OSAGE BEACH, Mo. -- The proposed Arrowhead Centre project took its first big step after the Osage Beach TIF Commission unanimously recommended the approval of the $385 project's tax increment financing plan on June 24.
Dependent on a TIF and Community Improvement District (CID), the proposed Arrowhead Centre project's TIF plan for its 226-acre, mixed use eight-phase development project on Route KK will now go before the Osage Beach Board of Aldermen for review this month.
At a meeting June 24, the 11-member Osage Beach TIF Commission listened to testimony the proposed development's TIF plan both from the city's bond council and representatives of Arrowhead Development Group, information regarding the $25 million state-of-the-art retirement campus from Midwest Health representatives and the project's overall vision from developer Gary Mitchell.
The commission also heard public testimony from various residents and business owners in the packed Osage Beach City Hall board room, mostly in favor of the development with others raising concerns and questions over road layout of Route KK and Nichols Road within the proposed development.
Arrowhead Centre's TIF plan
The Arrowhead Development Group's TIF plan for its proposed project asks for $55 million in reimbursements to go back to help pay for project costs, such as infrastructure.
A TIF allows cities and counties to encourage development in areas of the community that would not develop or redevelop without some type of TIF assistance, which was proven through evidence provided during the TIF plan review process overseen by the city's bond council, attorney David Bushek of Gilmore & Bell.
Under Missouri law, the governmental entity in which a blighted property is located may form a TIF district, and Arrowhead Development Group also had a third party conduct a blight study. According to the company's attorney, Bill Moore, the study found existing conditions on the property, which was formerly Dogwood Hills Golf Course, to have defective or inadequate street layout, deterioration of site improvements and economic liability/economic underutilization, concluding the redevelopment area is a blighted area as defined under Missouri state statute.
During that time of a TIF, any taxing districts that collected on taxes from that property before the TIF was formed continue to receive their share of the tax revenue at pre-development levels set by the county assessor. Once the developer has been fully reimbursed, the TIF is dissolved and those taxing entities, such as school, fire and ambulance districts, whose tax revenue has been frozen at the pre-development rate begin to receive the higher "incremental" taxes, as well.
"The TIF plan does not generate any new taxes; it is only a redirection of taxes," Bushek emphasized at the TIF Commission meeting.
Bushek said the proposed Arrowhead Centre TIF plan captures 50 percent of the increased sales tax, which is the maximum allowed by state statute, for the commercial development that will occur in the area. He said the plan is to capture 50 percent of incremental increase of property tax revenues and for any areas that will contain residential developments.
The $55 million in reimbursements is at just about 15 percent of the total project costs, which meets the city's TIF requirements. He said the TIF plan is broken down with 57 percent total revenues generated by the project coming from the incremental increase in sales taxes, about 29 percent coming from an increase in property taxes and 14 percent coming from a proposed CID, which would levy a one-cent sales tax within the district and only drawing revenue from that assigned district. Bushek said the developer has filed a petition for a CID with the city.
In Missouri, most TIF districts exist for a period of 17 to 23 years. In the case of the Arrowhead Centre TIF plan, each of the eight phases of the redevelopment project would have a 23-year maximum TIF. As Bushek described, the city, if approved the developer's TIF plan for the project, would pass a separate ordinance to activate each phase of the project as part of the TIF. There would be eight different project ordinances, essentially.
"Each redevelopment project (or phase) when activated by the city will have its own 23-year life to maximize the TIF revenue," he said. "From the date the TIF is approved, the TIF will be retired and turned off (on the whole eight-phase project) after about 28 years. The whole project has a longer amount of time than 23 years, but each project has the maximum amount of time for a TIF."
Bushek said there were several amendments, conditions and other findings in the TIF plan that were included as part of the proposed TIF plan, with input, answers to questions from the commissioners and city staff, and other needed evidence provided by the developers included.
Arrowhead Centre's vision
If the Arrowhead Centre's TIF plan is fully approved and the project's development begins, its first phase is to build a $25 million state-of-the-art retirement campus. According to Joe Perkin of Midwest Health, part of this campus includes an 80-unit skilled nursing facility, 90 assisted living units and independent living units. Totally the first phases of the project would bring 401 senior living units to Osage Beach.
Perkin described the main facility's aesthetic to a residential, home-like feel with front porch, visitor entrances and high-quality care in a relaxed, friendly setting. In addition, the main senior care facility would tie into the Arrowhead Centre's overall "rustic" theme.
Mitchell took a "rustic" style theme from the times he and his business partner spent socializing the historic Arrowhead Lodge in Lake Ozark, which has since been torn down.
"They had great food, and you'd see people playing cards in the lobby or sitting by the fireplace," he said. "We talked with the former owner and want the same rustic feel to the project," Mitchell told the TIF Commission. "We would like to have it themed throughout, starting with the senior living campus and little threads that tie in throughout the development ... maybe it's a color scheme or a certain kind of stone we use."
Mitchell also shared details of each of the Arrowhead Centre project's districts and phases of development, noting he has had letters of interest and more grounded talks with potential partners in many of its sectors. He noted a "top chef at the lake" has shown strong interest in rebuilding the former Mitch and Duffs restaurant on the property, and two notable restaurants - Blue Moose Restaurant and Stroud's Restaurant & Bar - have shown letters of interest to the development.
In addition, Mitchell said a 50,000-square foot indoors sports center where year-round tournaments could be held, a large family entertainment center, a flagship hotel boasting 90 rooms, 222 residential apartments and approximately 761,014 square feet of retail and commercial space is part of the development. In addition, a local winery is looking to build within the development and Mitchell said he hopes to include many major retailers, attracting junior box stores.
Mitchell shared with the commission and meeting attendees this particular project has been his "baby" since he started as an assistant golf professional at the Lake in 1976. Since then, he has helped develop two major golf destination communities, including Rivercut in Springfield, Missouri, and the Old Hawthorne development in Columbia.
"I built (Rivercut) with the city and Green county, and it has won international awards ... We just started the last phase of (Old Hawthorne) project, which started in 2006. It is home to the golf course of University of Missouri and Tiger golf team," he said. "When you do large scale projects it is exciting because you penetrate many areas of the market. We are selling a lot of different neighborhoods at once and it generates a lot of activity. It happened at Hawthorne, offering 10 different lifestyles and they all feed off each other ... that is what we are doing here (at Arrowhead Centre)."
Public comment on the proposed development
Mitchell said the Arrowhead Centre project is also received four letters of intent from local businesses and companies, and has received tremendous support from the city's Parkway West business district.
Joni Walden, Blinds & More owner and Osage Beach Parkway West Business Association representative said their committee is excited and are in "total support" of the Arrowhead Centre development, hoping it will bring more business to that end of the city.
"Bringing business to our end west of the Grand Glaize Bridge has been a challenge to our businesses and our neighborhood. I am excited that we are looking a development on Parkway West," she said at the meeting's public hearing. "I think it will create some pride to our area and clean up some of our Parkway. In addition to what they are doing in their development, I think as a city and citizens, we need to take more pride in our actual parkway and make it something we are proud of and something people will want to come to."
Many citizens shared concerns of the road layout in the Arrowhead Centre's plan for Nichols Road and Route KK. However, Osage Beach City Attorney Ed Rucker assured the public the city would not vacate a road. The city would have to create a separate ordinance to do so. The developers also assured the public that they had no plans of vacating Nichols Road from its current interchange.
Other members of the public also showed favor in not only the overall development but also the quality of lifestyle options proposed for the proposed Arrowhead Centre. Osage Beach resident Bernadine Chisholm said she had dealt with retirement properties in St. Louis, Indianapolis and other places, and sees how the proposed development could offer something with appeal for a current senior demographic.
"I think the retirement population is becoming more sophisticated, they have more money to spend and they want options and things that will keep them here and give them more opportunities to do things," she said. "So many things are missing in Osage Beach and we have all kinds of competition all over the country. I think we need the money just as much as anyone else does or more. I would like to see the sophistication, see the growth ... I am glad for this development .. I think it will get people here and make them stay. I know I want to stay here."
Correction: This article should have consistently stated the Osage Beach TIF Commission meeting was held June 24, not June 25. The original version's error has been corrected in the text above.