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FOR IMMEDIATE RELEASE
At its Feb. 22 meeting, City Council is expected to hold a public hearing on a special ordinance to create a tax increment financing (TIF) plan to pave the way for the redevelopment of a blighted 28-acre tract at the northwest corner of West Sunshine Street and James River Freeway. The proposed project, called Brody Corners, will be a $27 million retail, restaurant and office development.
Those interested can attend the meeting or tune in live at 6:30 p.m. at cityview.springfieldmo.gov.
Tax increment financing is a mechanism to capture incremental tax revenues resulting from redevelopment and apply those revenues to pay redevelopment project costs. Reimbursable project costs for the Brody Corners development are projected to total $3.4 million and consist of on-site excavation, public utilities, sewer and stormwater; off-site public utilities and 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,” said Economic Development Director Sarah Kerner. “The developer will pay for the public improvements up front 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.”
If approved, the Brody Corners TIF will capture 75% of new real property taxes and 50% of new sales taxes. The existing tax base, 25% of new real property taxes and 50% of new sales taxes will provide immediate benefits to the Springfield Public School District, the City, Greene County, Ozarks Technical Community College and the Springfield-Greene County Library District.
If the property remains undeveloped, total tax revenues from this property for the City, Greene County, school district, OTC, and the library 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 City, county, school district, OTC, and the library for the next 23 years are projected to be $4,844,608.
If approved, the Brody Corners TIF would be Springfield’s fifth TIF zone. A map of Springfield TIF zones can be viewed here.
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.
The commission is comprised of 11 members – six appointed by the City and five appointed by other taxing jurisdictions. Members are:
Tax increment financing provides for the redirection of the incremental increase in sales and property tax revenue resulting from a redevelopment project to be used for public improvement project-related costs, infrastructure and capital improvements. No TIF revenues may be used for private projects.
“TlF is based on the premise that there will be an increase in the value of real property, new jobs and other economic activity within the redevelopment area as redevelopment occurs,” Kerner says. “As the property is improved, the assessed value of real property in the redevelopment area increases above the base level. By capturing the increase in the assessed value of the property over the base level, a tax increment is produced.”
Up to 100% of property tax increments, also referred to as "payments in lieu of taxes" or PILOTS, are transferred to a special allocation fund that is administered by the city. The City and county also transfer 50% of all incremental sales tax revenues to this fund. The money collected in the special allocation fund is then used to pay directly for the redevelopment project costs or to retire bonds or other obligations issued to pay such costs.
What type of costs can TIF fund?
The use of TIF revenues may only include the following items, which are set forth in Missouri’s TIF Act:
How long can TIF operate?
TIF can be utilized for up to 23 years from the date of approval of any redevelopment project. Redevelopment projects must be approved within 10 years from approval of a redevelopment plan.
For more information, please contact Sarah Kerner at 417-864-1035 or Cora Scott at 417-380-3352.