COLUMBIA — The Tax Increment Financing Commission voted to recommend approval to the City Council for the TIF applications of both The Tiger Hotel and the Tenth and Locust project during the commission's meeting Tuesday afternoon.
The commission voted 5-4 to approve the Tiger Hotel application and offered two formal recommendations to the council — to reduce the time the TIF is in place below the maximum 23 years allowed as well as to give local tax districts, like the school district, benefits on the inflationary increases in the base assessed value.
The Tenth and Locust project passed 6-4 with the same recommendations as the Tiger.
The board addressed several of the dominant concerns from the commission’s public hearing last week. Commissioner Steve Erdel asked for attorney Mark Grimm, who is special council for the city on this project, to address the concerns about the situation should either project fail.
“The city has no financial responsibility on either project," Grimm said. "One hundred percent of the financial responsibility is going to be borne by the project."
Questions of conflicts of interest have been raised about the make-up of the commission, especially after the resignation last week of commissioner Jay Burchfield, a Boone County National Bank board member. Burchfield cited future potential conflicts of interest.
Bank presidents and board members from Commerce Bank, Boone County National Bank and Landmark Bank are represented on the board. Commissioner Teresa Maledy, Commerce Bank president, was the only commissioner who chose to abstain from one of the votes. Maledy didn’t vote on The Tiger Hotel project because the developers' financing for the project is directed through Commerce.
Financing for the Tenth and Locust project would be handled through Providence Bank, developer Nathan Odle said.
Landmark Bank President Andrew Beverly said that it was “hard to imagine” any situation that would come before the commission that the bankers might not have an indirect involvement.
“(Indirect involvement) is not unusual where community banks are as strong as they are here,” Beverly said.
Four of the five non-mayoral appointees to the commission voted against the proposals. The four who dissented — Tom Rose, Jim Ritter, Tom Schauwecker and Ernie Wren — are the only commission members who are not local bank presidents or serving on the board of directors of any community banks. All of the commissioners who voted in favor of the applications are bank presidents or on the board of directors of community banks.
Rose and Ritter, the Columbia School Board appointees, said that after the board meeting Monday night, they had to change their original stance on the projects, which was to show support if they were passed in the name of long-term gains.
“General statement was, 'How can you expect us to support school tax issues in the future if you’re willing to give up tax dollars?'” Ritter said.
Ritter discussed how the significant impact property taxes have on the school district’s funding was another issue that weighed heavily on the board’s mind Monday night.
“The feeling is that in a few years, less than 23 projects of this type might be developed of which the school district would get property taxes,” Ritter said.
Schauwecker, Boone County assessor, expressed “philosophical issues” with Tax Increment Financing for these two projects.
"Both of the applicants have extraordinary records; both of the applicants are extraordinary business people,” Schauwecker said. “But I got to go back to Walter Johnson from my Econ 51 class at the University of Missouri. We read a book ‘There’s No Such Thing as a Free Lunch’ — somebody has to pay.”
Beverly questioned Schauwecker’s stance and said the commission’s job was to determine where TIFs are applicable, not if they “were worth doing or not.”
Wren, a Boone County appointee, echoed Schauwecker’s philosophical issues but also had concerns about the financial aspects of the projects.
“Developments are going to start lining up,” Wren said. “We must carefully choose where the TIFs are appropriate.”
Assistant City Manager Tony St. Romaine said the issues are tentatively scheduled to appear on the City Council’s agenda for the second meeting in July.
Schauwecker wasn’t surprised at the passage Tuesday and said that since City Council created provisions for TIFs to take place, they were likely to support it.
“I think they’re going to slam-dunk it,” Schauwecker said.