The Springfield City Council is holding a public hearing on a $27 million development called Brody Corners, a site where the Springfield and Republic city limits meet. The proposal includes $3.4 million in tax increment financing.
Correction: An earlier version of this story stated that the 28 acres of property annexed into Springfield in 2021 is inside the boundaries of Springfield Public Schools. However, Greene County Assessor’s Office records show that the property is actually inside the Republic School District and subject to Republic School District taxes.
Financial incentives for a developer will be the subject of a public hearing before the Springfield City Council Feb. 22.
Brody Corners is a proposed 28-acre development at the northwest corner of the U.S. Highway 60 interchange with West Sunshine Street.
“This is at a very key intersection, especially with lots of developments happening in Republic lately,” Springfield Economic Development Director Sarah Kerner said.
The proposal is a $27 million development with retail, restaurant and office space.
The developer wants a $3.4 million deal with the city of Springfield to help pay for some of the costs tied to construction. This particular incentive, called tax increment financing or TIF, diverts a portion of the property and sales taxes after the project is built to help pay back the developer for certain costs.
The development would be Springfield’s fifth TIF agreement.
The project goes back on the city council’s agenda after its original sponsor, Zone 3 Councilman Mike Schilling, officially withdrew his bill for the project in December.
The property owner for the 28 acres of land is listed as West Sunshine Development, LLC, which has an address on South Fremont Avenue in Springfield, and is registered to developer Mike Seitz of Triple S Properties.
The property specs
Per the draft of the agreement, the $3.4 million would offset the cost of connecting the development to city utilities, sewer and stormwater infrastructure construction, excavation, street improvements and “allowable project fees.”
“This project is structured as a ‘pay as you go’ TIF, meaning the city will not issue bonds for the project,” Kerner said. “The developer will pay for the public improvements upfront and be reimbursed over time as TIF revenues are generated by new construction and sales occurring within the TIF area. If the developer fails to generate a sufficient incremental increase in taxes to be fully reimbursed within the 23-year life of the TIF, the city has no financial obligation to repay the cost of the public improvements.”
The development is expected to generate $8.07 million in tax revenue over 23 years, eventually reaching a tax collection pace of more than $400,000 per year. Without the development, the projected tax revenue for the property drops to about $287,000 over 23 years, according to calculations that Kerner provided to the Springfield City Council. The city of Springfield’s tax benefit over the life of the TIF agreement would be about $1.5 million, while Greene County stands to make $1.9 million in added tax revenue.
Councilman Andrew Lear pointed out that the reimbursement has an assumed interest rate of 6 percent, which means the $3.4 million is not an exact figure.
“My understanding is that would also be accruing interest on the unpaid amount at 6 percent,” Lear said. “Over 19, 20 years, that would be a significant amount of money, as I understand it, beyond the $3.4 million.”
Site sits on what was once a ‘sewage lagoon’
To qualify for tax increment financing, an area must be blighted, which means that unsanitary or unsafe conditions make the land unsuitable for use, but for the plan to develop and repurpose the land.
The blight study for Brody Corners includes documentation of dilapidated structures from the mobile home park and asphalt streets in poor condition. Presently, the property has no connection to Springfield’s municipal water supply.
“There is an existing on-site wastewater treatment facility, otherwise known as a sewage lagoon, that has not been removed or remediated as required by court order. It was found to be leaking into a sinkhole and contaminating groundwater, and contaminants were found in nearby wells and drinking water,” Kerner said.
Kerner said the Missouri Department of Natural Resources took action against the previous property owner.
Councilman Schilling withdrew his sponsorship of the bill containing the TIF agreement, and it was not heard or voted on at a meeting Dec. 13, 2021. Schilling made his decision to withdraw sponsorship after visiting the site and observing the trash, debris and other foul conditions on the land.
“Frankly, if I knew back in annexation time what I saw in this Byzantine 201-page report that included the blight study, I would have never voted for annexation. It’s a hellish mess out there, and I don’t know why we even took this pig in a poke in the first place,” Schilling said.
The phrase “pig in a poke” is a colloquial idiom used to describe a deal that is made without thorough examination, with “poke” being a trite word for “bag.” A deceptive farmer would put a stray cat into a bag and sell it to an unsuspecting victim, claiming that the bag contained a suckling pig. The Oxford English Dictionary dates the phrase back to 1555.
Councilman Richard Ollis hinted at support for the TIF plan, in part because it called for cleanup work.
“Isn’t the whole idea for the development to come in, clean this area up and make it a productive, effective use of this, including the removal of the lagoon?” Ollis asked.
The TIF plan must demonstrate a positive economic impact for all of the taxing districts involved in it.
“Typically we want a demonstration that the proposed TIF projects would provide substantial and significant public benefit through creating new jobs or retaining existing jobs, eliminating blight and/or strengthening the employment and economic base of the city,” Kerner told the Springfield City Council at a special meeting on Dec. 6.
Springfield-based attorney for the developer Cory Collins, of the Husch Blackwell firm, explained that his client bought the property after a foreclosure.
“My client, who I represent in this development, did not own the property during any of the prior iterations of its use,” Collins said. “The judgment that you look at — it was sought when Josh Hawley was the attorney general and the [Missouri] Attorney General’s Office actually pursued it. They obtained a judgment for monetary damages and this order against the property.”
Collins said that the order would not legally apply to his client, and that the state would need to seek damages against his client in order for the new property owner to be held accountable to the previous court order.
“They have not stated any intention to do so, because we’ve been working with them since the time that this property was purchased and said, ‘We want to remediate this. We are working through this process,’” Collins said.
Collins said there is a plan to clear out the spot where the sewage lagoon once sat.
What-ifs of the TIF
If approved, the Brody Corners TIF will capture 75 percent of new real property taxes and 50 percent of new sales taxes collected within the 28 acres of the development zone.
Sales tax is collected through the establishment of a community improvement district (CID), a financial incentive that allows a development zone to impose a sales tax above and beyond the city, county and state sales tax that is already being collected at stores inside the zone.
Personal property taxes are not captured by a TIF agreement.
If the property remains undeveloped, total tax revenues from the 28 acres for the next 23 years are projected to be $287,713. If the property is redeveloped according to the Brody Corners TIF Plan, total tax revenues generated by the development for the next 23 years are projected to be $4,844,608.
The Springfield Planning and Zoning Commission and the Springfield TIF Commission both recommended the project for approval by the city council.
Springfield’s TIF Commission conducted a public hearing regarding the Brody Corners TIF Plan earlier this month and recommended City Council adopt the TIF and redevelopment plan.
How to take action
Attend the Springfield City Council public hearing on Brody Corners
Date: Tuesday, Feb. 22, 6:30 p.m.
Location: Historic City Hall, 830 N Boonville Ave.
Follow along at home: http://cityview.springfieldmo.gov/livestream/