Nine Acres for Sale in the TIF District

Seven Undeveloped Parcels within the TIF District Total About 9 Acres

At the northeast corner of Buckner-Tarsney Rd. (Main St.) and Interstate 70 in Grain Valley, interchange improvements have bumped Outer Rd. away from the highway.  Outer Rd. now encloses about nine acres of undeveloped land that is for sale.

What are the prospects for selling this land?

The primary consideration is whether commercial property is presently not available in the City of Grain Valley.  The answer is that commercial real estate is overdeveloped as part of the real estate fever that created a "bubble" of development without tenants lined up for leasing.  A commercial strip about one half a mile north of the Interstate sits almost empty.  Of the six units, only one is occupied.

In another area of town, Sni-A-Bar Plaza is not entirely leased.
Casey's built a new General Store, but the old one sits unoccupied.
Main St. has at least two vacancies – one is a restaurant that went out of business.

On top of these vacancies, S.G. Property Management is looking for tenants for the new Grain Valley Marketplace – 50,000 square feet of retail space for lease in a development which is supposed to be anchored by a theater.  This construction has begun north of the bumped out Outer Rd., across the street from the nine as yet undeveloped acres which are enclosed by the Outer Rd. and the Interstate. 

B&B Theatres, of Liberty, Missouri, will operate the theater.

Infrastructure (public works) for the development of vacant land north of the Interstate at the Grain Valley interchange is being financed by bonds that have been issued by the city.  The city's Industrial Development Authority (IDA) acts as a “conduit issuer” in order to carry out the annual appropriations pledge on the city’s bonds.  The bonds and interest are supposed to be repaid by Tax

Increment Financing (TIF) from the development district.
An Industrial Development Authority is a private corporation formed by a municipality.  Directors are appointed and approved by the mayor and the board of alderman.

If I understand correctly, the city's financing is spent only on public infrastructure which must be owned and maintained by the city once it has been completed.  These improvements include storm and sanitary sewers, road construction, curbing, sidewalks, grading, and other necessary site work such as a storm water retention basin.

See another post concerning which retailers will not establish themselves in Grain Valley and why not.

P.S.  Outer Rd. north of the Interstate is actually named McQuerry Rd. to the east of Buckner-Tarsney Rd. and Jefferson St. to the west.

Inappropriate Establishment of a TIF District

It's Inappropriate to Establish a TIF District for the Development of Land That Is Empty

A city's economic development council (EDC) should establish a TIF district where economic activity already exists

It's inappropriate to develop the Grain Valley Marketplace northeast of the I-70 interchange using TIF funds.

This special taxing district is useful to existing business people because it spreads the costs of improvements over a repayment period of 15 to 20 years.  When the properties generate an increase in property taxes, the property owners in the district are assessed payments from this incremental increase to pay off the revenue bonds which the city sold for the district.

Instead, the City of Grain Valley is using the TIF district almost entirely for speculation that new businesses might establish themselves.  Only one existing (and successful) business, McShop, is within the TIF district.

In the City of Grain Valley, the authority for this district is the Grain Valley Industrial Development Authority, MO.  This public/private venture is an administrative organization.  It is financed by the City of Grain Valley, which bears the ultimate financial risk of development and redevelopment.

City taxpayers, though, immediately begin to pay interest to the investors who bought the bonds.  This is like your 30-year mortgage.  Your monthly payments are almost entirely interest.  You'll notice that you acquire equity in your home at a rate that is much slower than the actual monthly mortgage payments that you've been making.

Reserve Fund Policy for the Marketplace TIF

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.

- from Real Estate Development: Principles and Process. Urban Land Institute. 2007. "The Roles of the Public Sector" - Chapter 13. pp. 318-19.

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