TIF trustee holds $5 million for debt payments

JOPLIN, Mo. ? Joplin will hold onto $5 million of the $18 million realized from the first round of bonds sold on the city?s newly created tax increment financing district to meet the bond?s debt payments.

Leslie Haase, the city?s finance director, said the money is being held by the city?s TIF trustee, UMB Bank. She said it is to be used to make payments on the TIF bonds until enough tax revenue starts coming in from the TIF district to meet the bond payments.

She gave a financial report to the Joplin Redevelopment Corp. on Tuesday night and sought approval to pay out $13 million of the money generated by the bond sales for TIF and tornado redevelopment project costs. The JRC is involved in buying land for those projects.

Haase said Wednesday that it will be several months before much money comes in from the Joplin Redevelopment TIF District that was put in place in December. Half of any increases in tax revenue inside the designated TIF area will help pay for redevelopment projects generated by the city?s designated master developer, Wallace Bajjali Development Partners. The TIF district encompasses the tornado zone and stretches across portions of central and downtown Joplin, particularly along Main Street.

Haase said the city does not expect to receive any significant amount of money from the TIF district until early 2014, after property taxes are paid at the end of the year. That is why money needed to be held from the bond sales to make payments, she said.

Costs for the bond sales, as of July 30, were $183,794, according to a statement provided to the JRC. Those were fees paid for financial advisory and legal counsel, along with cost reimbursements to several firms involved in the bond issue.

Land purchases by the JRC that are within the TIF zone and eligible to be paid by TIF district revenue amount to $5,364,322. Part of those land purchases were made for the project to build a new Joplin Public Library and movie theater at 20th Street and Connecticut Avenue, and a retail/loft project east of the library site along 20th Street to Carolyn Place. The rest of the purchases are in the area of 26th Street and McClelland Boulevard for a senior transitional living complex that is to be co-developed by Wallace Bajjali and O?Reilly Development of Springfield.

One purchase, that of the Coca-Cola Bottling Co. property at 1301 S. Virginia Avenue, was made for $541,232, but it is outside the TIF zone and has to be paid for by funds other than those generated via the TIF district.

According to a balance sheet of the JRC, the fees charged by Wallace Bajjali for those land purchases totaled $287,852 as of July 29. All but $92,000 has already been paid.

?The only other thing we owe them (other than land purchase fees) is up to $1 million in pursuit costs? for putting the redevelopment projects together, Haase said. That money will be paid out as the projects are developed, as agreed to in a contract the City Council approved when it hired the master development firm. That contract calls for Wallace Bajjali to share the development costs with the city. Haase said the first installment of those pursuit costs will likely have to be paid soon, but she did not know Wednesday how much that would be.

Other costs related to the land purchases so far are $132 for electric charges, $70,349 for land closing costs and $15,260 for liability insurance.

Closed session

THE JRC BOARD met in closed session Tuesday, after an open session, to consider more land purchases.

Source: http://www.joplinglobe.com/local/x1664874957/TIF-trustee-holds-5-million-for-debt-payments

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