103 ,950 $ 7,633 $ 5.609 $ 2.525 $ 15,72 1 $ 138,536 II $ 3,349 $ 11 2,35 1 $ 8,250 $ 6,062 $ 2,729 $ 16,992 $ 149,732 12 $ 3,604 $ 120,92 1 $ 8,879 $ 6,525 $ 2,937 $ 18,288 $ 161 ,153 13 $ 3,865 $ 129,66 1 $ 9,52 1 $ 6,996 $ 3,149 $ 19,6 10 $ 172 ,802 14 $ 4 ,13 1 $ 138 ,577 $ 10,176 $ 7 ,477 $ 3,365 $ 20,958 $ 184,684 15 $ 4,402 $ 14 7,67 1 $ 10,843 $ 7 ,968 $ 3,586 $ 22 ,333 $ 196,804 16 $ 4,678 $ 156,947 $ 11 ,525 $ 8,468 $ 3,8 12 $ 23,736 $ 209,166 17 $ 4,960 $ 166,408 $ 12,2 19 $ 8,979 $ 4,04 1 $ 25 ,167 $ 221 ,77 5 18 $ 5,248 $ 176 ,059 $ 12,928 $ 9 ,500 $ 4 ,276 $ 26.627 $ 234,636 19 $ 5,54 1 $ 185 ,902 $ 13 ,65 I $ 10.03 1 $ 4 ,515 $ 28 ,11 5 $ 247,755 20 $ 5,840 $ 195 ,942 $ 14.388 $ 10,572 $ 4 ,759 $ 29,634 $ 26 1,136 21 $ 6,146 $ 206,184 $ 15,140 $ 11.1 25 $ 5.007 $ 31,183 $ 274,784 22 $ 6,457 $ 2 16.630 $ 15.907 $ 11,689 $ 5,26 1 $ 32,763 $ 288,706 23 $ 6,775 $ 227,285 $ 16 ,689 $ 12 ,264 $ 5,520 $ 34.374 $ 302,906 T OTAL $ 84,056 $ 2,8 20,00 7 $ 207 ,07 1 $ 152,159 $ 68,487 $ 426,49 1 $3,758,2 70 N PV $ 30,499 $ 1,023,203 $ 75,133 $ 55,209 $ 24 ,850 $ 154,747 $1,363,640 J-5 42411005 12 EXHIBIT J FISCAL IMP ACT: ECONOM IC ACT IVITY TAXES (I.E ., SALES TAX) REDIRE CTED BY TIF (BY AFFECTED TAX ING JURISDICTION) The chart below sets forth the Ci ty and Count y sale s tax revenues that a re redirected by TIF over the 23-year TIF term. \'car Ci~· Coun~· em TOTAL 1 $ 34,966 $ 26,224 $ 378,9 14 $ 440,105 2 $ 77,510 $ 58,132 $ 400,18 6 $ 535,829 3 $ 120,479 $ 90,360 $ 421 ,671 $ 632,510 4 $ 163 ,879 $ 122,909 $ 443 ,37 1 $ 730,159 5 $ 207,712 $ 155 ,784 $ 465,287 $ 828,783 6 $ 2 17,018 $ 162,763 $ 469,940 $ 849,721 7 $ 226,4 16 $ 169 ,812 $ 474 ,6 40 $ 870,869 8 $ 235,909 $ 17 6 ,932 $ 479,386 $ 892,227 9 $ 245,497 $ 184 ,123 $ 484 ,180 $ 913,800 10 $ 255,18 1 $ 19 1,3 85 $ 489,022 $ 935,588 11 $ 264,96 1 $ 198 ,72 1 $ 493 ,9 12 $ 957,594 12 $ 274 ,839 $ 206,129 $ 498 ,851 $ 979,820 13 $ 284 ,816 $ 2 13,6 12 $ 503,840 $ 1,002,268 14 $ 294 ,893 $ 22 1,170 $ 508,878 $ 1,024,941 15 $ 3 05 ,071 $ 228,803 $ 5 13,967 $ 1,047,840 16 $ 315 ,3 50 $ 236 ,512 $ 5 19 ,106 $ 1,070,969 17 $ 325,732 $ 244,299 $ 524,297 $ 1,094,329 18 $ 336,218 $ 252 ,164 $ 529,540 $ 1,117,922 19 $ 346,809 $ 26 0 , I 07 $ 534,836 $ 1,141 ,751 20 $ 357,506 $ 268,129 $ 540,184 $ 1,165,819 21 $ 368,309 $ 276,232 $ 545,586 $ 1,190,127 22 $ 379,221 $ 284,41 6 $ 55 1,042 $ 1,214,679 23 $ 390,242 $ 292 ,681 $ 556,552 $ 1,239,476 TOTAL $ 6,028,534 $ 4 ,521,400 $ 11,327,190 $ 21,877,124 NPV $ 2,371,320 $ 1,77 8,490 $ 5,091,53 7 $ 9,241,347 J-6 42411005 .12 EXHIBIT J COST/BENEF IT ANALYS IS: Th is chart show s ne t taxes (afte r TI F) by tax type with th e Redeve lopme nt Project and taxe s withou t the Redevelopment Project ove r a 27 yea r period . The far right co lu mn shows the net benefi t (in terms of net tax revenue to all taxing juri sd ictions) from the Red eve lopment Proj ect after TI F assistance (i.e .. cost). In oth er words. th is chart shows the taxes ge nera ted wit h the Project/with TIF a fter reducin g th ose reve nu es by th e amount redirected by TIF and co mpares th at re ven ue to the projected tax revenue from the Redevelopment Area wi thout the Project/wit hout TIF . The net benefit (i.e .. ad diti onal tax revenue) is approximate ly $73 Million in real te rm s and approxi mately $23 Milli on in pre se nt va lue te rm s. J-7 42411 005 12 EXHIBIT J COS T/BENE FIT ANALYSIS: TAXES (REAL AND PRES EN T VALUE ) BY JURISDI CT IO N AND TAX TYP E The charts below provid es a more individualized breakdown of the chart above. And it shows the net ben efit (after TIF) from the Redevelopment Project by taxing jurisdiction and by source of Tax Revenue over th e same 27-year period . The final chart provides the Red e velopment Proj ect 's total bene fit (in term s of additional tax revenue) to each tax ing jurisdiction. l!t·all'mpt•J1\ '\I'\ I a"'"'ith Ill '\I'\ In \l'' mthuut '\I'\ Br ndit ul lutal ln\l'' mth Ill I utnl In"'' lutal Bt·m·fit 'Ill ('II I'I11Jl'l f) Ill mtlwut Ill trum Ill I Sta te $ 44 757 $ 32 270 $ 12 487 $ 115 362 $ 74 602 $ 40 759 2 General Reve noc $ 194 ,5 19 $ 162 ,241 $ 32 ,279 $ 495,930 $ 375 ,067 $ 120,863 3 Sclx>ol $ 4,178 ,622 $ 3,750,583 $ 428,039 $ 10,587,735 $ 8 ,670 ,563 $ 1,917 ,172 4 Road and Brid ge $ 342,573 $ 301 ,17 1 $ 4 1,40 1 $ 869,569 $ 696,245 $ 173 ,324 5 Library $ 207,357 $ 189,3 14 $ 18,044 $ 52 4,607 $ 437,653 $ 86,954 6 Specal Services $ 110,369 $ 97,494 $ 12,875 $ 280,040 $ 225,386 $ 54 ,653 7 City $ 732 ,15 5 $ 63 9,467 $ 92,687 $ I ,8 59,505 $ 1,478 ,315 $ 38 1,190 8 Add'! S urtax $ 21 ,20 1 $ 15,286 $ 5,9 15 $ 54,645 $ 35 ,338 $ 19,307 TOTALAVTAX $ 5,83 1,553 $ 5,187,82 7 $ 643,726 $ 14,787,391 $ 11 ,993,1 70 $ 2,7 94 ,22 1 :\I'\ lnu' 111thuut '\I'\ Ht• ndit uf I utnl I""'' lutal Bt•ndit l'~"un.1ll'n•p•·•1~ '\I'\ I a"'' 11ith Ill Ill '\ I' Ill I uta I lau' 11ith Ill \\llhuut Ill tnun Ill '( " 111Jl'lf) I State $ 14 556 $ 8 430 $ ' 6 12 5 $ 35 I 2 $ 16 33 7 $ 18 804 2 Gereral Revent~: $ 73,180 $ 42,384 $ 30,796 $ 176,676 $ 82 ,135 $ 94 ,540 3 Sclx>ol $ 1,691 ,74 1 $ 979,818 $ 7 11 ,923 $ 4 ,08 4,286 $ I ,898 , 758 $ 2,185 ,528 4 Road and Bridge $ 135 ,847 $ 78,679 $ 57,167 $ 327,968 $ 152 ,470 $ 17 5,498 5 Lib rary $ 85,392 $ 49,457 $ 35,935 $ 206,15 7 $ 95,84 1 $ 110,316 6 Specal Services $ 43,976 $ 25 ,47 0 $ 18,506 $ 106,169 $ 49 ,357 $ 56,812 7 City $ 288 ,439 $ I 67,057 $ 121 ,382 $ 696,363 $ 323,735 $ 372 ,628 8 Add '! Surtax $ 6,89 5 $ 3,993 $ 2,902 $ 16,646 $ 7,739 $ 8,9 07 TOTAL PPTAX $ 2,340,026 $ 1,355,289 $ 984,736 $ 5,649,40 7 $ 2,626,372 $ 3,023,034 '\I'\ In \l'' 111thuut '\I'\ Bt• ndit uf lutal I au' 11ith Ill I uta! ln\l'' lutal Bt·m·fit ~ail'' I :1\ '\I'\ I :nt'' 11ith Ill 'Ill ('\u l'rul"l'fl Ill \\lthuut Ill hum Ill I State $ 46 080 984 $ 32 043 797 $ 14037187 $ I I 5 00 I 236 $ 72 582 806 $ 42 4 I 8 43 0 2 City $ I 9,442 ,163 $ 15 ,168,66 1 $ 4,273 ,502 $ 48 ,409,92 1 $ 34 ,358 ,725 $ 14 ,05 1,196 3 County $ 14,581 ,622 $ 11,376,496 $ 3,205 ,127 $ 36,307,44 1 $ 25 ,769,044 $ 10 ,538,397 4 CID $ 5,815 ,204 $ . $ 5,815 ,204 $ 15 ,892,038 $ -$ 15 ,892 ,038 TOTALSALESTAX $ 85,919 ,974 $ 58,588,954 $ 27,331,020 $ 215,6 10,636 $ 132 ,710,575 $ 82,900 ,061 J-8 42411 005 .12 EX HIBIT J ECONOM IC IMPACT: AD VALOREM TAXE S GENERATED FROM REDEVELOPMENT PROJE CT OYER 27 YEAR S-LESS TAXES REDIRE CTED BY TIF A juri sdic tion-by-jurisdiction breakdown of the ad valorem/real propert y taxe s generated within the Redev e lopment Area over 27 years from the Redevelopment Project. I s 3,09 9 s 15,094 s 34 3 ,855 $ 27,724 s 17,30 0 s 8 ,966 s 58 ,94 1 s 1,468 s 4 76 ,44 7 2 s 3,20 8 s 15,293 s 344 ,828 s 2 7 ,882 s 17 ,30 8 s 9,0 1 1 s 59,331 s 1,5 19 s 4 78,380 3 $ 3,31 8 s 15,495 s 34 5,81 9 s 2 8 .04 3 s 17 ,31 7 $ 9,057 s 59,729 s 1.572 s 480,352 4 s 3,43 1 s 15,702 s 34 6 ,83 1 s 28,20 8 s 17,326 s 9,104 s 6 0,135 s 1,625 s 482,3 63 5 $ 3,54 7 s 15,91 3 s 347,863 $ 28,375 s 17 ,335 s 9,152 $ 6 0.549 s 1,6 80 s 4 8 4 ,41 5 6 $ 3,618 s 16 ,043 s 348,4 9 8 s 28,4 79 $ 17,34 0 s 9,18 2 $ 60,804 s 1,7 14 s 485,6 77 7 $ 3,690 s 16 ,175 $ 349 ,14 5 $ 28 ,5 84 s 17,3 46 s 9 ,2 12 $ 6 1,0 64 $ 1,748 s 486,965 8 $ 3,764 s 16,311 s 349 ,806 s 28 ,69 1 $ 17 ,352 $ 9,2 43 $ 6 1,3 29 s 1,7 83 s 4 88,27 8 9 $ 3,839 s 16 ,448 s 350 ,4 7 9 s 2 8 ,80 1 s 17 ,35 8 s 9.274 $ 6 1,6 00 s 1,819 s 489,618 10 $ 3,9 16 s 16 ,5 89 s 35 1,16 7 $ 2 8,9 13 s 17 ,364 s 9,306 $ 6 1,8 75 s 1,8 55 s 4 90,9 84 II s 3,994 s 16.73 2 s 35 1,86 8 $ 2 9 ,027 $ 17 ,370 s 9,339 s 62 ,157 s 1,8 92 s 4 92,378 12 $ 4 ,074 s 16 ,878 s 352 ,58 3 $ 29,14 3 s 17 ,3 76 s 9,372 $ 62,444 s 1,9 30 s 4 93,799 13 s 4 ,156 s 17.0 27 s 353 ,3 12 s 2 9 ,262 s 17,382 s 9,4 0 6 s 62.736 s 1,968 s 4 95,24 9 14 s 4 ,239 s 17,180 s 354 ,0 56 $ 29,3 8 3 s 17 ,3 89 s 9 ,4 4 0 s 63 ,035 s 2 ,008 s 4 96,728 15 s 4 ,323 $ 17,335 s 354 ,8 15 s 2 9 ,506 s 17,39 5 s 9 ,475 s 63,339 $ 2 ,048 s 4 9 8 ,237 16 s 4.41 0 s 17,493 s 355,588 $ 29,632 s 17 ,402 s 9 ,5 11 s 63.650 $ 2,089 s 4 99,776 17 s 4 ,4 9 8 s 17,6 54 s 356,378 s 29,760 s 17,409 s 9 ,5 48 $ 63,967 s 2 ,131 s 50 1,34 6 18 s 4 ,588 s 17,81 9 s 357,183 s 29,89 1 $ 17,416 s 9 ,58 6 s 64 ,2 90 s 2,173 s 502,9 47 19 s 4 ,680 s 17,987 s 358,004 s 30,025 s 17,423 $ 9 ,624 s 64,620 s 2.2 17 s 504 ,580 20 s 4,773 s 18,158 s 358,842 s 30,16 1 s 17,43 1 s 9 ,663 s 64 ,956 s 2,261 s 506,2 4 5 2 1 s 4 ,869 s 18,333 s 359,697 s 30,3 00 s 17 ,43 8 s 9 ,7 02 s 6 5,2 99 $ 2,306 s 507,9 44 22 s 4 ,966 s 18,5 11 s 360,568 s 30,442 $ 17 ,446 s 9 ,74 3 s 6 5,649 s 2,352 s 509,677 23 $ 5,066 s 18 ,693 $ 361 ,4 57 s 30,58 7 s 17,4 54 s 9 ,784 s 66,0 05 s 2,4 00 s 5 11 ,44 5 24 $ 5,16 7 $ 25,977 $ 600 ,5 17 s 4 8 ,22 1 $ 3 0 ,3 12 s 15,61 0 s 102.3 8 7 s 2,447 s 830,6 3 8 25 $ 5,270 $ 2 6,496 s 61 2.527 s 4 9 ,18 6 s 30,9 18 s 15,9 22 s 104 ,435 s 2,4 96 s 847.25 1 26 $ 5,376 $ 2 7,0 26 $ 624 ,778 $ 50,170 s 3 1,536 s 16,241 $ 106,523 $ 2,546 s 864,19 6 27 $ 5,483 s 2 7 ,567 s 63 7,2 73 s 5 1,17 3 s 32,167 s 16,5 66 s 108,654 $ 2,597 s 88 1,4 80 TOTAL S 115,362 s 495,930 S I 0,587, 735 s 869,569 s 524,607 s 280,040 s 1,859,505 s 54,645 s 14,787,39 1 NPV s 44,757 s 194,5 19 s 4,178,622 s 342,573 s 207 ,357 s 110,369 s 732,155 s 2 1,201 s 5,831 ,553 J-9 42411005 12 I EXH JB IT J ECONOM IC IMP ACT: AD VALOREM TAXES GENERA TED W/OUT REDEVELOPMENT PROJE CT OVER 27 YEARS Same as above , but the chart be low shows th e res ultin g ad valo rem tax revenu es to eac h taxing jurisdiction if the Redevel opm ent Project is not undertaken . lmll'l'l .... lUIL1- I $ 2,947 $ 14,8 15 $ 342,494 $ 27 ,502 $ 17,288 $ 8,903 $ 58 ,395 $ 1,396 $ 473 ,739 2 $ 2.932 $ 14,74 1 $ 340 ,781 $ 27,365 $ 17,20 1 $ 8,858 $ 58 ,103 $ 1,389 $ 471,370 3 $ 2,917 $ 14 ,668 s 339 ,077 $ 27 ,228 $ 17,115 $ 8,814 $ 57,8 12 $ 1,382 s 469,0 14 4 $ 2,903 $ 14 ,59 4 $ 337,382 $ 27 ,092 $ 17,030 $ 8,770 $ 57,523 $ 1,375 $ 466 ,668 s $ 2,888 $ 14 ,52 1 $ 335 ,695 $ 26 ,956 $ 16,944 $ 8,726 $ 57,235 $ 1,368 $ 464,335 6 $ 2,874 $ 14 ,44 9 $ 334 ,017 $ 26 ,821 $ 16 ,860 $ 8,683 $ 56,949 $ 1,36 1 $ 462,0 13 7 $ 2,860 $ 14 ,376 $ 332 ,346 $ 26 ,687 $ 16 ,775 $ 8,639 $ 56,664 $ 1,355 $ 459,703 8 $ 2.845 $ 14 ,305 $ 330 ,685 $ 26 ,554 $ 16,692 $ 8,596 $ 56,381 $ 1,348 $ 457,405 9 $ 2,831 $ 14,233 $ 329 ,03 I $ 26 ,421 $ 16,608 $ 8,553 $ 56 ,099 $ 1,34 1 $ 455 ,1 18 10 $ 2,817 $ 14 ,162 $ 327 ,386 $ 26 ,289 $ 16,525 $ 8,510 $ 55 ,819 $ 1,33 4 $ 452 ,842 11 $ 2,803 $ 14,091 $ 325 ,749 $ 26 ,158 $ 16,442 $ 8,468 $ 55,540 $ 1,328 $ 450 ,578 12 $ 2,789 $ 14,021 $ 324 ,120 $ 26 ,027 $ 16,360 $ 8,425 $ 55 ,262 $ 1,321 $ 448 ,325 13 $ 2,775 $ 13 ,9 51 $ 322 ,500 $ 25 ,897 $ 16,278 $ 8,383 $ 54 ,986 $ 1,314 $ 446 ,08 4 14 $ 2,761 $ 13,881 $ 320,887 $ 25,767 $ 16,197 $ 8,341 $ 54,7 11 $ 1,308 $ 443,853 IS $ 2,747 $ 13 ,811 $ 3 I 9,283 $ 25 ,638 $ 16,116 $ 8,300 $ 54 ,437 $ 1,30 I $ 44 1,634 16 $ 2.733 $ 13,742 $ 317,68 6 $ 25,510 $ 16,035 $ 8,258 $ 54 ,165 $ 1,295 $ 439 ,426 17 $ 2,720 $ 13 ,674 $ 316,098 $ 25,383 $ 15,955 $ 8,217 $ 53 ,894 $ 1,288 $ 437 ,229 18 $ 2,706 $ 13,605 $ 31 4,518 $ 25 ,256 $ 15 ,876 $ 8,176 $ 53 ,625 $ 1,282 $ 435 ,042 19 $ 2,693 $ 13,537 $ 3 12 ,94 5 $ 25,129 $ 15 ,796 $ 8,135 $ 53 ,357 $ 1,275 $ 432,867 20 $ 2,679 $ 13,470 $ 311 ,38 0 $ 25 ,004 $ 15 ,717 $ 8,094 $ 53 ,090 $ 1,269 $ 430 ,703 21 $ 2,666 $ 13,402 $ 309,823 $ 24,879 $ 15 .639 $ 8,054 $ 52 ,824 $ 1,263 $ 428 ,549 22 $ 2,652 $ 13,335 $ 308,274 $ 24,754 $ 15,560 $ 8,013 $ 52,560 $ 1,256 $ 426 ,407 23 $ 2,639 $ 13,268 $ 306,7 33 $ 24,63 1 $ 15 ,483 $ 7,973 $ 52,297 $ 1,250 $ 424 ,275 24 $ 2,626 $ 13,202 $ 30 5,199 $ 24,507 $ 15,405 $ 7,933 $ 52,036 $ 1,244 $ 422 ,153 25 $ 2,613 $ 13,136 $ 303 ,673 s 24,385 $ 15,328 $ 7,894 $ 51,776 $ I ,238 $ 420 ,042 26 $ 2,600 $ 13,070 $ 302 ,155 $ 24,263 $ 15,25 1 $ 7,854 $ 51,517 $ 1,231 $ 41 7,942 27 $ 2,587 $ 13 ,005 $ 300 ,644 $ 24 ,142 $ 15.175 $ 7,815 $ 51,259 $ 1,225 $ 415,853 TOTAL$ 74,602 $ 375,067 $ 8,670,563 s 696,245 $ 43 7,653 $ 225,386 s 1,478,315 $ 35,338 $ 11 ,993,170 NPV s 32 ,270 $ 162,241 $ 3,750,583 $ 30t ,171 s 189,314 $ 97,494 $ 639,467 s 15,286 $ 5,187,827 J-10 4 24 11 005,12 I EXHIBIT J ECONOM IC 1M PACT : PERSONAL PROPERTY TAXES GENE RATE D FROM RE DEV ELO PMENT PROJEC T OVER 27 YEARS -LESS TAXES REDIRECTED BY TIF A juri sd iction -by-ju ri sdictio n breakdown of the perso nal pro perty taxes ge nerated wit hi n the Redeve lop ment Area over 27 years from the Red evelopment Project. I $ 1,634 $ 8,214 $ 189,876 s 15,247 s 9,584 s 4,936 $ 32 ,373 s 774 $ 262 ,6 37 2 $ 1,476 $ 7,420 $ 171 ,536 $ 13,774 s 8,658 $ 4,459 s 29 ,246 $ 699 $ 237 ,269 3 $ 1,307 $ 6,573 $ 15 1,94 0 $ 12 ,201 $ 7,669 $ 3,95 0 $ 25 ,906 $ 619 $ 210 ,165 4 $ 1,128 s 5,67 1 $ 13 1,090 $ 10 ,527 s 6,617 $ 3,408 $ 22,35 1 $ 534 $ 181 ,325 s $ 938 $ 4,71 4 s 108,985 $ 8,751 $ 5,501 $ 2,833 $ 18,582 $ 444 $ 150 ,748 6 $ 66 1 s 3,324 $ 76,840 $ 6,170 $ 3 ,879 $ 1,997 $ 13,101 $ 313 $ 106,285 7 $ 385 s 1,9 33 s 44 ,695 $ 3,5 89 $ 2 ,256 $ 1,162 $ 7,620 s 182 $ 6 1,822 8 $ 1,905 s 9,578 $ 221 ,413 $ 17,779 $ 11 ,176 $ 5,756 $ 37,75 1 $ 902 s 306,260 9 $ 1,688 $ 8,488 s 196,2 19 $ 15 ,756 $ 9 ,904 $ 5,10 1 $ 33,455 $ 800 $ 271 ,411 10 $ 1,470 $ 7,393 $ 170,899 $ 13,723 $ 8 ,626 $ 4,442 $ 29,138 $ 697 s 23 6 ,389 II $ I ,252 $ 6,292 $ 145 ,454 $ 11 ,680 $ 7 ,3 42 $ 3,78 1 $ 24,800 $ 593 s 201 ,193 12 $ 1,031 $ 5,186 $ 11 9 ,883 $ 9,627 $ 6 ,05 1 $ 3,116 $ 20 ,440 $ 489 $ 165 ,823 13 $ 727 $ 3,6 56 $ 84 ,524 $ 6,787 s 4 ,266 $ 2,197 s 14 ,41 I $ 344 $ 116 ,9 14 14 $ 423 $ 2,127 $ 49,164 $ 3,948 $ 2 ,482 $ 1,278 $ 8,382 $ 200 $ 68 ,004 IS $ 2,096 $ 10,536 $ 243 ,554 $ 19,557 s 12 ,294 $ 6,33 1 s 4 1,526 $ 993 $ 33 6,886 16 $ 1,857 $ 9,337 $ 2 15,841 $ 17,332 $ 10,895 $ 5,6 11 $ 36,800 $ 880 $ 298,552 17 s 1,61 7 $ 8,132 $ 187 ,98 9 $ 15,09 6 s 9 ,489 s 4,887 s 32 ,052 $ 766 $ 260 ,028 18 s 1,377 $ 6,92 1 $ 159 ,999 $ 12,848 s 8 ,076 $ 4,159 $ 27 ,280 $ 652 s 22 1,3 12 19 s 1,135 $ 5,704 $ 131 ,872 $ 10,58 9 s 6 ,656 $ 3,428 $ 22 ,484 $ 537 $ 182,406 20 s 800 $ 4 ,022 $ 92,976 $ 7,466 $ 4 ,693 $ 2,41 7 $ 15,852 $ 379 $ 128,605 21 $ 465 $ 2,339 $ 54,08 1 $ 4,343 s 2.730 $ 1,406 $ 9,22 1 $ 22 0 $ 74,805 22 $ 2 ,305 $ 11,589 $ 267,9 10 $ 21 ,513 $ 13 ,523 $ 6,964 $ 45 ,678 $ 1,092 $ 370 ,574 23 s 2 ,04 3 $ 10,27 0 $ 237,425 $ 19,065 $ 11,984 $ 6,172 $ 40,481 $ 968 $ 328,407 24 $ 1,779 $ 8,945 $ 206 ,788 $ 16,605 $ 10 ,438 $ 5,375 $ 35 ,257 $ 843 $ 286 ,030 2S $ 1,5 14 $ 7,6 13 $ 175,999 $ 14,133 $ 8 ,884 $ 4,575 $ 30,008 s 7 17 $ 243,443 26 $ 1,248 $ 6,275 $ 145 ,059 $ 11 ,64 8 $ 7,322 s 3,771 $ 24 ,732 $ 59 1 $ 200,6 46 27 $ 880 $ 4 ,424 $ 102 ,274 $ 8,213 $ 5,162 $ 2,6 59 $ 17,438 $ 41 7 $ 14 1,466 TOTAl S 3S,I 42 s 176,676 s 4,084 ,286 s 32 7,968 s 206,157 $ 106,169 s 696,363 s 16,646 s S,649,407 NPV s 14 .~56 s 73,180 $ 1,69 1,741 $ 13S,847 s 8 S,392 $ 43,976 s 288,439 $ 6,895 s 2,340,02 6 J-11 4241100 ) 12 EXH IBIT J ECONO MIC IMPA CT: PERSONAL PROPERTY TAXES GENERATED W/OU T REDEV ELOPMENT PROJ ECT OVER 27 YEARS Same as above, but the chart be low shows th e re sultin g person al property ta x revenues to each taxin g jurisdi ct io n if the Redevelop men t Proj ect is no t und ertaken . I $ 1,63 4 $ 8,2 14 $ 189,876 $ 15,247 s 9,584 $ 4,936 s 32 ,373 s 774 s 262,637 2 $ 1,4 00 $ 7,040 s 162,75 1 $ 13,069 $ 8,215 s 4,231 $ 27,749 $ 663 $ 225 ,11 8 3 $ 1,167 $ 5,867 s 135,626 $ 10,891 $ 6,846 s 3,526 $ 23 ,124 $ 553 s 187,598 4 $ 93 4 $ 4,693 $ 108,500 $ 8,7 13 s 5,477 s 2.820 $ 18,499 $ 442 $ 150,078 5 $ 700 $ 3,520 s 81,375 $ 6,534 $ 4,107 s 2,11 5 $ 13 ,874 $ 332 s I 12 ,559 6 $ 467 $ 2,347 s 54 ,250 $ 4,356 $ 2,738 s 1,4 10 $ 9,25 0 $ 22 1 $ 75,039 7 $ 233 $ 1,173 s 27 ,125 $ 2,178 s 1,369 s 705 $ 4,625 $ Il l $ 37 ,520 8 $ 233 $ 1,173 $ 27 ,125 $ 2,178 $ 1,369 $ 705 $ 4,625 $ Il l s 37 ,520 9 $ 233 $ 1,17 3 s 27 ,125 $ 2,178 $ 1,369 $ 705 $ 4,62 5 $ Ill s 37 ,520 10 $ 233 $ 1,173 s 27 ,125 $ 2,178 $ 1,369 $ 705 $ 4,625 $ Ill $ 37,520 II $ 1,225 $ 6,160 s 142 ,407 $ 11 ,435 $ 7,188 $ 3,702 $ 24 ,280 $ 580 $ 196 ,978 12 $ 1,050 $ 5,280 $ 122 ,063 s 9,802 s 6,161 $ 3,173 $ 20.8 12 $ 497 $ 168 ,838 13 $ 875 $ 4,400 $ 101 ,719 $ 8,168 $ 5.134 $ 2,644 $ 17,343 $ 415 s 140 ,699 14 $ 700 $ 3,520 s 81 ,375 $ 6,534 $ 4,107 s 2,11 5 $ 13 ,874 $ 332 s 112 ,559 15 $ 525 $ 2,640 $ 61,032 $ 4,901 $ 3,08 1 $ 1,586 $ 10,406 $ 249 $ 84 ,41 9 16 $ 350 $ 1,760 s 40,688 s 3,2 67 $ 2,054 $ 1,058 $ 6 ,937 $ 166 $ 56,279 .17 $ 175 $ 880 s 20 ,344 s 1,63 4 $ 1,027 $ 529 $ 3,469 $ 83 s 28,14 0 18 $ 175 $ 880 $ 20 ,344 $ 1,634 $ 1,027 $ 529 $ 3,469 $ 83 s 28,140 19 $ 175 $ 880 s 20,344 $ 1,63 4 $ 1.027 $ 529 $ 3,4 69 $ 83 s 28 ,140 20 $ 175 $ 880 $ 20,344 s 1,63 4 $ 1,027 s 529 $ 3,469 $ 83 s 28 ,140 21 $ 9 19 $ 4,620 s 106 ,80 5 $ 8,576 $ 5,3 91 s 2,776 $ 18,2 10 $ 435 $ 147 ,733 22 $ 788 $ 3,96 0 $ 91.547 $ 7,35 1 $ 4,62 1 $ 2,380 $ 15,609 $ 373 s 126,629 23 $ 656 $ 3,300 $ 76,289 s 6,126 s 3,85 1 $ 1,983 $ 13,007 s 3 11 s I 05 ,524 24 $ 525 $ 2.640 $ 61,032 $ 4,901 $ 3,081 s 1,586 $ 10,406 $ 24 9 $ 84,4 19 25 $ 394 $ 1,98 0 s 45 ,774 s 3,676 $ 2,310 $ 1,190 $ 7,804 $ 187 s 63 ,3 14 26 s 26 3 $ 1,320 $ 30,5 16 $ 2,450 s 1,540 $ 793 $ 5,203 $ 124 $ 42 ,210 27 $ 131 $ 660 $ 15,258 $ 1,225 s 770 $ 397 $ 2,60 1 $ 62 s 21 ,105 TOTA s 16 ,337 $ 82,135 s 1,898,7 58 s 152,470 s 95,84 1 s 49 ,357 s 323,735 s 7,7 39 s 2,626,372 NPV s 8,430 s 42,384 s 979,8 18 s 78,6 79 s 49,457 s 25,4 70 s 167 ,057 s 3,993 s 1,355,289 J -12 42411005.12 EX HIBI T J ECONOMIC IMPA CT: SA LES TAXES GENERATE D FROM AND W/OUT REDEVELOPME NT PROJ ECT (BY JURI SD ICTIO N) OVER 27 YEARS -LESS AMOUNTS REDIRECTED BY TIF. J-13 4 24 11 00~.1 2 -~~--------- EXHIBITK DEVELOPER AFFIDAVIT See Attached for Deve loper Affidavit. K-1 424 11005 .12 STATE OF MISSOURI COUNTY OF COLE ) ) ss ) AFFIDAVIT COMES NOW, Rob Kingsbury, and being first duly sworn, on his oath states : I. 1 am over the age of eighteen ( 18) and competent to testify to the following matters of my own knowledge and belief and am duly authorized to testify on behalf of Capital Mall JC, LLC, a Missouri limited liability company. ~ 2 . I am the ~~ cF r"H£ ~and am providing this Affidavit on behalf of Capital Mall JC, LLC. 3. Capital Mall JC, LLC is the proposed developer for the Capital Mall Tax Increment Financing Plan (the "TIF Plan") relating to the proposed Redevelopment Area, which contains approximately 78 .26 acres , is generally located in Jefferson City, Missouri , at the northeast comer of Highway 50 & S. Country Club Dr./W . Truman Blvd, and commonly known as Capital Mall. 4. The conditions, which evidence the Redevelopment Area (as legally described in the TIF Plan) as a blighted area, are detailed in the TlF Plan . 5. In my opinion, the Redevelopment Area on a whole is a "blighted area" as that tenn is defined in the TIF Plan , and has not been subject to growth and development through investment by private enterprise. 6. The Redevelopment Area would not reasonably be anticipated to be developed without the adoption of tax increment financing due to the substantial cost to ameliorate the blighted condition of the Redevelopment Area. 7. Capital Mall JC, LLC will not and could not reasonably be expected to develop the Redevelopment Area without the adoption of the proposed TIF Plan . 8. To my knowledge the TIF Plan meets the requirements of Section 99.810 of the Real Property Tax Increment Allocation Redevelopment Act, Revised Statutes of Missouri. By:~ Subscrirt? to before me , a Notary Public , in and for said County and State this 5 ~ day of , 2013 . My Commission Expiresill.i)1 t a :7.02.0 I sPrinted Na SEAL " ' ~59 1 6703.1 JEAN MACKNEY Notary Public-Notary Seel STATE OF MISSOURI County of Cole My Commission Expires 11/27/2015 Commission# 11500009 EXHIBIT L DEVELOPMENT TEAM Capital Mall JC. LLC (affiliate o(Farmer Holding Company): Developer/Ow ner Farme r Holding Compa ny is a privately he ld , vertical ly inte grate d constructi on materials and real estate company he adqu arte red in Jefferson Cit y, MO. Founded in 1972, the company has 750 emp loyees. Over it s 41 year hi story in real estate investment in Jefferson City, Farmer Holdin g Company has invested or developed 1.75 million SF of office, indu strial , retail and re sidenti a l space. Assisting Cap ital Mall JC, LLC with this redevel opment will be Kirk Farmer and Rob Kingsbury . Experience includ es: • Office /Indu strial : Nu merous office/indu strial locat ions, ranging from Jefferson City, Missouri to Springfield , Illin ois and including (a) 221 Bolivar Street. Class A Office Building and (b) Mis so uri State Record s, Missouri State Office Building • Stone Ridge Village : 2 13 acre retail and dining destination located on Missouri Boulevard in Jefferson City (currently at Phase II of four-phase development). • Boulevard Shoppe s : An 8, I 00 square foot retail center along Missouri Boulevard m Jefferson Cit y, Missouri. • Boulevard Ce nt er: An II ,52 0 square foot retail center that is located adjacent to Boulevard Shoppes. • Housing : 7 re side nti al housing projects cons isting of approximately 320 ,000 square feet (325 units) financed through sta te and federal tax credits fo r co mp et itive and nuan ced affordab le housing project s. L-1 42411005 .12 EXHIBITL Central Missouri Professional Services, Inc.("CMPS"): Civil Engin eering CM PS was found ed in 1969 and prov id es e ng ine e rin g, survey in g, geospati a l se rvices, an d mate ri al testing . CM PS has been in volved in th e deve lopm ent of Jeffe rso n Ci ty and th e surroundin g a rea for 41 yea rs and has participated in a maj ori t y of the project s th at hav e been a part of the Jefferson C it y and surroundin g area growth durin g those yea r s. CMP S offe rs GPS and conve nti onal meth ods of surv ey in g with four fully equipped survey crews to mee t it s c li ent 's need s stat ew ide . CM PS offe rs comp lete engineering de s ign and draftin g servi ces, geos pati a l services, and a complete materi a l testing lab o rato ry . Ex perienc e includes: • Walgreens • Best Westem-Capitallnn • Ca ndlew oo d S uit es Extended Stay • Ho lida y In Ex press • Kohl's • Menard s • Dick s Sporting Goo ds • PetS mart • Wildwo od Crossing The CMPS Proj ect Mana ge r for thi s pr oject will be Pa ul Samson , PE. Paul ha s been wi th CMPS for nea rl y I 0 yea rs, and pri or to joining C MP S, Pau l worked in MoDOT Ce ntral District for over 5 years. Paul 's wide range of de s ign experience will be an asse t to the proj ect team . He has worked closely with the Develo pm ent Team o n seve ral re ce nt proj ec t s, in c ludin g: Stone rid ge Village Shopping Ce nter a nd Walgreens, Truman Boulevard. Pa ul also ha s c lose work in g re lati onships w ith city staff and loca l utilit y co mpa ni es. Polsinelli PC ("Polsinelli"): Legal and Compliance The Polsinelli Real Es tate group is stru ctured with a foc us on pro vi din g comprehensive representati on t o it s clients as they nav iga te th e c hallen gi ng waters of rea l es tate t ransact ions whether it inv olves the development or redevelopment of property o r the reutili zat io n of ex ist in g facilities. Ex perience includ es : • Rede ve lopment of The Elm s Hote l a nd Spa , Excelsior Springs, Missouri • C it y Po inte , Webb C it y, Missouri • Valent Aerostructures Manufacturing Fac iliti es, Was hingt on, Mi sso uri • Fre ighth ouse Flats , Co nd ominium Re dev e lopment, Kan sas C ity, Missouri • Co rbin Park, Overland Park, Kansas • Walmart TIF, Olathe Kansas • Bass Pro TIF and TDD , Olathe, Kansas • Santa Fe Plaza C ID , Dodge C it y, Kansas • The Ga tewa y Redevel opm ent , Mi ss ion, Kansas L-2 424110 05 12 EXHIBITL Leadi ng the lega l team from Pol s inelli is Korb W. Maxwell. Economic development projects are the focus of Mr. Maxwell 's practice. Mr. Maxwell 's area of concentration is on large-scale development and employment projects that utilize complex federal , state, and municipal development incentives. His experience in working with municipalities and states in structuring and implementing incentive packages provides him with insight and practical ex perience that help s increase the likelihood of reaching a successful closing. Mr. Maxwell has significant experience with tax increment financing , transportat io n deve lo pment distric ts, community improvement districts, special benefit districts, real and persona l property tax exemptions and numerou s federal and state tax credit program s. L-3 424 11005 .12 Sears JC Penn ey Dillard 's Wil so n 's Total Fitness Claire 's CJ Bank s Woodcrest Buckle Bath & Bo dy Works Zales Jewe le rs Pro Im age Victoria 's Secret Modern Nail s US Po st Office Subway St ir Fry Kay Jew e ler s American Eagle Outfitters Chri stoph er & Banks Radi os hack DEB 4 241 1005 .12 EXHIBITM LIST OF TENANTS /OCCUPANTS Pa y le ss Shoesource Hibb en Sports Jo-A nn Fabrics & Crafts GNC The Shoe Department Kir lin 's Hallmark Pretze l maker Fuji Japan Steakhouse Mastercuts Family Haircutters JC Penney Kitchen Co ll ecti on Jeffe rso n C ity Police Mr. Bulk Treats & Gift s Ca melot Gifts Th e Se nior Ce nter at th e Ma ll Ca pita l Ca nd y Cap ital 8 Theater Ce ntra l Trust Bank Pizza Hut Hard ee 's Restaurant Hy-Vee Wendy's M-1 EXHIBIT N CAPITAL MALL TAX INCREMENT FINANCING PLAN RELOCATION PLAN The Cit y Co unci I of the Cit y of Jefferson, Mi sso ur i adopts thi s Relo ca ti on Plan as an ex hibit to the Ca pital Mall Tax In crement Financing Plan as required-under Sectio n 523.20 5 of th e Revised Statutes of Mi sso uri. Capitalized term s not otherwise defined in this Relo cat ion Plan shall hav e th e meaning se t forth in the Plan . 1. Definitions. The following terms shall have the meanings set forth below for purp oses ofthis Relocati on Plan . 1.1 Business. Any lawful activity that is co nd ucte d: (a) primarily for th e purchase, sale or use of perso na l or real propert y or for the manufacture , process in g or marketing of products or commodities; o r (b) primaril y for th e sa le of se rvices to the public. 1.2 City. The Cit y of Jefferson, Mi sso uri . 1.3 Decent, Safe and Sa n itary Dwelling. A dwelling which me ets applicable hou sin g and occ upanc y codes. The dw elling shall: (a) Be stru cturall y so und, weathertight and in good repa ir ; (b) Contain a safe electrica l wiring syste m ; (c) Contain an adequate heatin g system; (d) Be adequate in s ize with respect to the number of ro oms ne eded to accommodate th e Di splaced Perso n; and (e) For a Handicapped Di splaced Perso n, be free of any barriers which wou ld prec lude rea so nable in gre ss, egress or use of th e dwe llin g. 1.4 Displaced Person. Any Perso n that moves from real property whi ch is within the Red eve lopment Area or moves such Per so n's perso nal property fr om rea l property which is within th e Redev e lop ment Area permanently and vo luntaril y as a dire ct re su lt of acquisition, rehab ilitati on or dem o liti on of, or the written notice of intent to ac quire , such rea l propert y, in whole o r in part, for a public purpose. 1.5 Eligible Displaced Person. Any Di sp laced Person who occ up ied the real property to be acquired for not less than ninety (90) days pri or to the Initiati on of Negotiations and wh o is required to vacate s uch rea l property for any rea so n other th an the expiration of a lea se , ren ewa l of a lease or any ot her contractual requirem ent contained within a lease. N-1 4241 1005 12 EXHIBIT N 1.6 Handicapped Displaced Person. Any Disp laced Perso n who is deaf, lega ll y blind or orth opedi ca ll y di sa bl ed to the extent that ac qui s ition of another re si dence presents a greate r burden than other perso ns wo uld encounter o r to th e extent tha t modifi cat ions to the re pl ace ment re side nce would be necessary . 1. 7 Initiation of Negotiations. The de livery of the initial written offer of just compensat io n by th e acqu irin g entity , to the owner of the rea l property, to purchase suc h real property for a Redeve lopm e nt Project, or th e notice to the Perso n that he wi ll be disp laced by rehabi litation or demo liti on. 1.8 Perso n. Any individual , famil y, partn ers hip , corpo rat io n or assoc iati on. 1.9 Referral Site Notice. The written no tice of referral s ite s to be provided to Displaced Person s by the Developer pursuant to Secti on 4 of th is Relocation Plan . 1.10 Relocation Payment. The pa yment to be mad e by th e De ve loper to an E li g ibl e Displaced Person pur suant to Sec ti on 5 of this Rel ocati on Plan . 2. Eligibility. Any Di spla ced Pe rso n shall have th e right to receive relocation ass istance in accordance with th e terms of this Rel ocati on Plan. In no event shall rel ocation assista nce be provided to any Person who (i) purpose ly res ide s or loca te s s uch Person 's Business in th e Redeve lopment Area so lely for th e purpose of o bta inin g rel ocat ion benefi ts or (i i) JS reloc ated du e to an expiring lease , renewed lease or a co ntractual agreemen t to relocate . 3 . Notice. The Developer shall g iv e to eve ry Di splaced Person a ninety (9 0) day written notice to vaca te, prior to the date such Disp lace d Perso n is required to vacate its pre mi ses. 4 . Referrals. The Devel oper shall provide re s id e ntia l Displaced Persons with three (3) Decent, Safe and San itary Dwelling referra ls and sha ll provide each displaced Business with thre e (3) suitabl e referral s ite s. The Developer sha ll pr ov id e to each Handicapped Displaced Person ninety (90) days prior written not ice o f referral s ite s and shall prov ide to each oth er Di spl ace d Person s ixty (60) days prior wr itt en notice of referr al si tes, determined wit h referenc e to the da te such Displaced Person is required to vacate its respecti ve premi ses . The Deve loper sha ll make arrangements for t ranspo rtati on to in spec t referra l s ite s for Disp laced Pe rso ns up on a written requ est for tran sportat ion made to the Developer in care of Pol sin elli , PC, 700 W. 47 th St. Suite 1000 , Kansas Cit y, Mis so uri 64112 , Attn: Korb W. Maxwe ll. Co ntempo ra ne o us wit h th e provi s ion of a Referral Site Not ice , th e Developer shall notify s uch Di spla ced Perso n in writing of th e ava il ab ilit y of Relocation Payments and as s ista nc e und er th is Relocation P lan. 5. Relocation Payments. Each E li gible Displaced Person shall be entitled to th e fo ll ow in g Re locat ion Pa ymen t from the Developer: 5.1 Residential Displaced Persons. Eac h res id enti a l Eligible Disp laced Person shall be pro vi ded with , at th e op ti on of suc h Eligible Di splaced Person, e ith er: (a) a One Tho usa nd Dollar ($1 000) fixed paymen t ; or (b) actua l reaso nable costs of rel ocation , including ac tual mov in g costs, utility dep os it s, key deposits , storage of N-2 EXHIBIT N personal property up to one (I) month , utility transfer and connection fees a nd oth er initial rehou sing deposi ts, including first and last month 's rent and sec urit y deposit. 5.2 Displaced Businesses. Eac h El igibl e Displaced Person operat in g a Business located in the Redevelopment Area sha ll be provided with , at the option of the Eli gi bl e Displaced Person , either: (a) a T hr ee Thousand Dollar ($3,000) fixed payment ; or (b) actual costs of moving, including costs for packing, crat in g, di sconnecti on , dismantling, rea sse mblin g a nd in sta llin g all perso nal equipment an d costs for relettering simi lar s igns and si mil ar replacemen t stationery , and up to a n addit iona l ten thousand dollars for reestablishment expenses. Reestabli shment expe nses are limited to act ual costs incurred for physical improvements to the rep laceme nt property to accommodate the particular business at issue. 6. S pecial Needs. Any Displaced Perso n who believes that suc h Displaced Perso n has any spec ial needs as th e result of s uch Displaced Person's income , age , size of family, nature of business , availability of su it ab le repla ceme nt facilities and vacancy rates of affordab le facilities ma y advise the Developer of such needs a nd suc h needs shal l be given specific consid erati o n wit h re spect to the re locat ion benefits offered to s uch Displaced Person. To notify the Developer of suc h spec ia l needs , the Di sp laced Person hav in g suc h needs must deliver wr itten notice to th e Developer in care of Polsinelli, PC, 700 W. 47th St. Suit e 1000. Kansas C ity, Missouri 64112 , Attn: Korb W. Maxwell. Suc h notice sha ll iden ti fy th e specia l needs and the basis of the spec ial need. The Deve loper reserves the ri ght to require from any Displaced Person c laimin g spec ial needs , reaso nab le ev id enc e of the alleged facts upon whi ch a claim for special needs is based (by way of exa mpl e, co pi es of income tax return s if income is an issue). 7. Deadline for Claims and Payments. A ll claims for Relocation Payments sha ll be fi led wit h the Developer w ithin s ix (6) months after: (a) for tenants , th e date of di splacement ; or (b) for owners, the date of di splace ment or th e final payment for th e acquisition of the real property , whichever is later. Payment for a sati sfact ory cla im for Relocation Payments shal l be made by the Developer w ithin thi rty (30) days fo ll ow in g the Developer's rece ipt of suffic ien t documentation to s upp ort the claim. 8. Advance Payment. If a n Eli gibl e Displaced Person demon strate s the need for an advance payment of the Relocation Payment in order to avoid or red uce a hards hip , the De ve lope r sha ll issue th e Relocation Payment subje ct to suc h sa fe gua rd s as the Developer may reaso nab ly es tabli sh and are appropriate to e nsur e th at th e objec ti ve of t he Relocation Payment is accom pli shed. 9. Waiver of Payment. An Eli gib le Displaced Perso n, who is a lso the owner of t he app licab le premises, may waive Relocation Payments as part of the negotiations for acq ui sition of th e interest he ld by suc h Eli gible Di sp lace d Perso n. Such waiver s hall be in writin g, shal l disclo se th e E ligible Displaced Perso n 's knowledge of the provision s ofthi s Reloca ti on Plan and Sec ti on 523.205 of the Revised Sta tute s of Missouri and knowledge of ent itlem en t to Relocati on Payments und er thi s Relocation Plan , and sha ll be filed wi th th e Cit y. 10. Amendment. In the event that a court of compe tent jurisd ict ion determines t hat thi s Relocation Plan doe s not sat isfy the minimum re quireme nt s of Sec ti on 523.205 of the N-3 I EXHIBIT N Re vi se d Statute s of Mi sso uri , th en th is Rel ocati on Plan shall be aut omati ca ll y and retroacti vel y amend ed to th e minimum ex tent ne cessary to brin g thi s Re lo ca tion Pl an in co nformit y with th e minimum requirem e nts of Sec ti o n 523.2 0 5 of th e Rev ised Statutes of Mi sso uri . N -4