City, Developer Better Work It Out

The bombed-out University Inn

There’s something fundamentally wrong with the mayor’s rejection of public financing for the proposed hotel and commercial development at U.S. 50 and 13 Highway.

Developer Jerry Franklin is knocking down the old University Inn sweatbox to make way for a new hotel and surrounding businesses. Mayor Baird Brock apparently didn’t like the amount of “public funds” going toward “private projects.”

Franklin brought his project to the council Nov. 14. The mayor turned Franklin down, like a bad prom date, in a Dear John letter two weeks later. First of all, since when does the council do business via the U.S. Postal Service? Smells like a Sunshine Law violation.

Secondly, the mayor’s letter was entirely disingenuous. The mayor wrote that Franklin’s request for tax increment financing and a community improvement district would “fund private development costs such as studies, plans, land acquisition, demolition, private improvements, professional fees, promotion of business activities and site preparation.”

Well, the city has a fancy little brochure titled “Innovative Financing Tools” that outlines the very things a TIF can finance: “Eligible costs include professional fees (check), studies (check), surveys (check), plans (check), land acquisition (check), site preparation (check), and construction costs of both public and private improvements.”

So, what the heck went wrong?

For one thing, Mayor Brock suggests the city has a “track record” of using other public financing tools “to provide funding only for public improvements that become part of the city or utility system.”

Let’s visit the Rib Crib and note the public improvements that have “become part of the city or utility system.” Looks sort of similar to what Franklin wants to do. Just because Warrensburg has never used TIF doesn’t make it bad.

Another thing, Franklin’s written proposal to the council should have been more professional. His strategy was basically to hold the city hostage. Release the financing or all you’ll get on that choice highway corridor is a rank lake and a grassy knoll.

Franklin claims the project would generate between 189 and 250 jobs and bring in $6.8 million to $8.5 million more in sales taxes. That’s quite a boast.

Without the project and with a smoothed-over, vacant lot, the city gets $6,500 in property taxes. Period. The city gets zero sales taxes, zero jobs and no additional property taxes.

Everyone needs to take a deep breath. This needs to be worked out.

“Not moving forward until there’s a change in attitude on the council,” Franklin said in an email to me today.

OK, fine. Everyone, please have a seat. It’s time to get to work.

Warrensburg has never used TIF before, but this is no time to be fragile and meek about it. It’s not voodoo and it’s not the devil. Yes, it can be overused but, again, we’ve never used it.

A TIF basically freezes the property tax on a project area (up to 23 years) and the developer uses the increased taxes to pay for “eligible costs” as noted above. A portion of sales taxes, 50 percent, are also reinvested into the project.

It’s a great tool for bringing big projects to communities – big projects that attract other projects and, more importantly, visitors. Warrensburg is drying up. Look around. For sale signs are everywhere. Ask anyone where they go for sushi or head-sized burritos (Lee’s Summit). Where do they go to shop for clothes? Lee’s Summit.

I wonder if Lee’s Summit has used TIF before? I think you know the answer.

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