The Jefferson City TIF Commission voted Tuesday to continue its public hearing regarding the proposed Tax Increment Financing (TIF) for the Truman Hotel property until later this month, when commissioners can see a final plan addressing concerns from the public school district, as well as other local hoteliers.
"We have heard some concerns from different parties about the TIF, and we've been working with the developer to try to address those," City Attorney Drew Hilpert told commissioners at Tuesday's meeting. "We think we've got at least the basis of a good plan that's going to be a little better, a little more acceptable and hopefully very acceptable to the TIF Commission and the public and the City Council, as well. We are still in the process of finalizing some documents."
The new TIF plan likely will lower the level of reimbursement the developer would receive from new property tax revenue on the property, Hilpert said, noting specifics are not yet available.
The vote to continue the hearing allows the TIF Commission to meet for a potential vote at 5 p.m. June 23 at City Hall without publicly posting another 45 days' notice. City staff plan to prepare final plans, staff reports and a contract for the commission within the next week or so, giving commissioners at least a week to look over them before the hearing reconvenes.
The Puri Group of Enterprises, which owns the Truman Hotel & Conference Center that closed in November 2015, applied earlier this year for TIF assistance to rehabilitate the 8.51-acre property. The redevelopment plan includes replacing the Truman Hotel's three existing outer buildings with a new Holiday Inn & Suites and replacing the main building with a new Courtyard by Marriott, as well as renovating the existing 24,000-square-foot meeting space and adding a Cheerleader Pub and Grill inside the first hotel.
The TIF, as originally proposed, would have reimbursed the developer with 100 percent of the increased property tax revenue and 50 percent of increased sales tax collected on the property, until the TIF-reimbursable amount was repaid. Local government entities that receive property tax revenue would continue to receive revenue during the TIF's lifespan based on the property value before improvements were made.
At least three local hoteliers have also brought concerns about the original proposal to the city, appealing that the Puri Group's projections for construction costs and developer fees were overestimated, Hilpert said.
The Puri Group has estimated the project will cost approximately $47.9 million to complete, with a projected $8.89 million eligible for TIF reimbursement.
"We've asked our finance guys to make sure that's reasonable based on the development," Hilpert said.
Regardless of projected costs, he added, the developer would benefit only based on actual expenditures if the TIF is approved.
"They don't recover what they've put in the plan; they recover what they spend," Hilpert said, noting the concerned hoteliers might still contend if the cost projections are too high the developer may not truly need TIF assistance.
The Jefferson City Public Schools (JCPS) Board of Education has voiced opposition to the 100 percent property tax reimbursement since the plan was presented to the board in April. While the school district would have gained a projected $1.69 million in revenue over the TIF's maximum 23-year lifespan, it stood to forfeit $1.6 million in new property tax revenue that instead would go to reimburse the Puri Group over that period, JCPS CFO Jason Hoffman has previously told the News Tribune.
"We're trying to address everyone's concerns in a way that can be beneficial to the whole community," said Vivek Puri, of the Puri Group.
The Puri Group's most recent estimate, given at the May 9 school board meeting, is the project will generate $33.29 million in increased tax revenue for the city and county, as well as $62.8 million in hotel payroll, over 23 years.
Representatives of the Puri Group have previously told the News Tribune the project will only go forward if the TIF does, and their third-party financing is contingent on the TIF's approval, echoing the conclusion of an initial third-party evaluation by Springsted on behalf of the city that the project could not profitably proceed without economic development assistance.
Previous coverage:
JCPS expects new TIF proposal, May 24, 2016
Developer meets with JCPS board to discuss TIF, May 10, 2016
Truman Hotel TIF meeting rescheduled, April 12, 2016
Schools historically have little power in TIF decisions, April 10, 2016
JCPS balks on proposed Truman Hotel TIF, April 6, 2016
Truman hotel seeking Tax Increment Financing for proposed developments, March 20, 2016
Truman Hotel closes, Dec. 4, 2015