Developers, school closer to deal

Prestwick Plantation developers have made a $13 million offer to the Cape Girardeau school district

By Bob Miller

Southeast Missourian

Cape Girardeau school district officials and developers of a proposed 900-acre residential subdivision near a golf course are getting closer to a compromise that would allow the developers to move forward with the tax-increment financing process.

Tax-increment financing, an economic development tool, allows the increased tax revenue to go toward infrastructure of the development district instead of going to taxing entities, but only if it is determined the project could not be done without TIF assistance.

Until the Prestwick Plantation developers and the school district come up with a compromise, the process remains in limbo.

But now the developers have offered to pay the school district the amount of money that would have gone to the district if the project did not move forward.

That figure, based on a report by an independent consultant hired by the city -- Chauncy Buchheit of the Southeast Missouri Regional Planning Commission -- is roughly $13 million over a 23-year period.

Even without development the value of the land surrounding the newly built Dalhousie Golf Club would increase, as would the taxes on that property. Normally, developers pay the base property tax year after year until the TIF expires, but schools superintendent Mark Bowles insists that the school district will discourage any plan that does not guarantee that the school district will not lose any future growth in tax revenue.

If the 2003 tax base were frozen, as is done in most TIF cases, the school district would stand to receive $2 million over 23 years. With the developers' guarantee of $250,000, Bowles said, the school district would receive $15,834,000 over 23 years. In 2006, projections have the property tax at more than $250,000 and the developers have agreed to pay the difference, Bowles said.

"I feel they're making a sincere effort to accommodate us," Bowles said. "And we're making a sincere effort to investigate this thoroughly."

The school district would benefit after the TIF is completed if the property is sold and houses built as the developers expect.

The span of the TIF has not been determined. The developers want it to extend for 23 years, the maximum allowed by law. The report says the TIF should last 17 years. Bowles previously requested the TIF to last 10 to 12 years.

Even though the developers have agreed to pay up to $8 million for a new elementary school if and when one is needed, Bowles said he considers it a negative effect if the school district does not get the incremental taxes that would have occurred without the project.

The developers have said they will honor that position, though the financing details have not been worked out. The developers would use the increased property tax estimates in Buchheit's report. Buchheit based his analysis on the Bent Creek Golf Course development in Jackson.

Prestwick's original proposal asked for TIF funds totaling $30 million -- $24 million for the infrastructure, $4 million to the school district and $2 million to the city, mostly for the widening of Bloomfield Road.

Buchheit's report said $33.5 million could be bonded for this project. Developer Cord Dombrowski said he thinks $28 million to $29 million is reasonable.

Matter of principle

Bowles is opposed to TIF and all tax abatements as a matter of principle. He says school districts were designed to be funded with property taxes as they increased. Instead, he feels the school district's money is being offered as "bargaining chips."

Based on his premise, Bowles said he will fall short of endorsing the TIF but would be willing to tell the TIF Commission, a recommending body to the Cape Girardeau City Council, that the district will not be negatively affected.

Bowles said the next step will be to meet with a lawyer familiar with bond language and TIF. He said details need to be worked out such as which financial responsibility will be taken care of first -- the school district or bond debt.

Bowles said once the information is gathered from the bond lawyer, he'll take the information to the school board either this month or in February.

At that time, the school district may be able to report to the commission and give the OK that the process can continue, he said.

bmiller@semissourian.com

335-6611, extension 127