The Jefferson City Council reviewed a proposal Monday that would allow a local board to issue bonds, which would help the local company redeveloping Capital Mall to attract new commercial tenants.
If the council approves the bill later this month, the Jefferson City Industrial Development Authority can issue tax increment and special district revenue bonds, City Counselor Ryan Moehlman said.
Rob Kingsbury, of Farmer Holding Company, whose subsidiary F&F Development purchased Capital Mall in 2012, requested in April the city allow the company to bond on future tax increment financing (TIF) and community improvement district (CID) revenues.
TIF helps finance improvements to a property in a designated redevelopment area by allowing developers to be reimbursed for certain improvements through new tax revenues generated by the project. The Capital Mall CID uses sales tax revenue to help pay for improvements at the mall.
Kingsbury previously said the bonds would help the developer sign leases to fill two large commercial spaces on the mall property. Those two opportunities include filling the area that formerly housed Sears and having a restaurant fill an outlot site on the mall property.
F&F Development hopes to get $8 million-$9 million from the bonds, Kingsbury previously said, allowing the company to attract new businesses. Without money from the bonds, the company would have to wait for money to be collected from the TIF and CID to pursue new opportunities.
If approved, the bill would also:
Approve an agreement between Jefferson City, the Capital Mall CID and Industrial Development Authority stating the city will pledge TIF revenues and the CID will pledge CID sales tax revenues to help repay the bonds,
Approve an agreement stating Stifel, Nicholaus and Company Inc., of St. Louis, would underwrite the bonds,
Approve the formation of a Trust Indenture between the Industrial Development Authority and UMB Bank relating to the bonds,
Approve a preliminary official statement that will be used in the initial bond offering,
Approve a contract stating Jefferson City will provide certain secondary market disclosures regarding the bonds, and
Approve an agreement between Jefferson City, the Industrial Development Authority, the Capital Mall CID, and UMB Bank stating the city, CID and authority will "make certain representations and agreements with respect to maintaining the tax-exemption on the bonds," according to the proposed bill.
Before the Industrial Development Authority can issue the bonds, the Capital Mall CID and authority must adopt resolutions approving the transaction, the bill states. Moehlman said he expects those approvals later this month, with the bond issuance to close in early August.
In May, the Industrial Development Authority approved Stifel, Nicholaus and Company Inc., of St. Louis, as the underwriter for the bonds.
Since Capital Mall JC, LLC wants to issue bonds, the city had to revise its 2014 TIF contract with Capital Mall JC. The City Council approved the amendment Monday evening.
"The original contract in 2014 did not contemplate issuance of obligations using the TIF as the source of funds to repay those obligations so this makes the necessary changes to allow the issuance of the bonds," Moehlman said.
In other business Monday, the City Council approved a $152,556 engineering design contract with Bartlett & West to design a roundabout for the intersection of Clark Avenue and Dunklin Street.
Construction of the roundabout is estimated to cost approximately $1.7 million, City Engineer David Bange previously said. The city and county plan to partner on the project and use sales tax funds, he added.
Construction would not begin until 2022, city staff said.
If the city constructs the roundabout, it would have to acquire a nearby building that currently houses Joshua House Church, Bange previously said. The roundabout would also impact a nearby gas station and some residences.
Resident Dan Schmitz told the Council on Monday that he has driven through that intersection multiple times and has "never had a traffic flow issue there."
The left-turn bypass lane for traffic traveling east on Dunklin Street can be confusing, he added, but the city could replace the left-turn bypass lane with a normal left-turn lane.
Schmitz said he does not believe there are enough cars traveling eastbound or westbound on Dunklin Street to Clark Avenue to warrant a roundabout.
"I just don't see it as an improvement," he said. "It may even be a deterrent because when you come to a roundabout, you do have to slow more than if it was a straight-through. It's going to create all the people going north and south on Clark to slow down to take that circle."
Bartlett & West conducted a traffic study on the Clark Avenue interchange and corridor, from East McCarty to Hillcrest streets.
"We believe this is the best solution for the intersection, not only for today but into the future," said Britt Smith, Jefferson City Operations Division Director.