TAXPAYERS FOR TRANSPARENT CAPE GIRARDEAU

FROM LOCAL DEVELOPERS

June 21, 2023

Open Letter to the Editor, the City of Cape Girardeau, and the TIF Commission

RE: West Park Mall

The city of Cape Girardeau (the “City”) has been asked to approve a package of public incentives that include real estate tax and sales tax rebates, along with a Community Improvement District (“CID”) and a Transportation Improvement District (“TDD”), to redevelop the best commercial property in Cape Girardeau (the “Plan”). The developer’s central claim is that without the taxpayer chipping in roughly 50% of the costs, no one will EVER redevelop those 64 prime commercial acres. Never mind that developers like us are investing many, many millions of dollars in this city every year, without reaching into the taxpayers’ pocket.

Based on the Plan, the TIF portion of taxpayer funding is $18.274 million, the CID portion of taxpayer funding is $18.076 million and the TDD portion of taxpayer funding is $12.805 million, for a grand total of approximately $49.2 million. However, when financing costs are accounted for over the term of the TIF, CID, and TDD, also paid using taxpayer dollars, the total TIF cost may be more than $48.745 million, and the total CID and TDD amounts may be up to $57.206 million and $39.843 million respectively. That is an astounding $145.8 million of total taxpayer money that the TIF Commission and the City of Cape Girardeau has been asked to give to a private developer, on a $107 million project. Nothing even close to this size has ever been approved by the City before?

A mall redevelopment plan of the magnitude in front of the TIF Commission on June 21st should have no unanswered questions. Such a plan should be publicly vetted with the utmost transparency. All the answers should be laid out for the public to see. Yet, rather than answers, there are only unanswered questions:

  • First and most obvious is, what is the developer building? The TIF Commission does not seem to know. If the City knows, they aren’t saying. “We cannot tell you now, but trust us,” is not the answer. The public has the right to know how its money will be used, long before it is committed.
  • Did the City retain its own independent financial experts to evaluate the Plan put forth? Independent and objective advice regarding the public benefits of the proposal should be one of the first items on the City’s TIF due diligence checklist. If the City did retain its own experts, who are they and where are those reports?
  • Has the City obtained its own cannibalization study to determine how much existing business can be expected to relocate into the TIF district? After an independent economic study, isn’t a cannibalization study the second item on the City’s TIF due diligence checklist? Moving businesses from tax paying locations to non-tax paying locations does not help the community.
  • Why does the proposed TIF district include approximately 50 acres of parking lots? Building free standing restaurants and retail buildings in the mall parking lot does not help the mall, quite the opposite.
  • How much debt is too much debt? How much additional debt will be placed on the mall? How much of its own capital is the developer putting into the redevelopment? Does the City know? Shouldn’t the City require developers have more of their own capital in a project than taxpayers?
  • How much taxpayer money is too much? Isn’t 50% too much? Once finance costs are included, the amount that taxpayers will be responsible for could be more than $145 million, 145% of the total project costs! The public debt in this Plan is troubling enough, add additional private debt and one must seriously consider the economic viability of the Plan.
  • Why is a TIF even an option? The CID and TDD together generate almost $31 million, net of financing costs. Isn’t that enough to accomplish a successful redevelopment? Isn’t that enough before the City starts taking from the schools, libraries, fire department, law enforcement, and city infrastructure, just to name a few?
  • Did the City negotiate at all on behalf of the taxpayer to limit the tax giveaway? Did the City do everything possible to avoid freezing funding for public schools, libraries, and other tax districts for 23 years. The developer’s want the taxpayer’s money to reach their preferred return of 10.91%, they want theirs up front. The public schools and other taxing districts get the leftovers, 23 years from now.
  • Perhaps most importantly, what is the City’s policy for approving the giveaway of millions of taxpayer dollars? What are the criteria the City uses to evaluate a developer’s project? How does the City determine what is the right project and how much is the correct amount? Satisfying the Missouri statute is the bare minimum, surely the City requires more than bare minimum.

These are just some of the questions raised by this Plan. For either the TIF Commission or the City Council, a vote to approve this Redevelopment Plan means that they have no unanswered questions, they know the answer to all of the questions listed above. Can they honestly say that you have done all the due diligence that a steward of taxpayer funds must do before it can commit those funds to private use. We all know the answer to that question.

The undersigned are local businesses, developers, and citizens living and investing in the Cape Girardeau community. We welcome competition and in fact, we compete with each other and many other good businesses in the area on a daily basis. But on a level playing field. And we are out there every day working to bring new economic opportunities, development, and investment to our area. Many of us are actively working on opportunities with users now being whispered in connection with the Plan.

We do not undertake this letter lightly. Where appropriate for public infrastructure and similar, we too have taken part in development agreements with the City and would welcome the chance to compare such side-by-side with the Plan. Suffice to say, there is no comparison for this giveaway. Let’s get to work on a responsible mall revitalization conducted in the light of day with community input.

We encourage the citizens of this area to examine the mall plan (though the City hasn’t made it easy to find) and decide for yourself. Tell your council members, tell City officials, tell the TIF Commission — stop mortgaging our future! Be there, at the Osage Center on June 21 at 3:30 p.m., and make your voice heard. Say no to this irresponsible giveaway.

Respectfully submitted,

 

MidAmerica Hotels Corporation

By:_____________________
Diane Drury-Janet, Vice President

Drury Development Corporation

By:_____________________
Tim Drury, President

The Rhodes Group

By:_____________________
Scott Rhodes, Co-Owner

Drury Southwest, Inc

By:_____________________
Kevin Whitfield, President