The Jefferson City Council unanimously approved a proposal Monday night that would allow a local board to issue bonds, which would help the local company redeveloping Capital Mall to attract new commercial tenants.
This came after the Jefferson City Industrial Development Authority approved a resolution Monday afternoon, authorizing the issuance of tax increment and special district revenue bonds for the project. The Capital Mall Community Improvement District Board will also have to approve this and is expected to do so in the near future.
City Counselor Ryan Moehlman said the board is a group of five people. Four of those members represent Capital Mall JC, the owners of the mall, and the fifth is Jefferson City Finance Director Margie Mueller.
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.
On Monday, Kingsbury indicated those plans had not changed.
F&F Development hopes to get $6 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.
The bill also:
- Approves 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,
- Approves an agreement stating Stifel, Nicholaus and Company Inc., of St. Louis, would underwrite the bonds, and
- Approves 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.
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 earlier this month.
"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," City Counselor Ryan Moehlman previously said.