TIF commission approves removing casino-owned property from district

Cape Girardeau's Tax Increment Financing Commission gathered Thursday to approve some amendments to a draft redevelopment plan before it is presented in a public hearing later this month.

Three amendments were approved unanimously by the group -- though each was discussed at length before members voted -- with the most significant amendment removing a property from the boundaries of the downtown TIF district.

Five project areas are specified within the TIF district's boundaries, which covers 305 acres. It's roughly outlined by Mason Street and Highway 74 on the north and south and Sprigg Street to the Mississippi River on the east and west.

The inclusion of property owned by Isle Casino Cape Girardeau has been a sticking point for some of the taxing entities included in the TIF district. Superintendent Jim Welker is one of two representatives on the commission for the Cape Girardeau School District and recommended removing the casino property from the district.

Commission members clarified the property within the originally proposed TIF boundaries did not include the casino itself, but did include property it owned that could potentially be the site of a future hotel. John Mehner, commission member and president and CEO of the Cape Girardeau Area Chamber of Commerce, also explained no TIF revenue was ever planned to pay for any development on casino property.

TIF allows the master developer -- in this case, the city of Cape Girardeau -- to collect the increment gained in property taxes between the current value and the improved value, plus 50 percent of the economic activity taxes, including sales taxes and taxes on utilities. The city takes the revenue and invests it in approved developments such as parking, lighting or other infrastructure.

Projects proposed within its boundaries are only eligible for assistance if they pass the "but for" test, meaning they would not be possible but for the assistance of TIF.

Such a hotel -- if it ever came to fruition -- would not receive assistance, Mehner stressed, nor has the casino expressed any interest in seeking TIF assistance for any projects.

"They've never asked for it. They've not even said they're going to do it," he said. "We're talking about a potential thing that might not happen. But understand it for what it is: It's a revenue driver. ..."

Outside the TIF boundaries, the development is a revenue driver for the school and other taxing districts, he said. The property was included within the boundaries because "no TIF benefits are going there, so it is all an increase," Mehner said. That means the district could collect the increment and it could be used by the city to fund public projects.

Commission member Jay Knudtson said as a former mayor of Cape Girardeau, he understood why the city would like to include the property, but said he also sympathized with the school district and the many unknowns it faced with the TIF district.

"It seems like any discussion I've had on this comes back to that casino," he said. "It creates the most angst for you guys (the school district) in terms of the unknown, in terms of what might be, and it also represents the one area that can ultimately generate some real revenue [for the TIF district], so it's a tough deal."

The redevelopment plan -- still in its draft form pending public input -- includes a base of a little more than $60 million, which was projected based on development likely to be realized after the district and its various project areas become active. Among the anticipated development was the construction of the hotel, so with that property removed from the district, Mehner said significant readjustments must be made to the numbers included in the plan.

The commission did unanimously approve the decision to amend the plan and remove the property, although the Cape Girardeau City Council has the final vote on the plan. The council vote will not be until the commission has its public hearing, scheduled for 6 p.m. Oct. 29 at the Osage Centre, and has voted on its official recommendation to the council.

Another amendment approved by the commission Thursday also focused on an issue that's been frequently questioned by involved taxing districts: surplus. The group agreed to include in the plan a recommendation the city provide an annual determination of surplus to be returned to the taxing entities. Should excess funds be available after projects are funded, the city has the option to take that money and divide it among the involved taxing entities.

Mehner pointed out the declaration of a surplus is a voluntary process the council would have to approve, as legislation doesn't require it.

The final amendment adds to the commission's recommendation to the council an annual joint meeting between the commission and the council be held in October to review the status of the district and its projects. Members agreed such a move ensures accountability and both parties remain engaged in the district well into the future.

srinehart@semissourian.com

(573) 388-3641

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Cape Girardeau, Mo.