Once Approved by
Aldermen, Projected Completion of Project to be Fall of 2016
By Mary Wilson
Grandview’s Tax Increment Financing Commission held a public
hearing to hear the second amended plan for the proposed Truman’s Marketplace
shopping center, formerly Truman Corners, on Wednesday, February 11. Joe
Lauber, of Lauber Municipal Law, presented the proposed second amendment on
behalf of the City of Grandview. Lauber represents the City as their special
economic development legal counsel, and in that role he also serves as the
legal counsel to the TIF Commission.
The purpose of the hearing was to hear public testimony on
the proposed amendment to the Truman’s Marketplace TIF Redevelopment Plan. The
original version of the plan was recommended for approval by the TIF Commission
on December 14, 2011, and consequently approved by the Board of Aldermen on
February 7, 2012. After the original plan was approved, some difficulties arose
in obtaining the proper financing terms for the project due to the timing of
the necessary acquisition of the shopping center property.
“As a result of that, the developer filed an amendment to
the original plan in August of 2013 to address a solution to that issue,” said
Lauber.
The first amendment to the plan was recommended for approval
by the TIF Commission on September 11, 2013, and approved by the Board of
Aldermen on July 1, 2014. According to Lauber, as the city and developer teams
worked together on the financing of the first amended plan, additional
difficulties with respect to the financing of the project and control of
portions of the redevelopment area came to light.
“For this reason, the developer submitted another proposed
amendment to the redevelopment plan on January 16, 2015,” said Lauber. “TIF
plans are just that: they’re plans. They are made up of projections and
estimates of how the developer and the city hope the development project will
go. Many times, however, when the plan is implemented, the facts related to the
redevelopment project cause a need to change the plans.”
The city’s goal with the project is to remediate blighted
conditions through a comprehensive renovation of a woefully outdated and
underperforming shopping center that serves as a front door to Grandview,
according to Lauber. The city has selected RED Legacy, the developer, to
implement the plan. Lauber stated that the goal has not changed from the
original adopted plan.
“Some of the details of how this is expected to be
accomplished have changed,” said Lauber.
The second amended plan changes are as follows:
• The developer will buy the shopping center using private
sources of funds when bond documents are substantially complete and a bond
parameters ordinance is adopted, prior to bond issuance.
• There will be minimal demolition, the project will consist
primarily of remodeling exisiting structures.
• The total project cost decreased from $87,672,000 to
$75,666,486, or 13.7% less.
• The developer’s portion of financing the project will be
31.4% if subordinate debt is paid back, or 38.9% if subordinate debt is not
paid back. The public financing portion will be 44.69% if subordinate debt is
paid back, or 37.4% if subordinate debt is not paid back. The rest will fall
under third-party financing.
• The first amended plan had the developer’s return on
investment at 12.69%, with the second amended plan showing the developer’s
return at 9.91-11.51%.
• The first amended plan broke the project into thirteen
different redevelopment projects. The new plan has four redevelopment projects,
with RED Legacy completing projects 2 and 3.
• Initial financing will be private for acquisition of the
shopping center, and includes city-backed TIF bonds that are taxable
special-assessment bonds only and TIF revenue bonds.
• $34,000,000 in bonds has been requested for the project,
with $31,200,000 for the developer.
• The developer is to buy $5,700,000 in subordinate debt.
“Based on the information provided, we believe that the
commission should recommended that the Board of Aldermen affirm the findings
made when they adopted the original TIF plan with the amended and restated
plan,” said Lauber. “The developers have a lot more skin in the game than at
any other point as we’ve gone through this process.”
Aaron March with the White Goss Law Firm, on behalf of RED
Legacy, stated that RED and the city continue to work hard and diligently
together to get the Truman’s Marketplace project going. After determining that
project one, the former Sam’s Club property, wouldn’t move forward on
development, RED decided to continue on with their plans under the assumption
that project one might not happen.
“The amendment you have before you is the project we want to
start in April,” said March. “We want to get started as soon as the city passes
the ordinance moving the bond documents forward. We’ve got the tenants, the
same tenants we had before, and we will renegotiate to move them into the
revised project.”
March and his team are no longer relying on project one, a
supposed big-box retailer, to happen. He stated that if project one doesn’t
materialize, they will still be happy with the project.
“I’ve worked with a lot of developers nationwide, and 99.8%
of them would have walked from this project a long time ago,” said March. “RED,
to their credit, has said, ‘no, we don’t do that. We perform.’”
While the vision of the project from its original form has
changed, March stated that RED is teed up and ready to get to work. He said it
is a vision that can be implemented without exposing the city’s general fund to
risk.
“As with most citizens in the city of Grandview, I’ve been
watching this project progress, or not progress, through the years,” said
Grandview resident Sam Samarasinghe during the public comment session of the
hearing. “We are on the third year of looking at this project, and the only
updates we’ve gotten are little signs stating another six months. I hope this
is the last six months we give them, as there has been a significant lack of
progress. It’s a seventy-five million dollar project and we’re getting a fresh
coat of paint? That’s not what the citizens were promised.”
Ultimately, the TIF Commission unanimously voted to recommend
the second amendment to the Truman’s Marketplace TIF Redevelopment Plan to the
Board of Aldermen for approval. Prior to adoption of an ordinance, a public
hearing before the Board of Aldermen will be held on Thursday, February 26, at
Grandview City Hall, 1200 Main Street. A copy of the proposed amendment is
available for inspection in the city clerk’s office.
