Thursday, May 24, 2012

Progress Made on Truman Corners

Board approves TIF contract, clears way for condemnation

By Seann McAnally

The Grandview Board of Aldermen and RED Development have finally hammered out the details of the tax increment financing redevelopment plan for Truman Corners. But until the developer can purchase the land, little is likely to happen on the site. That’s why the board has also readied the way for the use of eminent domain, if necessary. 

While the board has already approved the redevelopment proposal, the details of the TIF contract had yet to be finalized. The board on May 16 approved the contract at a special session. 

Attorney Joe Lauber assured the board that multiple protections were built into the contract to limit the city’s liability on bonds if the center does not perform as RED says it will. 

“You have a lot of protection here, but there is always a risk,” Lauber said at a work session May 15. 

Part of those protections are that no bonds will be issued to pay for the project until RED has signed leases for tenants at the redeveloped shopping center. 

But right now, RED does not own Truman Corners. American Resurgens Management, the current owner, has already had a TIF plan revoked by the board for failing to bring tenants to the center. It also submitted a competing proposal to redevelop the center, but the board rejected it, saying in essence that the plan was “too little, too late” after years of inaction.
 
RED is required to negotiate in good faith to purchase the center from its former rival, but it now has a heavy hammer to bring to the negotiating table. The board approved the use of eminent domain that would force a sale if RED is unable to work out an agreement with the current owner. It could be many months before further action is taken on the issue. 

Aaron March, an attorney for RED, has indicated in past meetings that RED’s offer will be based on what American Resurgens Management says the property is worth. But American Resurgens repeatedly protested and appealed any hikes in the assessed value of the property over the past decade - one of the reasons the board revoked the original TIF in the first place.
“That’s contrary to the purpose of a TIF,” Lauber said. 

“Our offer is going to be based on what they’ve  testified under oath that it was worth,” March said, indicating that RED would offer the relatively low amount the owner said it was worth when appealing assessments. 

If RED and American Resurgens cannot come to an agreement on what the center is worth, a board of judges will force the sale and set the price. That process could be lengthy. 

“Chief among the city’s concerns with the redevelopment schedule is the length of time that businesses are inactive due to demolition and reconstruction, as this time frame can have a serious adverse impact on the city’s sales tax revenues,” Lauber said. “A provision was inserted into the TIF agreement to expressly state this concern and make it a requirement that the parties cooperate to minimize such period of inactivity.” 

According to city documents, the   redevelopment should be complete no later than Spring 2015. As yet, RED has no signed tenants at the site, though both attorneys and city elected officials have made vague mentions of “deals in progress.” 

The center would also have a public plaza, statue of President Truman, possible military memorial, and other public amenities.

The development will cost some $91.3 million, with the developer asking the city to back bonds for almost half the development costs.

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