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The city’s goal with the project is to remediate blighted conditions through a comprehensive renovation of a woefully outdated and underperforming shopping center that serves as a front door to Grandview, according to Lauber.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.