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State investment could speed up MSP development plan

by Jeff Haldiman | May 15, 2022 at 4:00 a.m.
This is the site of where a new multi-agency labratory, funded by the state of Missouri, that will be utilized by departments of agriculture, conservation, natural resources and health and senior services. The property, located just east of Chestnut Street and immediately behind the Missouri Public Health Laboratory, will feature 87,000 square-feet and is expected to cost $78.6 million. To accommodate the construction, the Facilities Management maintenance shed will have to be moved to another location. Construction is expected to start in March of 2023 and the building be ready for occupancy by 2027. (Julie Smith/News Tribune photo)

This week's announcement that state lawmakers approved a new state laboratory to be built on the old Missouri State Penitentiary site could mean development plans for the area will move faster than expected.

During meetings Thursday with Jefferson City Council members and city staff, City Attorney Ryan Moehlman said the city did a land swap agreement with the state at the MSP site where the city got additional land on Lafayette Street, where Housing Unit 5 is located.

In exchange, the city gave land back to the state, 4 acres east of Chestnut Street, and that land, combined with existing state property adjoining the property where the Lewis and Clark State Office Building is located, will be where a multi-agency health lab will be located. It's not far from where the current state health lab is located on Chestnut Street.

That would be an investment of $78.6 million on the MSP site.

"When we started this project, it always was seen that this would likely be a project that grows over time," Moehlman said. "We would do a phase, get some more development and do another phase and grow over time. We always thought we'd get multi-millions of dollars in investment on this site, but we thought it would take a long time -- maybe over 10 years."

Because of the May 2019 tornado that caused significant damage to the MSP site and the effects of the COVID-19 pandemic that hit in 2020, Moehlman said they lost two years of work to develop the site, but that has led to opportunities like the lab project, thanks to federal recovery dollars.

"Without that relief funding, this type of investment wouldn't be happening so quickly," Moehlman said. "That's created an opportunity, but it's also created some challenges."

The biggest challenge, Moehlman said, is taking a development plan, which they thought would take more than a decade, and instead having it take place over a two- to three-year period.

"That means the programmed development doesn't look exactly like it did when the master plans were approved in 2020, and there may need to be additional time and resources allocated to this project in order to accommodate that type of investment," Moehlman said.

Moehlman noted the state MSP Redevelopment Commission put together a plan for the site 20 years ago that called for a mixed use of state office buildings and private development.

"During the great recession in the early 2000s, a lot of that plan went away," Moehlman said. "When we (the city) went out to bid for the MSP, it was a large scale, mixed use state development plus private investment. But over the past year, it's turned back into what the commission proposed of a state and private use mix."

Moehlman said there remains plans for a hotel and convention center on the MSP site.

"That would be in phase one," Moehlman said. "That's what we're working on right now, and things like an ice arena would be in future phases. We are starting to get a lot of interest from private developers with the state announcing its plans because development begets development."

The convention center and hotel would be the "big draw," Moehlman said, and would be located next to Lafayette Street with an overview of the Missouri River.

The MSP Community Improvement District that was formed and kicked in early last year is starting to generate some small use tax revenues from online purchases made by residents in the area of the MSP. The CID, Moehlman said, is a self-taxing mechanism where property owners within the CID have decided there's going to be an additional tax to help generate revenues for project costs. It's a tax of 1 percent and would help with things like infrastructure and parking facilities. It will generate more revenue as more development takes place.

"The great thing about CIDs is that they're flexible, so it's nice to have them in place in case there may be some opportunities to do other things at the site," Moehlman said. "It's like what the Capital Mall Tax Increment Financing District. A TIF allows developers to finance improvements in blighted areas using a portion of the additional sales and/or property tax revenue that results from the development to recoup some of the costs of redeveloping the property."

Print Headline: State investment could speed up MSP development plan

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