2013 AMENDMENT:
HADLEYTOWNSHIP
REDEVELOPMENT PLAN
May 1, 2013
2013 Amendment: HadleyTownship Redevelopment Plan
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1. Purpose of Amendment
The purpose of this 2013 Amendment: Hadley Township Redevelopment Plan (the “2013 Amendment”) is to amend the Hadley Township Redevelopment Plan dated July 12, 2006, as previously amended by the 2008 Amendment: Hadley Township Redevelopment Plan dated July 2, 2008 and the 2011 Amendment: Hadley Township Redevelopment Plan dated September 6, 2011 (collectively, the “Redevelopment Plan”). This 2013 Amendment will amend the Redevelopment Plan by (a) revising the boundaries of the Redevelopment Area and (b) revising the scope of the Redevelopment Project. Unless otherwise noted herein, all capitalized terms used herein shall have the meanings set forth in the Redevelopment Plan. Except as amended by this 2013 Amendment, the provisions of the Redevelopment Plan shall remain in full force and effect.
In January 2012, the City distributed a Request for Proposals regarding the Redevelopment Area. The City received three responses, each of which proposed redeveloping a portion of the Redevelopment Area. The City selected two of the developers, who proposed complementary projects that, together, would utilize most of the Redevelopment Area. Subsequently, the proposed developer of the portion of the Redevelopment Area described herein as Sub-Area B indicated that it would no longer pursue development of the area. However, the City believes that redevelopment of the southern portion of the Redevelopment Area (described herein as Sub-Area A), as proposed by the remaining developer, will encourage other developers to pursue redevelopment within parts of the remaining Redevelopment Area, and will spur property owners within other portions of the Redevelopment Area to improve their properties and eliminate blighted conditions. To accommodate the proposal for the southern portion of the Redevelopment Area, this 2013 Amendment will subdivide the Redevelopment Area into three sub-areas, as shown in the maps contained in Appendix A. Sub-Area A is proposed to be redeveloped by Menard, Inc. (“Menards”). The City will continue to seek out redevelopment proposals for certain parts of Sub-Area B and Sub-Area C and will explore incentives, such as grant or loan programs, to incentivize current property owners to remediate blighted conditions on their properties.
This 2013 Amendment is being considered in conjunction with the Hadley Township South Tax Increment Financing (TIF) Redevelopment Plan, which is also intended to incentivize the overall project proposed by Menards. The redevelopment of Sub-Area A will be pursued in connection with the redevelopment of the redevelopment area described in the Hadley Township South Tax Increment Financing (TIF) Redevelopment Plan. This 2013 Amendment removes several parcels from the Redevelopment Area originally set forth in the Redevelopment Plan. All TIF generated from such removed parcels since the original approval of the Redevelopment Plan will be paid to the applicable taxing districts pursuant to the TIF Act. Some of the parcels removed from the Redevelopment Area will be included in the redevelopment area described in the Hadley Township South Tax Increment Financing (TIF) Redevelopment Plan.
2. Revision to Redevelopment Area
Appendix A, Appendix B and Appendix C attached to the Redevelopment Plan are hereby deleted in their entirety and replaced by Appendix A, Appendix B and Appendix C attached hereto. Notwithstanding anything to the contrary in the Redevelopment Plan, the Redevelopment Area described therein shall refer only to the revised Redevelopment Area, as described in Appendix A, Appendix B and Appendix C hereto. All references in the Redevelopment Plan to the size of the Area shall be changed to approximately[*25*]acres, including street and railroad rights-of-way.
The second sentence under “Overview and Background of the Area” on page 1-3 of the Redevelopment Plan is revised to read: “Generally the boundaries of the Area are a portion of the Highway 40/Interstate 64 right-of-way and Dale Avenue on the north, Hampton Creek, Banneker Avenue and the lot lines of various parcels facing Banneker Avenue on the east, West Bruno Avenue on the south and Hanley Road on the west.”
3. Revision to Analysis of Blighting Factors
Section 3 of the Redevelopment Plan is hereby amended so that it applies only to the Redevelopment Area described on Appendix A and Appendix B attached hereto and to the parcels identified on Appendix C attached hereto. All specific references to parcels, structures or blighting factors located outside the boundaries of the Area (as revised by this 2013 Amendment)are deleted. All references to aggregate numbers of parcels, structures and blighting factors within the Area are hereby revised so that they refer only to the portion of such aggregate numbers of parcels, structures and blighting factors included in the boundaries of the Area (as revised by this 2013 Amendment).
4. Revision to Redevelopment Project
Section 4 of the Redevelopment Plan is hereby deleted and replaced in its entirety with the following:
PROGRAM OBJECTIVES
The Redevelopment Plan outlines the programthat the City proposes to undertake within the Redevelopment Area. The City’s objective for the Redevelopment Plan isto facilitate redevelopment of the Area, to alleviate those conditions that have caused the Area to become a blighted area, and to facilitate private reinvestment through a planned program for economic redevelopment. TheRedevelopment Plan calls for commercial uses that will take advantage of the site location, access, and potential trade area; provide new revenue for the affected taxing districts; and create new jobs within the City.
The following more general objectives also form the basis for the Redevelopment Plan:
•Eliminate the conditions that have qualified the Area as a “Blighted area” under the terms of the Act;
•Eliminate and/or reduce the presence of conditions that are an economic liability to the City and local taxing jurisdictions through growth in the tax base;
•Stimulate redevelopment of the Area through private investment in new commercial land uses that will provide the maximum job generation and revenue base for retirement of TIF obligations;
•Provide an implementation mechanism that will accelerate the achievement of these objectives and complement other community and economic development objectives and programs; and
•Further the objectives of the City’s Comprehensive Plan for this Area.
There are several reasons why the redevelopment of the Area would not reasonably be anticipated to occur without the availability of tax increment financing. Significant redevelopment of the Area will be necessary in order to alleviate the blighting conditions and facilitate private sector reinvestment. The costs of parcel assembly, utility relocation, demolition of existing improvements, and grading exceed a developer’s ability to make a project financially viable without public assistance. For redevelopment to occur, infrastructure in the Area must be improved. Funding for such infrastructure improvements must be raised through revenues associated with increased economic activity in the Area(i.e., the TIF revenues,special district sales tax revenues and other revenues appropriated by the City). The Redevelopment Project, as amended by this 2013 Amendment (with its focus on retail uses), is necessary to generate the tax revenues necessary to remedy these blighted conditions. Recognizing these obstacles to redevelopment, the City’s Comprehensive Plan contemplates the use of tax increment financing to facilitate meeting the Comprehensive Plan goals and objectives.
GENERAL LAND USES TO APPLY
The land uses to apply to Sub-Area A fall within the concept of “Planned Development MixedUse.” Such uses include the coordinated development of large, big-box retail use, smaller out-lot or strip center retail uses. Sub-Area B and Sub-Area C are expected to be redeveloped into a variety of commercial and residential uses, including retail, office, hotel, multi-family housing and in-fill single family housing.
ESTIMATED REDEVELOPMENT PROJECT COSTS
As required by the Act, this Plan contains estimated Redevelopment Project Costs, the anticipated sources of funds to pay for Redevelopment Project Costs, the anticipated type and term of the sources of funds to pay Reimbursable Project Costs.
To establish an estimate of the Redevelopment Project Costs to apply to the Redevelopment Area, the concepts for redevelopment presented in the General Land Use Plan must be used. More specifically, the following Redevelopment Plan and project implementation elements and the costs attributable to them must reflect:
•The cost of land acquisition and relocation, including sales and relocation contracts (both for fee owners and the leasehold interests of any tenants) and relocation benefits to be paid to tenants and occupants of the property;
•The cost of demolishing existing improvements, including asbestos removal and other environmental remediation costs, and the cost of demolishing existing infrastructure improvements in order to rebuild to required capacity;
•The amount and type of building construction of various types which could occur in the Redevelopment Area;
•The cost of infrastructure improvements required, such as street improvements, curbing and sidewalk improvements, and upgrading utilities in the Redevelopment Area;
•The cost of improvements to Hanley Road and the cost of storm water control measures;
•The miscellaneous costs associated with development, such as loan fees, construction loan interest, permit and inspection fees, appraisals, title insurance, surveying, soils engineering and compaction, architect/engineer fees, environmental testing, etc.;
•Bond or other financial obligations issuance costs which will be incurred over the life of the Project; and
•Planning, legal, and financial advisory costs associated with the preparation of the Redevelopment Plan, and implementation of the Redevelopment Project which has occurred and will occur in the Area in the future.
The Redevelopment Project consists of the development of commercial and residential uses and the construction of the public improvements necessary to accommodate those uses (including but not limited to street, sewer, utility and stormwater related improvements). Specifically, the redevelopment of Sub-Area A (in conjunction with the redevelopment specified in the Hadley Township South Tax Increment Financing (TIF) Redevelopment Plan) is expected to consist of an approximately 250,000 square foot Menards home improvement store, up to three retail out-lots, related public improvements and the relocation of the City’s public works facility. This Redevelopment Plan will be amended to include more details regarding the redevelopment of Sub-Area B and Sub-Area C before tax increment financing incentives are offered for those areas.
The sizes and site layout of the individual buildings are dependent on the needs and requirements of the ultimate tenants, who, other than the Menards home improvement store, are not known at this time. This Redevelopment Plan is intended to allow for needed flexibility in the building layouts, size and configuration, as long as the overall intent and concept of the Redevelopment Project are maintained.
The Act allows the City and/or any designated developers to incur redevelopment costs associated with implementation of the Redevelopment Plan and the Redevelopment Project. These costs include all reasonable or necessary costs incurred, andany costs incidental to theRedevelopment Project. This Redevelopment Plan provides for the use of TIF revenues for the following costs, in accordance with the Act, which may include, but are not limited to:
•Costof studies, surveys, plans and specifications;
•Professionalservice costs including, but not limited to, architectural, engineering, legal, marketing, financial, planning or special services;
•Property assembly costs including, but not limited to, acquisition of land and other property, real or personal, or rights or interests therein, demolition of buildings, and the clearing and grading of land;
•Costs of rehabilitation, reconstruction, repair or remodeling of existing buildings and fixtures;
•Costs of construction of public works or improvements;
•Financing costs including, but not limited to, all necessary and incidental expenses related to the issuance of obligations, and which may include the payment of interest on any obligations issued under the provisions of this Redevelopment Plan accruing during the estimated period of construction of any redevelopment Project for which such obligations are issued and for not more than eighteen months thereafter, and including reasonable reserves related thereto;
•All or a portion of a taxing district’s capital costs resulting from the Redevelopment Project necessarily incurred or to be incurred in furtherance of the objectives of the Redevelopment Plan and Project, to the extent the City, by written agreement, accepts and approves such costs;
•Relocation costs to the extent the City determines that relocation costs shall be paid or are required to be paid by Federal or State law; and
•Payments in lieu of taxes.
Table 4-1, entitled Anticipated Redevelopment Plan and Redevelopment Project Costs, identifies the potential overall costs of implementing the Redevelopment Project described above. These costs represent the maximum total cost of the Project, regardless of the source of funding. These costs are estimated based on the City’s knowledge of the Project at this time. The actual cost items for implementing the Redevelopment Plan and the Redevelopment Project may vary from these estimates.
Table 4-1
ANTICIPATED REDEVELOPMENT PLAN AND REDEVELOPMENT PROJECT COSTS
HadleyTownship Redevelopment Area
Development Cost Items / Sub-Area A ProjectCost in $ / Sub-Area B/C Projects
Cost in $ / Total $
Land Acquisition and Relocation
(Costs associated with land acquisition and relocation, including relocation of the City’s Public Works Facility, and including appraisals, title searches, closing costs, etc. / 27,000,000 / 27,000,000 / 54,000,000
On-Site Preparation and Improvements Costs
(Includes demolition of buildings, utilities, infrastructure, environmental remediation, extra structural improvements due to soil
conditions, clearing, grading and construction of parking facilities, lighting, utilities, stormwater control, sanitary sewers, landscaping, etc.) / 14,000,000 / 28,000,000 / 42,000,000
Off-Site Improvements
(Includes improvements to the surrounding roads signalization, landscaping and other associated costs.) / 1,000,000 / 4,500,000 / 5,500,000
Building Construction
(Includes construction of new buildings, including commercial buildings, pad sites, etc.) / 12,000,000 / 51,000,000 / 63,000,000
Professional Fees
(Includes architecture, engineering, surveying, legal, planning, consulting, and leasing commissions). / 1,000,000 / 3,500,000 / 4,500,000
Financing Costs and Other Construction Period Carry Costs / 5,000,000 / 8,500,000 / 13,500,000
Contingency / 3,000,000 / 3,700,000 / 6,700,000
Total Anticipated Redevelopment Plan and Project Costs / 63,000,000 / 126,200,000 / 189,200,000
ANTICIPATED SOURCES OF FUNDS TO PAY COSTS
Menards and the Sub-Area B/C developer(s) will be expected to advance all costs associated with implementation of their respective portions of the Redevelopment Project, subject to reimbursement as provided in this Plan and in redevelopment agreements to be entered into between the City and the applicable developer. The maximum amount of eligible redevelopment projects costs that may be reimbursed for the Sub-Area A projectis $15,000,000.[1]
The maximum amount of eligible redevelopment project costs that may be reimbursed for Sub-Area B and Sub-Area C projects is $23,250,000. However, no TIF assistance will be made available in Sub-Area B or Sub-Area C until this Redevelopment Plan is further amended to provide additional details regarding the Sub-Area B or Sub-Area C project, as applicable.
The amounts referenced above are intended to represent the “net proceeds” of TIF assistance available to the developers. Such amounts do not include financing costs, including the costs of issuing any TIF Bonds or other financial obligations (defined below), establishing a debt service reserve fund or paying accrued or capitalized interest. Accordingly, the principal amount of the TIF Bonds or other financial obligations may exceed the total amounts referenced above so as to provide for these financing costs.
It is anticipated that there will befourprincipal sources of funds used to pay the costs of implementing the Redevelopment Project. These sources are:
•Capital that is available to thedevelopers or tenants through theirown cash reserves or private financing;
•Funds available in the Special Allocation Fund orthrough the issuance of tax increment financing bonds, short and long term notes, loans or other obligations (herein collectively referred to as “TIF Bonds or other financial obligations”);
•Additional funds appropriated by the City to pay redevelopment project costs or pay debt service on the TIF Bonds or other financial obligations;and
•Funds generated through the implementation of a Transportation Development District (TDD) under Section 238.200 to 238.280 of the Missouri Revised Statutes or a Community Improvement District (CID) under Sections 67.1401 to 67.1571 of the Missouri Revised Statutes.
The Act requires the following TIF revenues to be deposited into the Special Allocation Fund:
A.“….payments in lieu of taxes attributable to the increase in the current equalized assessed valuation of each taxable lot, block, tract, or parcel or real property in the area selected for the redevelopment project over and above the initial equalized assessed value of each such unit of property in the areas selected for the redevelopment project…” (commonly referred to as “PILOTs”); and
B.Subject to annual appropriation, “…50% of the total additional revenue from taxes, penalties and interest imposed by the municipality or other taxing districts which are generated by economic activities within the area of the redevelopment project over the amount of such taxes generated by economic activities within the area of the redevelopment project in the calendar year prior to the adoption of the redevelopment project by ordinance… but excluding personal property taxes, taxes imposed on sales or charges for sleeping rooms paid by transient guests of hotels and motels, taxes levied for the purpose of public transportation pursuant to Section 94.660 RSMo, licenses, fees or special assessments..” (commonly referred to as “EATs”);
Menards intends to create a TDD or CID over Sub-Area A. The TDD or CID is expected to impose a one-half cent sales tax within its boundaries and to apply all revenues, net of operating expenses, to the reimbursement of eligible redevelopment project costs (including, if applicable, the retirement of any TIF Bonds or other financial obligations). All of the TDD/CID project costs will also qualify as TIF redevelopment project costs so as to achieve the lowest possible borrowing costs on any financings, thus minimizing the time period before the property within the Redevelopment Area becomes fully taxable. If a TDD or CID is not created or a TDD or CID sales tax of at least one-half percent is not imposed, then the City will limit the available TIF assistance for the Sub-Area A project to $11,000,000. The developers of Sub-Area B and Sub-Area C will also be expected to create a TDD or CID over their respective portions of the Redevelopment Area. If a TDD or CID imposing at least a one-half cent sales tax is not created in those areas, the maximum available TIF assistance for those areas will be reduced by the net present value of the revenues a one-half cent TDD or CID would be expected to generate during the life of the TIF, as calculated by the City.