COLUMBIA — A young entrepreneur walks a few blocks from his downtown office, picks up a few things for dinner at a grocery store and then takes the elevator seven floors above the store to his two-bedroom apartment.
A recently retired couple grabs an early bite to eat in a restaurant in the same building where they rent their home. After supper, they make their way to the building's roof to go for a short swim.
That's how local developers Nathan and Jonathan Odle imagine their proposed development at the northeast corner of Tenth and Locust streets in late 2010. Right now, the property is home to three buildings and a 24-spot parking lot.
The Odles, of Columbia, want to replace them with an eight-story structure that would rival The Tiger Hotel in height. It would feature a grocery store, restaurant and rooftop swimming pool; five floors of apartments that would rent for about $1,200 per month; 11 indoor parking spots and 15,000 square feet of office space.
But the Odles say they need a $3.2 million tax break over 23 years to accomplish their dream. Last week, the Odles operating as Trittenbach Development submitted an application for tax-increment financing for the $17.1-million project.
Trittenbach owns three of the four parcels it needs for the project. The other parcel, the surface parking lot, is owned by the city. Trittenbach has been negotiating since October to buy the property from the city.
Although Trittenbach is asking for 19 percent of its project to be paid for through tax-increment financing, its approach is radically different.
Normally, a lump sum of money — a portion of the difference between the owners' property taxes before and after development — is invested into the project from the get-go.
Trittenbach, however, has proposed a "pay-as-you-go" plan. It would pay its property taxes every year, but a portion of those taxes would be reinvested back into the project each year. That means the lump sum that's normally paid at the beginning of a project would instead be doled out over 23 years.
"This way makes it more fair for everyone," said Brad Wright, the project's architect and spokesman. Wright said the public investment would come from the site's actual property taxes, rather than a projected estimate.
"There's no risk for the city," he said.
Assistant City Manager Tony St. Romaine agreed that pay-as-you-go tax-increment financing absolves the city from any credit risk.
For a project to qualify for tax-increment financing, it must satisfy three requirements: It must be in an area designated as blighted or as an area in need of conservation; the project must not be financially feasible without public investment; and it must create a substantial benefit for the community.
The application Trittenbach submitted to the city included a report conducted by Development Strategies that argued the four parcels of land should be considered blighted.
There's no question the property is deteriorating. Tree roots and ivy, browned and frostbitten from winter, have crept up through wide cracks in a narrow sidewalk leading to a concrete staircase in front of one of the apartment houses. The edges of the stairs have crumbled away and so has the curb separating the property from the street.
The apartment houses do have tenants, but the structures are more than 100 years old.
"The Tenth Street and Locust Street Redevelopment Area suffers from a variety of physical and economic deficiencies including unsanitary and unsafe conditions and deteriorating and inadequate site improvements, which contribute to the area's position today as an economic or social liability to the City of Columbia," the application stated.
Wright said this project wouldn't have been possible until tax-increment financing came along as an option.
"Even with TIF, it will be a long time down the road before the project will realize a profit," he said.
Finally, to meet the third requirement, the applicants said their development would create jobs. About 100 people would be on site every day during construction and, once built, the development would create at least 25 permanent jobs.
It will also bring more than 100 more residents downtown and spur other high-quality projects, the application stated.
Trittenbach would like to see a health-conscious, high-quality grocery store — modeled after a Whole Foods or Trader Joe's but better suited to Columbia's market size — use some of the commercial space.
The application goes to the city's Tax Increment Financing Commission, which will recommend whether the Columbia City Council approve or reject it.