Mis

sour

i GFO

ASp

ring

Con

fere

nce

Eco

nom

ic D

evel

opm

ent a

nd R

edev

elop

men

t Inc

entiv

es__

____

____

____

____

____

____

_

Pres

enta

tion

by G

ilmor

e &

Bel

l, P.

C. –

Shan

non

Cre

ight

on &

Ric

k M

cCon

nell

Gilm

ore

& B

ell,

P.C

.

49 L

awye

rs –

Kan

sas C

ity, S

t. Lo

uis,

Wic

hita

, Lin

coln

2010

Mun

icip

al L

ong-

Term

Issu

es -

$7.1

0 B

illio

n

2010

Ran

king

s (ac

cord

ing

to T

hom

pson

Reu

ters

):

171

1D

olla

rV

olum

e:

11

1N

umbe

r of

Issu

es:

Nat

ion

Kan

sas

Mis

sour

i

2

Prim

ary

Eco

nom

ic

Dev

elop

men

t Too

ls

Tax

Aba

tem

ent a

nd R

edire

ctio

nTa

x In

crem

ent F

inan

cing

Cha

pter

353

Cha

pter

100

Sale

s Tax

Reb

ate

Agr

eem

ents

Spec

ial T

axin

g D

istri

cts

Com

mun

ity Im

prov

emen

t Dis

trict

Tran

spor

tatio

n D

evel

opm

ent D

istri

ct

Nei

ghbo

rhoo

d Im

prov

emen

t Dis

trict

Indu

stria

l Rev

enue

Bon

ds

Wha

t is

Tax

Incr

emen

t Fin

anci

ng?

A m

etho

d of

div

ertin

g ta

xes t

o pa

y fo

r cos

ts

asso

ciat

ed w

ith b

uild

ing

the

proj

ect

Paym

ents

in L

ieu

of T

axes

(PIL

OTs

)10

0% o

f PIL

OTs

cap

ture

dEc

onom

ic A

ctiv

ity T

axes

(EA

Ts)

50%

of E

ATs

cap

ture

dSa

les t

axes

, util

ity ta

xes

$$ d

epos

ited

in S

peci

al A

lloca

tion

Fund

cre

ated

fo

r the

TIF

Pla

n

4

Incr

emen

t

-Tot

al A

sses

sed

Val

ue A

fter

Dev

elop

men

t -$1

00,0

00-T

otal

Lev

y -$

5.00

/$10

0 of

A

sses

sed

Val

ue-T

otal

Rev

enue

-$5

,000

-Tot

al In

crem

ent -

$4,9

50

(PIL

OT’

S)

Bas

e

-Pro

perty

Ass

esse

d V

alue

-$1

,000

-Tot

al L

evy

-$5.

00/$

100

of

Ass

esse

d V

alue

-Tot

al T

ax R

even

ue -

$50

$50

Bas

e(r

ecei

ved

by ta

xing

di

stri

cts)

$50

Bas

e(r

ecei

ved

by ta

xing

di

stri

cts)

$4,9

50In

crem

ent

(PIL

OT

’S)

Am

ount

Rem

ains

Con

stan

t

Am

ount

Cha

nges

Bas

ed o

nV

alua

tion

The

Bas

e an

d th

e In

crem

ent (

PIL

OT

S)B

efor

e TI

FD

urin

g TI

F

5

Incr

emen

t

-Add

ition

al E

ATS

ge

nera

ted

from

eco

nom

ic

activ

ities

in th

e re

deve

lopm

ent a

rea

-$1

00,0

00

Bas

e

-EA

TS c

olle

cted

prio

r to

TIF

-$1,

000

$1,0

00B

ase

(rec

eive

d by

ta

xing

dist

rict

s)

$1,0

00B

ase

(rec

eive

d by

ta

xing

dist

rict

s)

$50,

000

Incr

emen

tca

ptur

ed b

y TI

F

Am

ount

Rem

ains

Con

stan

t

Am

ount

Cha

nges

Bas

ed o

n EA

TSG

ener

ated

The

Bas

e an

d th

e In

crem

ent (

EA

TS)

$50,

000

Incr

emen

tco

llect

ed b

y ta

xing

dis

tric

ts

Bef

ore

TIF

Dur

ing

TIF

6

Cha

pter

353

Tax

Aba

tem

ent

Urb

an R

edev

elop

men

t Cor

pora

tion

Form

edPr

oper

ty T

ax A

bate

men

tPr

oper

ty m

ust b

e tra

nsfe

rred

thro

ugh

the

corp

orat

ion

Full

stat

utor

y ab

atem

ent f

or 1

0 ye

ars o

ver v

alue

of l

and

excl

usiv

e of

impr

ovem

ents

50%

stat

utor

y ab

atem

ent f

or a

dditi

onal

15

year

s on

tota

l im

prov

ed v

alue

No

pers

onal

pro

perty

aba

tem

ent

Req

uire

s red

evel

opm

ent p

lan

and

“blig

ht”

findi

ng

7

Sale

s Tax

Reb

ate

Agr

eem

ents

•A

ltern

ativ

e to

TIF

•R

eim

burs

e co

sts o

f pub

lic im

prov

emen

ts

mad

e in

ass

ocia

tion

with

priv

ate

proj

ect

•In

crem

enta

l sal

es ta

x re

venu

es fr

om th

e ne

w p

roje

ct a

re u

sual

sour

ce o

f re

paym

ent

•D

ocum

ente

d by

sim

ple

cont

ract

--no

pl

ans o

r oth

er fo

rmal

ities

8

Cha

pter

100

Tax

Aba

tem

ent

Adv

anta

ges o

ver C

h. 3

53

No

inde

pend

ent c

orpo

ratio

n ne

eded

Aba

tem

ent o

f rea

l and

per

sona

l pro

perty

ava

ilabl

e

No

blig

ht fi

ndin

g

Req

uire

s cos

t/ben

efit

anal

ysis

and

not

ice

to ta

xing

dis

trict

s with

pub

lic h

earin

g

Proj

ects

may

incl

ude:

War

ehou

ses

Off

ice

Indu

stria

l Pla

nts

Com

mer

cial

(Mo.

Con

st. A

rt. V

I, Se

c. 2

7(b)

)

9

Tra

nspo

rtat

ion

Dev

elop

men

t Dis

tric

ts

Wid

ely

used

thro

ugho

ut th

e St

ate

Form

ed a

s a se

para

te p

oliti

cal s

ubdi

visi

on

with

a b

oard

of d

irect

ors

Rev

enue

s can

incl

ude

TDD

impo

sed

prop

erty

tax,

sale

s tax

and

spec

ial

asse

ssm

ents

Proj

ects

mus

t be

trans

porta

tion

impr

ovem

ents

10

Com

mun

ity Im

prov

emen

t Dis

tric

ts

Sepa

rate

pol

itica

l sub

divi

sion

or n

on-p

rofit

co

rpor

atio

n w

ithin

a d

efin

ed g

eogr

aphi

c ar

ea th

at h

as

the

pow

er to

col

lect

reve

nues

and

spen

d on

pub

lic

impr

ovem

ents

and

serv

ices

Cre

ated

by

a ci

ty o

r cou

nty

but o

pera

tes w

ith it

s ow

n go

vern

ing

body

U

sed

to p

ay fo

r im

prov

emen

ts a

nd se

rvic

es w

ith

loca

lized

ben

efit

11

TD

Dsa

nd C

IDs

CID

’s•

Sepa

rate

Leg

al E

ntity

(Pol

itica

l Su

bdiv

isio

n or

Non

prof

it C

orpo

ratio

n) a

nd B

oard

of

Dire

ctor

s•

Cre

ated

by

City

Ord

inan

ce•

Bon

ds a

re n

ot o

blig

atio

ns o

f City

•En

joy

a br

oad

rang

e of

pow

ers

•Pr

ojec

t mus

t be

insi

de o

f Dis

trict

•Sa

les T

ax, P

rope

rty T

ax, S

peci

al

Ass

essm

ents

, Fee

s Ava

ilabl

e

TDD

’s•

Sepa

rate

Pol

itica

l Sub

divi

sion

and

B

oard

of D

irect

ors

•C

reat

ed b

y C

ourt

Ord

er•

Bon

ds a

re n

ot o

blig

atio

ns o

f City

•R

even

ues m

ust b

e us

ed fo

r tra

nspo

rtatio

n im

prov

emen

ts•

Proj

ect n

eed

not b

e in

side

of

Dis

trict

•Sa

les T

ax, P

rope

rty T

ax, S

peci

al

Ass

essm

ents

, Fee

s and

Tol

ls

Ava

ilabl

e

12

Nei

ghbo

rhoo

dIm

prov

emen

t Dis

tric

tA

NID

is a

n ar

ea b

enef

ited

by p

ublic

im

prov

emen

ts a

nd a

sses

sed

to p

ay fo

r tho

se

impr

ovem

ents

.A

NID

is n

ot a

sepa

rate

ent

ity –

its a

n ar

ea

desi

gnat

ed b

y th

e C

ity/C

ount

y pu

rsua

nt to

a

requ

est o

f the

pro

perty

ow

ners

.Th

e C

ity/C

ount

y ho

lds a

pub

lic h

earin

g an

d cr

eate

s the

NID

, and

then

impo

ses a

sses

smen

ts in

th

e N

ID a

rea

to p

ay fo

r the

impr

ovem

ents

13

Indu

stri

al R

even

ue B

onds

Bon

ds is

sued

by

City

, Cou

nty

(Cha

pter

100

) or

IDA

Cre

dit o

f Priv

ate

Sect

or n

ot P

ublic

Ent

ityG

ener

al O

blig

atio

n B

ond

optio

n no

t wid

ely

used

14

Com

pany

City

/Cou

nty

Bon

dTr

uste

e

Leas

eIn

dent

ure

Con

stru

ctio

n Le

nder

Bon

dhol

der/C

ompa

ny

Dee

d

Leas

ePa

ymen

ts

Leas

ePa

ymen

ts

Bon

d Pr

ocee

ds

Mor

tgag

eLo

anPr

ocee

dsC

onst

ruct

ion

Loan

Proc

eeds

Fun

d Pu

rcha

se o

f Bon

ds

Bon

dPr

ocee

dsB

ond

Paym

ents

Cha

pter

100

Dia

gram

15

Sam

ple

Proj

ects

16

Proj

ect E

xam

ple:

Indu

stria

l Par

k–

Aba

te re

al p

rope

rty ta

xes t

hrou

gh C

hapt

er 1

00, C

hapt

er 3

53, e

tc.,

but

requ

ire p

aym

ents

in li

eu o

f tax

es (P

ILO

TS) e

qual

to ta

xes p

aid

in th

e ye

ar p

rior t

o re

deve

lopm

ent.

–C

reat

e a

CID

or T

DD

enc

ompa

ssin

g th

e in

dust

rial p

ark

to le

vy a

sp

ecia

l ass

essm

ent e

qual

to th

e am

ount

of t

axes

aba

ted

less

PIL

OTS

).

–U

se th

e pr

ocee

ds o

f the

spec

ial a

sses

smen

t to

pay

for p

ublic

im

prov

emen

ts w

ithin

indu

stria

l par

k.

Com

bini

ng In

cent

ives

: T

ax A

bate

men

t and

Tax

Add

ition

17

TIF

/TD

D P

roje

ct E

xam

ple

$19,

500,

000

City

of R

ichm

ond

Hei

ghts

, Mis

sour

i

Tax

Incr

emen

t and

T

rans

port

atio

n Sa

les

Tax

Ref

undi

ng a

nd

Impr

ovem

ent R

even

ue

Bon

ds

Seri

es 2

005

(Fra

ncis

Pla

ce

Red

evel

opm

ent P

roje

ct

--R

PA 1

)

18

TD

D/C

ID P

roje

ct E

xam

ple

$39,

470,

000

370/

Mis

sour

i Bot

tom

R

oad/

Tau

ssig

Roa

d T

rans

port

atio

nD

evel

opm

ent D

istr

ict

Tra

nspo

rtat

ion

Rev

enue

Bon

ds

Seri

es 2

002

19

Proj

ect E

xam

ples

Zon

aR

osa

Ret

ail

Proj

ect

-TD

DSa

les T

ax p

ays d

ebt

serv

ice

-Use

d to

fund

par

king

ga

rage

s

-Bon

ds is

sued

by

Cou

nty

IDA

20

Proj

ect E

xam

ples

Jans

sen

Plac

eK

ansa

s City

, M

isso

uri

NID

Use

d to

Fun

d In

stal

latio

n of

R

eplic

as o

fH

isto

ricSt

reet

light

s

21

Proj

ect E

xam

ples

Bra

nson

Lan

ding

Pro

ject

-TIF

, TD

Dan

d C

ity P

roje

ct

Rev

enue

s fun

ded

impr

ovem

ents

-Bon

ds is

sued

by

Mis

sour

i D

evel

opm

ent F

inan

ce B

oard

and

C

ity ID

A

22

Proj

ect E

xam

ples

Sum

mit

Woo

ds

-TIF

and

TDD

Bon

ds is

sued

-Als

o ut

ilize

d N

ID’s

as

back

up se

curit

y

23

Inde

pend

ence

Mul

ti-Pu

rpos

e E

vent

s Cen

ter

CID

24

Inde

pend

ence

Mul

ti-Pu

rpos

e E

vent

s Cen

ter

$50

mill

ion

Even

ts C

ente

r

½¢

CID

sale

s tax

Bond

s iss

ued

by M

DFB

2525

“Sta

te B

udge

t Cri

sis L

arge

st T

hrea

t to

U.S

. Eco

nom

y”

Dec

embe

r 19,

201

0

Cur

rent

Mar

ket I

ssue

s

2626

“The

Wea

k G

et W

eake

r as M

uni B

onds

Are

Sol

d O

ff”

(Dec

embe

r 19,

201

0)

“Bon

dhol

ders

Lef

t in

the

Dar

k –

Con

cern

Gro

ws O

ver L

ack

of F

inan

cial

Dis

clos

ure

by S

tate

, Loc

al G

over

nmen

ts”

(Jan

uary

26, 2

011)

“Mun

i Reg

ulat

or L

ooks

at P

ensi

on-D

iscl

osur

e C

once

rns”

(Jan

uary

31,

201

1)

A M

ount

ain

of B

ad P

ress

2727

“Ban

ks U

rged

to R

eass

ess H

oldi

ngs

of M

uni B

onds

”(F

ebru

ary

23, 2

011)

A M

ount

ain

of B

ad P

ress

2828

Rat

ing

Age

ncie

s & C

ongr

ess o

n th

e “W

ar P

ath”

Rat

ing

Age

ncie

s

“Bon

d R

atin

g D

rop

Igni

tes P

ensi

on

Figh

t”(W

SJ -

Febr

uary

10,

201

1)

2929

Rat

ing

Age

ncie

s & C

ongr

ess o

n th

e “W

ar P

ath”

Con

gres

s

“Con

gres

s to

Tack

le S

tate

, Lo

cal F

isca

l Woe

s”(W

SJ -

Febr

uary

8, 2

011)

3030

Mar

ket f

or M

unic

ipal

Bon

ds S

hrin

ks

“Ban

ks G

et T

ough

With

Mun

icip

aliti

es”

(Jan

uary

27,

201

1)

“Sal

es o

f Mun

i Bon

ds S

ink

to 1

0-Y

ear L

ow”

(Feb

ruar

y 1,

201

1)

“Fin

anci

al A

dvis

ers o

n M

unis

: Don

’t Pa

nic!

!”(F

ebru

ary

1, 2

011)

31

Few

er In

vest

ors A

re B

uyin

g M

unic

ipal

Deb

t

32

Few

er B

ank

Let

ters

of C

redi

t

33

Prac

tical

Obs

erva

tions

Con

tinui

ng D

iscl

osur

e is

crit

ical

(oth

er b

reak

out

sess

ion)

Abi

lity

to c

ompl

ete

econ

omic

dev

elop

men

t tra

nsac

tions

is h

eavi

ly im

pact

ed

34

Gui

danc

e on

thes

e an

d ot

her e

cono

mic

dev

elop

men

t too

ls:

Stat

e A

ssis

tanc

e

http

://w

ww

.ded

.mo.

gov/

BD

T/to

pnav

page

s/R

esea

rch%

20To

olbo

x/Fi

nanc

e%20

Gui

de.a

spx

35

Dem

ystif

ying

the

Too

lsfo

r E

cono

mic

Dev

elop

men

t

Five

Rul

es fo

r Nav

igat

ing

Acc

ess

to M

isso

uri’s

Eco

nom

icD

evel

opm

ent P

rogr

ams

36

Dem

ystif

ying

the

Too

lsfo

r E

cono

mic

Dev

elop

men

tRu

le N

umbe

r 1Kn

ow Y

our P

roje

ct o

r Kno

w Yo

ur B

usin

ess P

rosp

ect

–W

hat t

ype

of p

roje

ct d

o yo

u ha

ve?

•B

light

rem

edia

tion

•N

ew c

onst

ruct

ion

•In

fras

truc

ture

•E

xpan

sion

•R

eten

tion

–W

hat b

usin

ess a

ctiv

ity w

ill b

e co

nduc

ted?

–W

hat m

atte

rs m

ost t

o th

e pr

ospe

ct?

–W

hat t

axes

will

be

gene

rate

d?–

How

man

y jo

bs?

37

Dem

ystif

ying

the

Too

lsfo

r E

cono

mic

Dev

elop

men

t

Rule

Num

ber 2

You

Don

’t N

eed

to U

nder

stand

Eve

ry P

rogr

am

–T

he p

rogr

ams a

re to

o di

vers

e an

d to

o co

mpl

ex

–M

ake

your

goa

l to

know

:•

The

pro

ject

det

ails

•T

ype

of a

ssis

tanc

e ne

eded

by

gene

ral c

ateg

ory

•W

hen

to c

all f

or h

elp

•W

ho to

cal

l for

hel

p

38

Dem

ystif

ying

the

Too

lsfo

r E

cono

mic

Dev

elop

men

t

Rule

Num

ber 3

Dev

elop

You

r Net

work

for F

ree

Advi

cePu

blic

and

Pri

vate

Res

ourc

esPu

blic

Res

ourc

es–

DE

D–

MD

FB–

Reg

iona

l Pla

nnin

g C

omm

issi

on–

Cha

mbe

r of

Com

mer

ce–

Loc

al E

cono

mic

Dev

elop

men

t Pro

fess

iona

ls–

Col

lege

and

Uni

vers

ity R

esou

rces

39

Dem

ystif

ying

the

Too

lsfo

r E

cono

mic

Dev

elop

men

tRu

le N

umbe

r 3 -

Cont

inue

dD

evel

op Y

our N

etwo

rk fo

r Fre

e Ad

vice

•U

tility

Com

pani

es

•Pr

ofes

sion

al T

rade

Ass

ocia

tions

–M

isso

uri E

cono

mic

Dev

elop

men

t Cou

ncl(

ME

DC

)–

Mis

sour

i Eco

nom

ic D

evel

opm

ent F

inan

cing

Ass

ocia

tion

(ME

DFA

)–

Mis

sour

i Ass

ocia

tion

of M

unic

ipal

Util

ities

(MA

MU

)

•D

evel

op C

onta

cts a

t Sem

inar

s and

Con

fere

nces

•G

ilmor

e &

Bel

l, P.

C.

40

Dem

ystif

ying

the

Too

lsfo

r E

cono

mic

Dev

elop

men

t

Rule

Num

ber 4

Cate

goriz

e Yo

ur P

roje

ct a

nd P

roje

ct U

ser

–In

cent

ive

Prog

ram

s for

Job

Cre

atio

n Pr

ojec

ts–

Red

evel

opm

ent P

roje

cts

–In

fras

truc

ture

Dev

elop

men

t Pro

ject

s–

Wor

ker

Tra

inin

g In

cent

ives

–C

omm

unity

Dev

elop

men

t Inc

entiv

es–

Bon

d Fi

nanc

ing

Proj

ects

–O

ther

Spe

cial

ized

Pro

ject

s

41

Dem

ystif

ying

the

Too

lsfo

r E

cono

mic

Dev

elop

men

tRu

le N

umbe

r 5M

ove

Conc

erns

Abo

ut C

ompl

exity

to th

e En

d of

the

Proc

ess

–T

here

is a

diff

eren

ce b

etw

een

“bai

t and

switc

h”an

d “b

ait a

nd e

xpla

in”

–U

se c

ompl

exity

to y

our

adva

ntag

e

–T

here

will

be

time

for

disc

laim

ers

42

Part

ing

Tho

ught

Con

side

r dev

elop

ing

a w

ritte

n in

cent

ive

polic

y th

at is

ado

pted

by

the

gove

rnin

g bo

dy

Thes

e ar

e a

grea

t hel

p fo

r ele

cted

off

icia

ls a

nd

staf

f in

eval

uatin

g in

cent

ive

requ

ests

43

Shan

non

Cre

ight

onG

ilmor

e &

Bel

l, P.

C. –

St. L

ouis

scre

ight

on@

gilm

oreb

ell.c

om31

4-43

6-10

00__

____

____

____

____

____

Ric

k M

cCon

nell

Gilm

ore

& B

ell,

P.C

. –K

ansa

s City

rmcc

onne

ll@gi

lmor

ebel

l.com

816-

221-

1000

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stio

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