The Sunrise Beach TIF Commission recommended approval of a proposal by Super Market Developers, Inc. to extend the tax increment financing (TIF) plan at Sunrise Beach Market Center two years.
TIF Commissioner Cliff Luber, the 2nd District Associate Camden County Commissioner, was the lone vote against the extension. Commissioners voting for it included resident John Reed, Camden County Presiding Commissioner Kris Franken, business owner Ron Duggan, Lake of the Ozarks Watershed Alliance Executive Director Donna Swall, Lake West Chamber Executive Director Mike Kenagy, business owner Rick Escobedo, Camdenton R-III Superintendent Tim Hadfield and Sunrise Beach Fire Chief Dennis Reilly. Commissioners Larry Martin, business owner, and John Beckett, Camdenton R-III Board of Education, did not attend the meeting.
The center is anchored by Woods Supermarket which opened in late May. Other retail at the location has yet to be developed.
If passed by the Sunrise Beach Board of Trustees - which is likely with the stamp of approval from the commission - the TIF would be active for 19 years.
By state statue RSMo Section 99.845, the legal limitation of any TIF is 23 years.
A TIF captures property tax and sales tax revenue to help offset specific challenges to development - site excavation and professional fees in the case of Sunrise Beach Market Center - to make a project feasible.
The base tax income at the time of implementation is not affected by a TIF. It is only additional revenue from the improvement — the increment above the base — that is committed.
In the Sunrise Beach Market Center TIF plan, all of the property tax above the increment was committed to the project except for the Camdenton R-III School District and Sunrise Beach Fire Protection District which are receiving half of the increment.
Half of the current sales tax collected at the store as well as the sales tax from the CID overlay are also being collected for the TIF.
At the conclusion of the TIF, the full amount of taxes will be collected for the various political subdivisions and the CID and its additional tax will be dissolved.
The extra two years of the TIF would provide an additional $454,000 in tax revenue to Super Market Developers to cover unanticipated site development expenses.
According to Super Market Developers, Inc. Vice President Scott Wilmoski, site development including excavation but not the paving and lighting of the parking lot wound up about $1.4 million over budget due in part to the complications of a cell tower owned by another individual.
The TIF district carves around a cell tower across from Route F. Attempts to buy the cell tower to move it were unsuccessful, Wilmoski said.
So the excavation had to go around the cell tower property with a large retaining wall. Actual bids to build a retaining wall around the cell tower site across from Route F ended up much higher than the initial estimates, he said. The developer's engineer also underestimated excavation costs, according to Wilmoski.
The cost for excavation and grading along with the retaining wall soared from an estimated $5 million to an actual cost of approximately $6.3 million. Then another $150,000 had to be paid to AT&T for them to move their lines to the tower.
A Community Improvement District overlay of the site also charges an additional sales tax at the market center. Over the summer, the CID board approved an increase of the sales tax rate from 3/4 cent to 1 cent. That increase is estimated to give the developers another $256,000 over the lifetime of the CID/TIF.
The $710,000 from the TIF extension and CID sales tax increase covers about half the cost of the overruns in site development. The other half will be paid by the developer. With the Village of Sunrise Beach receiving a large grant for the first phase of sewer through town, sewer impact fees on the development have also been taken out of the TIF plan.
The development went over its overall budget of $16 million by almost $3 million.
In addition to overruns from site preparation, the building itself was overbudget by $1.1 million. The developer is absorbing those costs.
TIF collections overall are estimated to increase from the original $6,640,000 to $7,350,000.
Despite the overruns, Wilmoski said Associated Wholesale Grocers and Woods are happy with the new location.
He estimated total sales at the store were close to $12 million over the seven months it has been open.
The store hit sales projections for summer, but have been impacted by road construction this fall, Wilmoski said. The development team believes, however, that next summer will be even better as more people become aware of the store and sales will continue to improve as they move forward with developing out the rest of the TIF area, hopefully in 2015.