Truman Hotel owner works on new proposal for redevelopment
JEFFERSON CITY - The Tax Increment Financing (TIF) Commission held a meeting on Tuesday to set up an extended public hearing date for a new Truman Hotel & Conference Center redevelopment proposal after Jefferson City Public Schools officials showed their concerns. The original proposal includes tearing down the existing Truman Hotel site on Jefferson Street and building two new hotels, plus refinishing the restaurant and conference area.
"We've been working on finding solutions. We've been working with the developers as well as school district and some other folks as well and trying to get a solution that we hope that is going to work for everybody," Drew Hilpert, the city counselor for Jefferson City, said.
Developers who seek help from a TIF need to figure out how much their property would produce in terms of property tax and sales tax before they begin. After the project, the developers could go back in to see how much increase there has been in sales tax and property tax, and that increase would be used to pay for the part of the development.
"The critical point on TIF is that there's also a 'but for analysis' which says you basically pay, you know, smart people to tell you whether or not this project could happen without tax payers' support. If it can't, then it's eligible for TIF; if it can, then it's not," Hilpert said.
After the original proposal, JCPS Chief Financial Officer Jason Hoffman brought up some concerns about financing too heavily by property tax, and not enough by sales tax.
"The original proposal is certainly heavy on that - it's like 90 percent-ish on the property tax," Hilpert said.
The JCPS is working with the developer and the city to look for some equitable split. Hoffman said the new proposal might try to take some taxes that the city was collecting and put that into the TIF, which then would reduce the reliance on property tax.
"The school district we operate mostly of a property tax, so all of our local funds come to us basically through property taxes. We don't have sales tax, we don't have other types of revenue generated locally. And the original proposal would have the school district not getting any new revenue from this development for 23 years," Hoffman said.
The developer proposed $56 million for the whole project including the construction costs, but Hilpert said there's no tax increases for the public.
"No one would notice this at all. And the theory on the TIF is that the increase in property value and sales tax generated from project will pay for itself. And the risk in this case is all on the developer," Hilpert said.
Hilpert said the project helps to accomplish a couple of things for the city.
"One is it eliminate blight. And if you go to that property it was dilapidated before shut down, and it's producing zero revenue now from the sales tax," Hilpert said. "It's really a high profile location in the city, so you can see it from a lot of places. So to have it all dilapidated building there is troublesome."
June 23 is the date for the public hearing date.