Downtown Redev: Due Diligence or Malfeasance?

I read some statements in today's CC Headliner article, "Redevelopment project may be in jeopardy. LCRA board members resign because of lack of progress". that I feel require a response. Everyone is entitled to their opinions, but it seems to me that if you are going to make assumptions about the motives of the members of Board of Aldermen, you should at least have the intellectual integrity to ask them what their motivations are. I, for one, did not receive a phone call from either John Custer or Eric Griessel.

I cannot speak to you today about the specific details of the current status of the project, as I have not yet been briefed, but I can speak to you about my feelings towards the last developers agreement, delays in the project since I was elected, and what the Board of Aldermen and city staff are doing to protect your tax dollars.

1. What was wrong with PlazaCorp's first proposed developer's agreement?

There were two major problems with the first agreement PlazaCorp presented to the board.

The first problem was in the tax incentive structure. To summarize, the project is located in a TIF district. This allows the project area to 'capture' 100% of the property tax and 50% of the sales tax generated in the project area and use that revenue for approved purposes (infrastructure, roads, etc.). PlazaCorp wanted the TIF incentives PLUS the remaining 50% of the sales tax generated in the project area. Thus, collecting 100% of the property taxes and 100% of the sales tax in the project area.
THE PROBLEM: Three years ago the people of Ozark overwhelming voted in favor of collecting a sales tax to pay for our new OC. I did not feel that it was ethical to take a dedicated tax that you voted for and use it for a project other than the OC. If the proposed agreement would have passed, that is exactly what would have happened.

The second problem, and perhaps the biggest, was that PlazaCorp's agreement would make the city financially responsible for projects' debt in the event that there was a shortfall. In essence, the city would have to co-sign the debt. As long as the development kept its retail space filled and met its projected revenue this would not be an issue. The development would pay for its self. PlazaCorp seemed confident in its numbers, but if they were so confident in the success of the project, why would they need the city to promise to cover the shortfall? If the project did not meet its projected revenues and the city promised to make up any shortfall, the city could have been on the hook for more that $800,000/year. That is more than 16% of this year's general revenue budget. Plus the near $300,000 in dept service per year we would still owe on the rest of the downtown properties not being developed by PlazaCorp.

THE PROBLEM: Although this is the worst case scenario, even if it were only half that bad, the city could not fulfill its commitment without devastating the necessary services you and I depend on the city to provide.

2. Why was the approval of the developer's agreement delayed?

There was no discussion of this proposal in a Board of Alderman's meeting because the resolution to adopt this proposal was removed from the agenda by it's sponsor, Mike Esteral.

Later, in a special Board of Alderman's meeting, our outside consultants gave a presentation to the board on the feasibility of the project. You can watch the video here:
http://ozarkmissouri.blogspot.com/2009/05/2009-05-26-special-board-of-aldermen.html
As a result of this meeting, the Mayor, with the board's support, directed staff explore all options in order to better protect the interests of the taxpayer.


At the end of the day, your Board of Aldermen are responsible for the financial health of our great city. The LCRA board is not. Because they are afforded this luxury it is easier for them to say they "...[don't] want the city to be too cautious." They do not answer to you, and they are not appointed to be stewards of your tax dollars. It is much easier to be risky with that which you are not responsible.
Also, the LCRA is only tasked with focusing on the downtown redevelopment project. They don't have to be concerned with the impact it will have on the rest of the budget and functions of the city. I, as an Aldermen, must take the 'big picture' into account. PlazaCorp's initial proposal did not fit very well in that 'big picture'.

The success of this project is important to me and I know that it is important to every member of our board and all of our staff. Success does not just mean getting some buildings up and moving in some tenants. Success does not mean putting almost 1/5 of our general revenue budget at risk. Success means giving you a downtown project that we can afford and that is not going to put necessary municipal functions and services at risk.

In closing, some may not like what I have to say, and others may disagree with my reasoning, but I can assure you that my motivations lie only with the best interest of the citizens I represent and the protection of their tax dollars. It is unfair and unfounded to assume that I or anyone else has made any decision regarding this downtown project in hopes that it would fail. The failure of this project would be a failure for the City of Ozark and I can assure that whatever our differences, we are all striving for the betterment of our community.

If you are interested in helping the downtown project become a success there are now 3 open positions on the LCRA board. I would encourage each of you to put in an application to volunteer for the board.

CLARIFICATION: I mentioned above that the TIF would capture 100% of the property tax. To clarify, it would be 100% of the property tax above what the city is currently collecting. For example, if the city was collecting $100 right now, than the city would continue to collect that $100. The project area would only capture anything above that $100. Let me know if you have any questions.

Your Input: Springfield College Station vs. Ozark Downtown Redevelopment

Before the start of Monday's city council meeting an article regarding the development of Springfield's Collage Station was brought to my attention.

During an update from Darrel Groves, one of the city's consultants on the downtown redevelopment, Dennis Sparrow asked Darrell if there was anything we could learn from Springfield's experience. Darrell said that they were getting copies of the College Station agreement to look over and compare it to our project here in Ozark.

I just read the article, and I have to say, there are striking similarities between the two projects and it concerns me. It seems the plans of action for both projects say: movie theater + a downtown feel = economic revitalization. Unfortunately, this equation is not working out for the city of Springfield.

I am anxious to see what results will be produced from negotiations currently taking place between the city, city consultants and PlazaCorp. I hope all parties can come to an agreement that protects our tax dollars from undue risk. These results will be presented and voted on by the council next Monday at 5:30.

My question to you: Are there similarities between the two projects that cause you concern? Do you see characteristics of our project in Ozark that you feel would make it more successful than the Collage Station project?

Your Input: Should Ozark use Federal Stimulus $?

Howdy!

If you've had a opportunity to read the agenda for tomorrow's meeting, you may have noticed 3 bills that reference the American Recovery and Reinvestment Act Federal Aid Program Agreement also known as the 2009 Stimulus Act. These bills, if passed, will

AUTHORIZE THE CITY ADMINISTRATOR OF THE CITY OF OZARK, MISSOURI, TO EXECUTE AN AMERICAN RECOVERY AND REINVESTMENT ACT FEDERAL AID PROGRAM AGREEMENT WITH THE MISSOURI HIGHWAY AND THE TRANSPORTATION COMMISSION AND MAKE SUCH BUDGET AMENDMENTS AS MAY BE NECESSARY.

The bills further read that it authorizes the following:

1. The Board of Alderman authorized Steve Childers, City Administrator to execute on behalf of the City of Ozark, Missouri, the Missouri Highway and Transportation Commission American Recovery and Reinvestment Act Federal Aid Program Agreement, marked Exhibit "A" and incorporated herein by reference.
2. The City Treasurer is directed to make such Budget adjustments as may be necessary to accommodate the aforesaid Agreement.

The 3 projects are as follows:

1. Completion of a sidewalk that will be located on Hwy 14 from the OC to the intersection of NN and 14 on the south side of the street. $97,000.

2. A transportation study to do preliminary scoping of transportation projects. $40,000.

3. Analysis of existing and projected traffic in order to develop an efficient traffic plan. This will be done on 3rd St. $30,000.

My questions to you are:

A. Do you believe in the Federal Government's spending of tax dollars through the Stimulus Act?

B. Do you feel Ozark should ask for Stimulus funds and, if so, do you believe these projects are good candidates?

If you have a strong opinion either way, tomorrow's council meeting is where you need to be. The only time the public is allowed to speak on a bill is when it is in its fist reading. I will hold my opinion until after the meeting.

On a side note, the PlazaCorp offer resolution will be removed from the agenda again and will be discussed in a special meeting on the 8th at 5:30.

2009-05-26 Special Board of Aldermen Meeting on Redevelopment

The video is fuzzy. I will be posting my notes from the meeting and my thoughts tomorrow. Sorry for the delay. I will also be posting the agenda and thoughts on Monday's meeting. I know I say this every time, but this is going to be an important meeting where quite a few important decisions are going to be made.

Update: Part 7 is coming this evening...I couldn't get it all finished last night.

Official Agenda for May 26th at 5:30

City of Ozark Missouri
OFFICE OF THE CITY CLERK

P.O. Box 295 Fax 417-581-0575
Ozark, Missouri 65721 Phone 417-581-2407

BOARD OF ALDERMEN TENTATIVE SPECIAL MEETING AGENDA
Tuesday May 26, 2009 5:30 p.m.

Posted 05-22-09

CALL TO ORDER 5:30 P.M.

MAYOR’S COMMENTS

NEW BUSINESS: 1. Presentation Concerning the Finley River Neighborhood Development District.

Resolution #1588 – Extending the Completion Dates of Original Developers
Agreement. (Alderman Melissa Wagner)

COUNCIL COMMENTS:

ADJOURN.

The tentative agenda of this meeting may include a vote to close part of this meeting to discuss Litigation-Personnel-Real Estate pursuant to RSMo: 610-021 (1,2,3) and such other matters as may come before the Board.

Representatives of the News Media may obtain copies of this notice by contacting:

Lana Wilson

205 N. 1st St.

(417) 581-2407

Fax (417) 581-0575

(To be posted at least 24 hours prior to the commencement of the meeting on a bulletin board or other prominent place which is easily accessible to the public and clearly designated for posting notices at the principal office of the municipal corporation or political subdivision or, if no such office exists, at the building in which the meeting is to be held.) In accordance with ADA guidelines, if you need special accommodations when attending City meetings, please notify the City Clerk’s Office 417-581-2407 at least 3 days prior to the scheduled meeting.

Special City Council Meeting

Howdy!

I was informed today that we will be having a special council meeting on Tuesday the 26th at 5:30 or 6:00. The time is not final yet, but it will probably be 5:30.

Here is the informal agenda:

1. A presentation from Darrell Gross (our outside consultant) regarding his analysis on the Downtown Redevelopment District.

2. The other items will be a MODESA meeting update from city staff and a resolution to extend the dates within the original developers agreement for another 6 months so we can continue getting all the work done that still lies ahead.

This is all the info I have so far. I have not been given a copy of the resolution, so I am not sure what it contains. I am going to city hall tomorrow, and hopefully I can get an update. I will keep you posted.

I am excited to here Darrell's presentation. From all I have heard, he sounds like a great asset to the city, and I am interested to hear his take on the project.

Be there if you can.

Reminder: Community Breakfast is Saturday 8 to 10 at the Village Inn. I hope to see you all there.

Lowdown for the Week

Sorry I haven't blogged on any of the recent activities occurring here in our fine city. It has been a crazy week! I am going to give you the abridged version and you can follow up with any questions you have:

Friday 5/8: (okay...that's been more than a week...sry) I gave a presentation to North Elementary's 2nd grade class. My bonus kido, Karter, attends school there and his teacher, Mrs. Amstutz, asked me to speak on local government. Apparently, 2nd grade is the only grade our kids get any local government education (sad). It was a great time! You can read more here.

Later in the day, I had a meeting with developers of the Downtown Redevelopment area, Plazacorp. I spent about 3 hours with these guys looking at plans and going over numbers. The meeting was very informative and the project is impressive.

Saturday 5/16: Council Retreat at the New OC. If you haven't been to the OC, you need to go. The meeting went from 8:30 - 2ish and was jam-packed with information to help catch everyone up on what's been going on. Highlights from the retreat include: Code Enforcement, Letters of Credit, Financials, Public Safety, Parks and Rec, MS4, DNR, and my personal fav. G.I.S. You can get a play by play here.

Monday 5/18: Interview on KSGF mainly concerning Council Meeting Agenda Item Resolution 1587. This resolution dealt with the Downtown Redevelopment area and the redirection of certain tax dollars within that development area. The piece of the resolution that I took issue with was Section 2 that read:

Section 2. The appropriate officers, agents and staff of the City are directed to take all actions necessary, including the execution of all necessary documents, to apply to the State of Missouri for funds pursuant to the Missouri Downtown Economic Stimulus Act pursuant to the financing plan and revenue projections as set forth on Exhibit A.

Exhibit A included a foot note at the bottom that read:

5. Captures 100% of the City's 2% sales tax through 2017, 1.75% sales tax through 2026 and 1.375% thereafter.

Currently, through the TIF rules, the project will capture 100% of the new property tax, and 50% of the new sales tax generated in the redev. area. If we give the other 50% of the sales tax, that means that the sales tax for the OC, which the people voted for in 2006, would be captured in the redev. area, but would not be used for the OC. Instead it would be redirected back into the project. That is where I took issue with the resolution. Although, the resolution would not be binding, if passed, it sends a message that the city is okay with using your vote as a bargaining chip. You can hear more about my position on this resolution here. Special thanks to KSGF and Vincent David Jericho for letting me come on the show.

Later in the day, we had our city council meeting. I will be posting the video this weekend. The afore mentioned resolution was removed from the agenda by its sponsor, Mike Esterl. Since most of the Aldermen had not read the finalized version of the resolution until Saturday, I was not sure how this resolution would be handled. I was thrilled that Mike decided to do remove the Resolution all together. I think it was a good move, and shows the citizens of Ozark that the board of aldermen will be doing what is necessary to protect your tax dollars. You can read more on this decision here.

Tuesday 5/19: State Audit. Susan Montee's office did a great job on this. All I can really say is: Yes, there was some damaging stuff, but nothing fraudulent. I think the worst part was not knowing what was going on, not so much that it was going on. If that makes sense. Now that it's all out on the table, it's not such a big deal. That is the power of transparency in government. Now we know what needs to be fixed and we can all move forward, together as a community. Kudos the the City Admin. and the rest of the city staff for working hard to get many of these issue resolved already. There is a ton of press on this so just check out any of the local media websites. You can also read the entire audit here.

Let me know if you have any questions. You can post a comment or call me 417-231-1045, or send me an email melissadwagner@gmail.com.