A Special Allocation Fund Reserve Policy for the City of Grain Valley’s Marketplace TIF
City of Grain Valley Board of Aldermen Special Meeting - July 31, 2012
A policy that addresses the City’s approach to risk management as it relates to the Marketplace TIF financial bonds
° TIF- Tax Increment Financing
A way of financing a development project by setting up a special taxing district for planning and developing the project.
The district may function as an independent authority or as a public/private venture. In the latter case, the district may be governed by a city governing board sitting as the district board.
This special taxing district is useful to developers because it spreads the costs of development for a repayment period of 15 to 20 years. When [and if] the property generates an increase in property taxes, the property owners [the property owners in the district] are assessed payments from this incremental increase to pay off the revenue bonds that the district sold.
[In the City of Grain Valley, the authority for this district is the Grain Valley Industrial Development Authority, MO.]
Securing financing involves bank fees, services of bond counsels, underwriters, rating agencies, insurers, and other specialists.
Establishing special districts requires a considerable amount of time and talent.
Issuance of bonds was approved by the Board of Aldermen on May 21, 2012. *
Compensation for all the above professionals immediately flows out of Grain Valley from the city's taxpayers since these professionals rarely live in Grain Valley itself.
The city itself takes the full risk whether or not the development will ever generate property tax increases to pay off the bonds and interest, not to mention to recoup the up-front fees which it paid to the professionals.
This redevelopment project is located at the northeast corner of Buckner-Tarsney Rd. (Main St.) and I-70.
* Neighborhood Improvement District Limited General Obligation Temporary Notes - NID Notes
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