COLUMBIA — The first two projects to come before the City Council requesting tax-increment financing assistance were unanimously approved early Tuesday morning after lengthy public comment and discussion by the council.
The vote means that developers of the projects — an $8.9 million conversion of The Tiger into a boutique hotel and a $17.1 million mixed-use building at Tenth and Locust streets — will be able to use some of the increased taxes their developments generate to defray the cost of the projects.
The council's approval came despite opposition from members of the public who spoke at the meeting. Some complained that TIF assistance is unfair because it gives some developers an advantage, while others worried about the impact on Columbia Public Schools and other entities that rely heavily on property tax.
Superintendent Chris Belcher spoke during the public comment to “reiterate opposition” to the two projects.
“Twenty-three years is a long time to wait for the revenue generated by these projects,” Belcher said.
Council members, however, said that the deferral of property taxes on the improvements wouldn’t harm the school district in the immediate future and that it would only help the district in the long run.
Others worried that approval of tax-increment financing would lead the way to a significant increase in redevelopments funded in part by the incentive.
“If we open the TIF floodgates, we don’t know what will actually flow,” said Arnie Fagan, a downtown business owner.
Council members cited the “catalytic nature” of these two projects, emphasizing that approval of the two TIF proposals wouldn’t mean the city is open to any project getting the same sort of assistance.
“We need to use it very sparingly and carefully and cautiously,” said Barbara Hoppe, Sixth Ward councilwoman.
Supporters who spoke to the council focused on the credibility of the developers involved with the proposals and the huge impact the projects could have downtown.
Mary Wilkerson of the Special Business District Board of Directors urged the council to build up downtown instead of encouraging growth farther out in the community.
Tax-increment financing for The Tiger Hotel renovation, proposed by owners John Ott, Al Germond and David Baugher, won the council's unanimous approval. The project will capture about $1.7 million in tax-increment financing.
First Ward Councilman Paul Sturtz said that TIF is appropriate for “game-changing projects” and that the “landmark” Tiger Hotel is a perfect example of that.
“This is not going to be like every other hotel in town,” Sturtz said.
The Tiger Hotel’s location on Eighth Street was also an important point for council members. Mayor Darwin Hindman said he’d like to see the same amount of activity on Eighth Street as he sees now on Ninth Street. Eighth Street, he said, is “underutilized.”
Nathan and Jonathan Odle, doing business as Trittenbach Development, proposed the Tenth and Locust project. It also won unanimous approval. Trittenbach plans to create a mixed-use building with space for parking, offices, 58 apartments and a grocery store. The project is expected to capture up to $3.3 million through tax-increment financing.
"A grocery store is something this community has wanted for a long time,” Nathan Odle said. “We are committed to come and take the risk to run this grocery store. We feel like this is an important amenity to get people living downtown.”
Tax-increment financing freezes taxes on property at their current rate then funnels some of the additional property tax revenue that results from improvements back into the development. TIF also allows developers to capture up to 50 percent of sales tax revenue, excluding the sales tax on hotel rooms, during a TIF’s time limit.
Tax-increment financing can be used to pay for up to 20 percent of the total cost of a project over 23 years.
The projects must meet certain criteria to be eligible for TIF. Developers especially must show that they would be unable to afford the projects without the TIF assistance. Fourth Ward Councilman Jerry Wade emphasized the importance of that “but-for” clause and said both applicants met the standard.
“If the but-for criteria is not met, the project stops there,” Wade said.
TIF projects also must occur within a “conservation area,” a "blighted area" or an "economic development area." The Tiger Hotel project was classified as a "conservation area" and the Tenth and Locust project as a “blighted area.”
After approval of the Tiger Hotel was passed, downtown business owner Fred DeMarco questioned the council’s understanding of downtown development and of the proposed projects.
“The reason we’re voting how we are is because we’re acutely aware of how we think things are happening downtown,” Second Ward Councilman Jason Thornhill said in response.