Lake Ozark Gets Look at Interior Development Plan

Project would bring 2,780 jobs, 3,689 more residents and over $78.7 million in additional revenue from within the district over the next 23 years, backers say

By Justin Ludwig/Lake Sun
June 19, 2006

LAKE OZARK - Developers submitted what would be the biggest development in the city’s history late last week as they unvieled detailed project plans for the Horseshoe Bend Interior District.

The Horseshoe Bend Development Group, LLC, submitted the redevelopment plan and tax increment financing proposal on behalf of the Stanton Trust’s 450 acres nestled inside Lake Ozark’s undeveloped interior.

The plan projects the city would see an additional 2,780 jobs and 3,689 more residents, as well as over $78.7 million in additional revenue from within the district over the next 23 years.

The development will include approximately 540 medium-density housing units, 1,739 units of high-density housing and over one million square feet of leasable commercial space.

It is subdivided into six commercial and two residential development projects which will span six years of construction at an estimated cost of over $580 million.

Under the plan, Phase C2 construction would begin in January 2007 and finish in January 2008. Once completed, phases C1, C4 and R7 would begin construction.

They are slated to be ready by January 2009. Similarly, phases C3 and C6 would follow, beginning January 2009. Construction would be complete by January 2010.

Phase C5, as well as the largest residential phase, R8, would wait until January 2011 to begin construction. The 139-acre phase R8 is expected to generate 300 units of medium-density residential units and 1,200 high-density residential units.
During the TIF district’s 23-year lifespan, payments in lieu of taxes (PILOTS) resulting from increased assessed valuation within the district, and 50 percent of all economic activity taxes (EATS) generated within the district would be diverted to developers for the retirement of TIF bonds, which will pay for all costs except private development.

In the plan’s introduction, developers project that PILOTS will exceed $78 million, while EATS will surpass $161 million.
Canyon Research Southwest, Inc. of Tempe, Ariz., the real estate research firm contracted by the development group, provides different figures under the plan - $86 million in PILOTS and $127.6 million in EATS.

In either case, the plan states that the TIF district would be terminated when all of the developers’ financial obligations have been paid.

Surplus PILOTS and EATS funds collected by the TIF would be returned to the city, school and other taxing districts.

If the project proceeds, Miller County would see an additional $38 million in revenue from within the district, the plan projects. Miller County would receive $5,316 over 23 years for the undeveloped property.

Projections estimate that the School of the Osage would collect over $9.5 million in additional revenue over the next 25 years from within the district - an increase of more than 2,500 percent.

School of the Osage board members said that TIFs bother them because the school gives up the most tax revenue, by far, and only gets two out of 11 votes on TIF commissions.

“Every dollar we give up kills us,” board member Alison Schneider said.
“You’re giving up revenue that could be used to educate children.”

Schneider was one of the two representatives selected by the board last month to represent the school during the development group’s TIF approval process.
Board members said they weren’t opposed to progress and development, just to using the school’s tax monies to spur it.

“I can be excited about housing if it’s not a TIF,” board member B.J. Page said.

The developers’ plan also includes the completed blight study and affidavit signed by developers that is required by state law for TIF eligibility.

To qualify as a blighted area, and be eligible for TIF, the plan contends that the 450 acres constitutes “an economic and social liability and a menace to public health, safety, morals, and welfare in its present condition.”

In addition, the group’s plan includes information on the Horseshoe Bend Parkway Extension project, which will provide access to the TIF district via a four-lane road.

It would connect Route HH (Horseshoe Bend Parkway) directly to Highway 54, but it is contingent on the Missouri Department of Transportation’s approving an interchange relocation for the Osage Beach Expressway.

Developers’ designs for the parkway extension are expected to be complete by July 2007, under the plan. The road would be ready by July 2008.

The road will be funded through a transportation development district, which developers will use to impose a 25-year, three-fourths percent sales tax within the area. By comparison, the TDD used for Prewitt’s Point in Osage Beach imposed a one-half percent sales tax.

The plan projects that the sales tax will generate $80.7 million by 2033.
The developers’ contracted real estate research firm estimates that figure at $101.3 million.

Contact this reporter at justin@lakesunleader.com