This article expands upon "City releases final details on conference center proposals" posted Tuesday.
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Jefferson City released final details Tuesday on two proposed conference center plans, and the City Council is expected to vote on the issue April 7.
A summary of the two proposals was provided Tuesday to the News Tribune by city attorney Drew Hilpert.
The proposal from Jefferson City-based Farmer Holding Co. includes a 61,000-square-foot conference center to be located within the Capital Mall, with a 127-room hotel attached. The largest single room in the Farmers' proposal is 40,000 square feet, and the total conference center cost would be roughly $14 million. The hotel itself would cost just under $14 million.
The Farmers' proposal has no separate breakout space, instead specifying that any need for smaller spaces could be accommodated by sectioning in the large exhibition space.
The proposal from Hannibal-based Ehrhardt Hospitality Group includes a nearly 45,000-square-foot conference center in the 300 block of West McCarty Street, with a 150-room hotel attached. The largest single room in the Ehrhardts' proposal is 30,000 square feet, with an additional 2,000 square feet of breakout space within the hotel. The conference center would cost $13.8 million and the hotel itself would cost $15 million.
The Ehrhardts' proposal also specifies additional breakout meeting space could be available through partnerships with Capitol Plaza and the Truman State Office Building, though Hilpert said representatives of Capitol Plaza have not been part of the discussions or negotiations so far.
"Those deals are not done, they're just conceptual," Hilpert said."I don't know where their (Capitol Plaza's) position would be on that."
Hilpert said negotiations with the state for the conference center site are ongoing, but he doesn't anticipate any obstacles to obtaining the property.
"Their big issue is parking," Hilpert said. "So we're trying to find ways to solve that."
Both proposals would use at least $9 million that is expected to be raised by the city's lodging tax. Hilpert said the Ehrhardts actually have estimated that, with anticipated growth from the conference center and new hotel, the lodging tax will raise nearly $12 million. He said the Farmers chose to stay with the more conservative estimate of $9 million.
Both proposals also state that, besides any tax incentives provided or agreed to by the city, any operating loss for the conference center would be the responsibility of the developer.
Requested incentives of the Farmer proposal
The Farmers' proposal includes a tax increment financing, or TIF, district on the Capital Mall and new hotel, as well as a community improvement district, both of which have already been approved by the City Council. However, the proposal modifies the TIF on the Capital Mall from a 50 percent TIF to a 75 percent TIF, meaning of any increased sales taxes, 50 percent would go toward mall improvements, 25 percent would go to conference center construction costs and the other 25 percent would go to the city.
The proposal specifies a 100 percent TIF would be used on the conference center and hotel, meaning the Farmers would keep all increased sales tax revenue for the 23-year period of the TIF.
The TIF and CID combined is estimated to raise about $10.7 million throughout 23 years.
The proposal also would capture the 3 percent lodging tax earmarked for the Jefferson City Convention and Visitors Bureau on the new hotel, in addition to the 4 percent lodging tax dedicated to conference center funding, which would raise $247,000 annually for 23 years.
The city collects 7 percent lodging tax on all hotels within the city, with 4 percent going to the conference center fund and 3 percent going to the CVB to fund its operations. Hilpert said the city would have to look and make sure such a diversion is allowed under the state statute.
Also requested in the proposal is an appropriation pledge to support bond financing of TIF and CID revenues, as well as the full 7 percent lodging tax, which would allow for a bulk payment up front of the revenues the incentives are expected to collect. Hilpert said in case the incentives did not collect as much revenue as expected, the pledge would essentially promise that the city would consider making up the difference from city funds.
"It's backing those bonds with city revenue," Hilpert said.
Hilpert said the Farmers have made clear such a pledge would not be necessary if the cost of the conference center is reduced.
"Developers state they have proposed a top of the line center which could be reduced upon agreement of the council and developer," states the summary of the proposal.
The Farmers' proposal also states the developer would donate 118 E. High St., which was recently purchased by the Farmers from Central Bank, for use as a pass-through to a future parking garage. The concept of using that building as a pass-through with public restroom facilities was previously discussed as part of Transformation, the failed economic development sales tax put forward by the Jefferson City Area Chamber of Commerce that sought to pay for 30 different projects.
Requested incentives of the Ehrhardt proposal
The Ehrhardt proposal includes tax abatement on the new hotel, which is estimated to bring in roughly $5.2 million throughout a 20-year period, as well as a 250-space parking garage built by the city at an estimated cost of $5 million. The proposal also specifies the need for overflow parking in the 200 block of West McCarty Street, which the city estimates would cost an additional $1.2 million for improvements.
Hilpert said the city has $3.5 million in its parking fund and would be able to raise the needed funds for the proposed garage through bonding.
"We can afford a 250-space garage on the economics that we've got now," Hilpert said. "The downside is it would prohibit us from building another garage downtown for 20 years ... maybe less if things go well."
He said the Ehrhardts would maintain the garage, in terms of snow removal and ensuring guest-only parking, but major repairs would be a city obligation.
The Ehrhardt proposal also would use a CID and a transportation development district, or TDD, to capture additional revenues from the hotel, conference center and Capitol Plaza, though the proposal notes those boundaries could expand if needed. The proposal calls the use of those two incentives a "Special Local Conference Center Incentive" and estimates it would raise roughly $4.8 million throughout a 20-year period.
Both the proposed CID and TDD, neither of which have been formally approved by the City Council, would authorize an additional 1 percent sales tax each. A CID also would require a vote by all the affected property owners, Hilpert said.
Also noted in the proposal is that "all sales tax from (the) new hotel and (conference) center would be appropriated to this project."
Hilpert said the city would be obligated to pay $327,000 annually, plus 1 percent annual increase, to the developer, which would presumably be raised by the additional 2 percent sales tax. However, if revenues do not meet that amount, he said the city still would be required to pay that amount.
"(The Ehrhardts) are very comfortable that you can build the district large enough that there will actually be surplus for the project for improvements," Hilpert said.
Neither developer included new sketches or designs for the most recently detailed facilities because Hilpert said the council wasn't comfortable having the developers paying for expensive architectural designs unless they had been chosen to build the facility.
"There's considerable cost in that, considerable time," Hilpert said. "That would kind of be the next step."
The City Council is expected to vote on the proposals at its April 7 meeting.
Speak your mind
A public hearing on the two proposals will be held at 5:30 p.m. Monday in the Council Chambers in City Hall. Those who wish to speak are encouraged to sign up before the meeting by contacting City Clerk Phyllis Powell at 573-634-6311 or [email protected].