Loading...
HomeMy WebLinkAbout1869 Approving a Plan for an Industrial Development Project -Chapter 100 Bonds BILL NO. 2022-046 ORDINANCE NO. rO1.0 9 AN ORDINANCE APPROVING A PLAN FOR AN INDUSTRIAL DEVELOPMENT PROJECT. WHEREAS, the City of Riverside, Missouri, a fourth-class city and political subdivision of the State of Missouri (the "City"), is authorized and empowered pursuant to the provisions of Article VI, Section 27(b) of the Missouri Constitution, as amended, and Sections 100.010 through 100.200, inclusive,of the Revised Statutes of Missouri,as amended(RSMo)(collectively,the"Act"), to purchase, construct, extend and improve certain projects(as defined in Section 100.010 RSMo) and to issue industrial development revenue bonds for the purpose of providing funds to pay the costs of such projects and to lease or otherwise dispose of such projects to private persons or corporations for manufacturing, commercial, warehousing and industrial development purposes upon such terms and conditions as the City shall deem advisable; and WHEREAS, Section 100.050 RSMo requires the City to prepare a plan in connection with any industrial development project undertaken pursuant to the Act; and WHEREAS, a Plan for an Industrial Development Project (the "Plan")was mailed to the taxing jurisdictions on August 16, 2022,along with notice of a public hearing to be held by the City on September 6, 2022; and WHEREAS, on September 6, 2022 the public hearing on the Plan was held by the City and public comment was taken; and WHEREAS,the Board of Aldermen hereby finds and determines that it is desirable for the improvement of the economic welfare and development of the City and within the public purposes of the Act that the City approve the Plan; and NOW,THEREFORE, BE IT ORDAINED BY THE BOARD OF ALDERMEN OF THE CITY OF RIVERSIDE, MISSOURI,AS FOLLOWS: SECTION 1 —APPROVAL OF PLAN. The City hereby approves the Plan attached hereto as Exhibit A. SECTION 2 - FURTHER AUTHORITY. The City shall, and the officials, agents and employees of the City are hereby authorized to, take such further action, and execute such other documents, certificates and instruments as may be necessary or desirable to carry out and comply with the intent of this Ordinance and the Plan. SECTION 3 - EFFECTIVE DATE. This Ordinance shall be in full force and effect from and after its passage and approval. (remainder of page intentionally left blank] BE IT REMEMBERED that the above was read two times by heading only, passed and approved by a majority of the Board of Aldermen and APPROVED by the Mayor of the City of Riverside, Missouri, this 6th day of September 2022. ?hith ;�//�itinh L. Rose, Gl.dQ,P or ATTEST: Robin Kincaid, ity Clerk -2- BILL NO. 2022-046 ORDINANCE NO. Exhibit A PLAN FOR AN INDUSTRIAL DEVELOPMENT PROJECT NOTICE TO TAXING JURISDICTIONS To: Taxing Jurisdictions(Distribution List attached) Re: Notice of Public Hearing—TLI Real Estate Project On behalf of the City of Riverside,Missouri("City"),please find enclosed a copy of the proposed Plan for an Industrial Development Project for the TLI Real Estate Project ("Plan"), which also contains a Cost Benefit Analysis on the affected taxing jurisdictions. The Plan provides for a sales and use tax exemption on construction materials,but no property tax abatement. The City anticipates considering an Ordinance to approve the Plan at its regular meeting on September 6,2022 at 7:00 PM in the Board of Aldermen Chambers at City Hall,2950 NW Vivion Road,Riverside,Missouri. The City invites all affected taxing districts to attend the meeting and to make oral comments on the proposed Plan to the City or to provide written comments to the City on the Plan prior to the meeting. All comments of the taxing districts will be fairly and duly considered by the City. A copy of the Plan and Cost Benefit Analysis for the proposed Project is enclosed and also will be on file in the office of the City Clerk and will be available for public inspection during normal business hours. Any questions should be directed to Mike Duffy,Director of Community Development for the City at(816)741-3993. CITY OF RIVERSIDE, MISSOURI 2950 NW Vivion Road Riverside,Missouri City of Riverside Park Hill School District R-V Director of Finance Superintendent 2950 N.W.Vivion Road 7703 NW Barry Road Riverside,MO 64150 Kansas City,MO 64153 Platte County Board of Services for the Tri-County Mental Health Services,Inc. Developmentally Disabled Chair Executive Director 3100 NE 83`d Street,Suite 1001 7900 NW 106"'Street Kansas City,MO 64119-9998 Kansas City,MO 64153 Platte County Assessor Mid-Continent Public Library 415 Third Street,Suite 114 Director Platte City,MO 64079 15616 E. Highway 24 Independence,MO 64050-2057 Platte County Platte County Senior Fund Presiding Commissioner 11724 NW Plaza Circle, Suite 600 415 Third Street,Suite 210 Kansas City, MO 64153 Platte City,MO 64079 Platte County Collector Missouri Department of Revenue 415 Third Street,Suite 212 Taxation Division Platte City,MO 64079 301 West High Street Jefferson City,MO 65101 Platte County Health Department Missouri Director of Revenue 212 Marshall Road County Tax Section Platte City,MO 64079 Merchants/Manufacturers Replacement Tax Fund P.O. Box 453 Jefferson City,MO 65 1 02-04 5 3 Parkville Special Road District Missouri Department of Revenue 7101 NW Hampton Road County Tax Section Parkville, MO 64152 Blind Pension Fund P.O.Box 455 Jefferson City,MO 65105 Metropolitan Community College Chancellor 3200 Broadway Kansas City,MO 64111 CITY OF RIVERSIDE, MISSOURI PLAN FOR AN INDUSTRIAL DEVELOPMENT PROJECT AND COST-BENEFIT ANALYSIS (SALES TAX EXEMPTION ONLY ON CONSTRUCTION MATERIALS) FOR THE TLI REAL ESTATE PROJECT MAILED:August 16,2022 I. PURPOSE OF THIS PLAN The Board of Aldermen of the City of Riverside,Missouri(the"'City")will consider an ordinance approving this Plan for an Industrial Development Project and Cost-Benefit Analysis (the "Plan") for an industrial development project consisting of improving an existing warehouse space for use as a manufacturing and distribution facility (the"Project") as more fully described herein. This Plan calls for the issuance by the City of taxable industrial development revenue bonds in an aggregate principal amount not to exceed$17,050,000(the"Bonds")with respect to the Project. The Bonds will be issued pursuant to the provisions of Article VI,Section 27(b)of the Missouri Constitution,as amended and Sections 100.010 to 100.200 of the Revised Statutes of Missouri, as amended(collectively,the"Act"). This Plan has been prepared to satisfy requirements of the Act and to analyze the potential costs and benefits, including the related tax impact on all affected taxing jurisdictions, of using industrial development revenue bonds to finance the Project and to facilitate the exemption from sales and use tax of purchases of construction materials for the Project. II. GENERAL.DESCRIPTION OF CHAPTER 100 FINANCINGS General. The Act authorizes cities,counties, towns and villages to issue industrial development revenue bonds to finance the purchase, construction, extension and improvement of warehouses, distribution facilities, research and development facilities, office industries, agricultural processing industries, service facilities that provide interstate commerce, industrial plants and other commercial facilities. Issuance and Sale of Bonds. Revenue bonds issued pursuant to the Act do not require voter approval and are payable solely from revenues received from the project.The municipality issues its bonds and in exchange,the benefited company promises to make payments that are sufficient to pay the principal of and interest on the bonds as they become due. Thus, the municipality merely acts as a conduit for the financing. Concurrently with the closing of the bonds, the company will convey to the municipality title to the property included in the project. The municipality must be the legal owner of the property while the bonds are outstanding. At the same time, the municipality will lease the property, including the project, back to the benefited company pursuant to a lease agreement. The lease agreement will require the company,acting on behalf of the municipality,to use the bond proceeds to pay the costs or reimburse the costs of purchasing,constructing and installing the project,as applicable. Under the lease agreement,the company typically:(I)will unconditionally agree to make payments sufficient to pay the principal of and interest on the bonds as they become due; (2) will agree, at its own expense,to maintain the project,to pay all taxes and assessments with respect to the project,and to maintain adequate insurance; (3) has the right, at its own expense, to make certain additions, modifications or improvements to the project; (4)may assign its interests under the lease agreement or sublease the project while remaining responsible for payments under the lease agreement; (5) will covenant to maintain its corporate existence during the term of the bond issue;and(6)will agree to indemnify the municipality for any liability the municipality might incur as a result of its participation in the transaction. Property Tax Exemption. Under Article X, Section 6 of the Missouri Constitution and Section 137.100 of the Revised Statutes of Missouri, all property of any political subdivision is exempt from taxation. In a typical transaction,the municipality holds fee title to the project and leases the project to the benefited company. If the municipality and the company determine that partial tax abatement is desirable,the company may agree to make"payments in lieu of taxes" The amount of payments in lieu of taxes is negotiable. The payments in lieu of taxes are payable by December 31 of each year,and are distributed to the municipality and to each political subdivision within the boundaries of the project in the same manner and in the same proportion as property taxes would otherwise be distributed under Missouri law. Under this Plan, no property tax abatement is being provided, so a payment in lieu of tax will be made by the benefitted company in each year in an amount calculated to be equal to the taxes that would otherwise be due on the property. The area in which the Project will be located is subject to a tax increment financing plan. For this reason,payments in lieu of taxes made by the benefitted company will be captured and applied as tax increment financing revenues. III. DESCRIPTION OF THE PARTIES The Company. TLI Real Estate Holdings, LLC, and any assignee or designee thereof that may enter into a lease with the City for the Project (collectively, the "Company") will benefit from this Plan. TLI Real Estate Holdings,LLC is a limited liability company organized and existing under the laws of the State of Missouri,whose operations center around manufacturing and distribution. City of Riverside, Missouri. The City is a fourth-class city and municipal corporation organized and existing under the laws of the State of Missouri. The City is authorized and empowered pursuant to the provisions of the Act to purchase,construct,extend and improve certain projects(as defined in the Act) and to issue industrial development revenue bonds for the purpose of providing funds to pay the costs of such projects and to lease or otherwise dispose of such projects to private persons or corporations for manufacturing, commercial, warehousing and industrial development purposes upon such terms and conditions as the City deems advisable. IV. REQUIREMENTS OF THE ACT Description of the Project. The Project to be financed by the Bonds consists of the construction and installation of improvements to an existing warehouse for use as a manufacturing and distribution facility. The location of the Project is 5.33 acres with an address of 4300 NW Belgium Boulevard in Riverside,Missouri(the"Project Site"). Estimate of the Costs of the Project The Project is expected to cost approximately S17,050,000, with$10,000,000 estimated to be spent on construction materials. The Project is expected to be constructed during the years 2022 through 2023. Source of Funds to be Expended for the Project. The sources of funds to be expended for the Project will be the proceeds of the Bonds in an approximate principal amount not to exceed $17,050,000, to be purchased by the Company(the`Bondholder")and,if needed,other available funds of such Company. The Bonds will be payable solely from the revenues derived by the City from the lease or other disposition of the Project (as further described below). The Bonds will not be an indebtedness or general obligation, debtor liability of the City or the State of Missouri. Statement of the Terms Upon Which the Project is to be Leased or Otherwise Disposed of by the City. The City will hold title to the Project Site under the Chapter 100 transaction. The City will lease the _2_ Project to the Company for lease payments equal to the principal and interest payments on the Bonds. Under the terms of the lease agreement with the City, the Company will have the option to purchase the Project at any time and will have the obligation to purchase the Project at the termination of the lease. The lease between the City and the Company will terminate after Project completion. Affected School District, Community College District, County, City, and Emergency Services Districts. The Park Hill School District is the school district affected by the Project. Platte County, Missouri is the county affected by the Project. Metropolitan Community College is the community college district affected by the Project. The City is the city affected by the Project. No ambulance or fire district is affected by the Project. The Cost-Benefit Analysis attached hereto identifies all other taxing districts affected by the Project. Assessed Valuation.The most recent equalized assessed valuation of the Project Site is$1,501,897. The estimated total equalized assessed valuation of the Project Site after construction of the Project(2024) is$6,971,935. Payments in Lieu of Taxes. If this Plan is approved by the Board of Aldermen, the City intends to issue the Bonds in 2022. The Bonds are being issued for the sole purpose of providing sales and use exemption on construction materials and no property tax abatement will be provided. During the time that the Bonds are outstanding,the Project will be under construction and the Company will pay a payment in lieu of taxes calculated to be equal to 100%of the real property taxes due on the Project in each year. After completion of the Project, it will be placed back on the tax rolls. The Project Site is within the redevelopment area established by the City's L-385 Levee Redevelopment Plan (the "TIF Plan"). Incremental property tax revenues, including payments in lieu of taxes generated pursuant to this Plan, will be captured as tax increment financing("TIF) revenues for application in accordance with the TIF Plan. For this reason,it is not anticipated that any payments in lieu of taxes generated pursuant to this Plan will be distributed to the taxing districts in excess of the base tax amount currently so distributed. The 2021 distribution of base taxes and TIF revenues was as shown below from the 2021 real estate tax receipt for the Project Site. in Dined Lary per$100 MOM In SYY BM Pension Fund Count/ 0.0600 Leo Kiln DepWiwe 0.0729 013 PC Boni tl eves mr pw Wend 01166 1.19 farm mom 100911 0.91 uat/ 3.0 se,lrul..L.' 10•157� pas r.s lan xnnni 5.i9ss 5306 .a nada inn paxx tx Mnrptlnw W mmry casgn 02028 9m wu SMl.na..,rr, 02600 aw ii 104.108.45 104,556.08 -3- Sales and Use Tax Exemption on Construction Materials. Qualified building materials purchased for the construction of the Project are expected to be exempt from sales and use tax pursuant to the provisions of Section 144.062 of the Revised Statutes of Missouri and the underlying bond documents upon delivery of a project exemption certificate by the City to the Company. The anticipated cost of this exemption to taxing jurisdictions levying a sales or use tax is shown below: Sales/Use Taxes Taxing Jurisdiction Tax Rate Abated State of Missouri 4.225% $422,500 Platte County 1.375% $137,500 City of Riverside 1.500% $150,000 Total 7.100% $710,000 Cost-Benefit Analysis. In compliance with Section 100.050.2(3) of the Revised Statutes of Missouri, this Plan has been prepared to show the costs and benefits to the City and to other taxing jurisdictions affected by the Project. The attached Cost-Benefit Analysis shows the direct tax impact the Project is expected to have on each taxing jurisdiction. This Plan does not attempt to quantify the overall economic impact of the Project. V. ASSUMPTIONS AND BASIS OF PLAN In preparing this Plan, key assumptions have been made to estimate the fiscal impact of the exemptions proposed for the Project. See ATTACHMENT A for a summary of these assumptions. Information necessary to complete this Plan, has been famished by representatives of the City, representatives of the Company and its counsel,the Bondholder and other persons deemed appropriate and such information has not been independently verified for accuracy,completeness or fairness. * * * -4- ATTACHMENT A SUMMARY OF KEY ASSUMPTIONS In addition to the assumptions described in the Plan and the Cost-Benefit Analysis,the following assumptions have been made in preparing the Cost-Benefit Analysis: 1. Commercial real property taxes are calculated using the following formula: (Assessed Value/ 100) •Tax Rate 2. The assessed value of the Project is calculated using the following formula: Estimated Value ' Assessment Ratio of 32% 3. The tax rates used in this Plan reflect the rates in effect for the tax year 2021. The tax rates were held constant through the years shown in the Cost-Benefit Analysis. The actual payments in lieu of taxes imposed pursuant to the Plan will be based on the current levy rates in each year. 4. The assessments imposed by the Riverside Quindaro Bend Levee District are not affected by ownership of the Project Site by the City and will continue to be imposed upon the Project Site during the term of the Bonds. The Company will be responsible for payment of such assessments. 5. The years shown in the Cost-Benefit Analysis are for demonstration purposes only and the years during which construction occurs may vary based on actual implementation of the Project. * * * A-I City of Riverside,Missouri (TLI Real Estate Project) COST BENEFIT ANALYSIS PLAN FOR INDUSTRIAL DEVELOPMENT PROJECT The Project Site is within the redevelopment area established by the City's L-385 Levee Redevelopment Plan (the"TIE Plan"). Incremental property tax revenues,including payments in lieu of taxes generated pursuant to this Plan,will be captured as tax increment financing("TIE")revenues for application in accordance with the TIE Plan. For this reason, it is not anticipated that any payments in lieu of taxes generated pursuant to this Plan will be distributed to the taxing districts in excess of the base tax amount currently so distributed. The 2021 distribution of base taxes and TIF revenues was as shown in the attached Plan under the heading Payments in Lieu of Taxes. GILMOkEBELL Table of Contents Project Assumptions Summary of Cost Benefit Analysis 2 Projected Tax Revenues without Project 3 Projected Tax Revenues with Project 4 Projected PILOT Amount 5 Projected Tax Abatement 6 -ibis information is provided based on the factual information and assumptions provided to Gilmore&Bell,P.C.by a party to or a representative of a party to the proposed transaction.This information is intended to provide factual information only and is provided in conjunction with our legal representation.It is not intended as financial advice or a financial recommendation to any party.Gilmore&Bell,P.C.is not a financial advisor or a"municipal advisor" as defined in the Securities Exchange Act of 1934.as amended. City of Riverside,Missouri (TLI Real Estate Project) Cost Benefit Analysis 7/14/2022 • Project Assumptions • Initial year taxes assessed 2022 • 2021 Assessed Value $ 1,501,897 • Annual investments in the new project 2022 $ 6,000,000 2023 11,000,000 • Bi-annual growth rate of appraised value of real property 2.0% • Assessed value as a percentage of appraised value(real) 32.0% • Terms of abatement:(0%Abatement) Real Property PILOT 2022-2024 100% City of Riverside,Missouri (TLI Real Estate Project) Cost Benefit Analysis -I- 7/14/2022 N N O 0.1 n K A A I 1 1 I I I I I I I I I u E u a `a a a N +D En U V .O trE D` O En O 00 en N y Y Fn r W V N NN C — el. C 4 C — el N A O — N 0 0 R Y MVD cto o 1 E aa .et 601 EA xa 01, Vnvvv AO .n r in v A ." N En Q S ED in O O M N E. ee O W M V V Q — P N .0 rh r ce V O — At V N O L +a 0+ V � N N V A• L •an 2 a. A P. PCEA E' 0. tO 0 a CA h 0' A r VD ED Cr r 0 e EA A 'o nr rn v — morn mrvc CA F i - N m O ke N b O OP +D N F ' ; V — C y en 9 E.) wp A a. p 0 L i O. o a u U tr. 0 s9 ss trs O O OE ED ao r rn N ao O rD A O O N Oo — to m N 0 — E W o 0 o - Cr. n o Cr N ON m P E y+ OOoo 66orn 000 ro A h q E.' on O cei Tel N U A U Op y PC E G A O N O A A n v a. e '2 a O v •= '« v e F y 7�i eaa m 'a i `D = 20 = as x - AD . X AA of N C -6 'O Y •YO .... 4 F v: U - m LL wa. aLw b nQ - v tea` c m Y o U` .� U N O N. IN O P W Vl P O 1- b l7 P r 0 • en N - V1 n cc co- h M • N M N m O - m O n CO N V W O - N nl Vt O N N v O P b N H N - - en (A EA vl en O a 1-- P b en O b P r Vl N P V r P f- o en. en P b b - O - N Vl N nt rn Vl cr 0 W 0 N - en V V3 en O P P 1-, b en O b P 1` in F- b - P en cot P - co. n co N b b - in op,. - wt N to ni vi- el en O 00 O N - L Vi fen CA O a a Leo - 'C a VD wt 00 0). r ...0en O P W .00 W en N V O en ; 00,- N V P O re), N .0 O en O ' Vi .0 O O - - - 00 O O N el3 69 4, Eel , p1 O O P \D - N 'n ft eo o 'D e v y C O 'C N - P M V M O b b D O O O O - O O N N rn a N C O O O O O O O N O O O b V3 W F a u u e a D d a` z m o ot D • 0 v ` p' m i a c m • v o E -0 = O C E u n o v 0 E rn 0 t a t. N _ c zY vV N co .4 cN d0 d TVCr r ❑ DUpL p n E c cv 'T o= A co 90 coot L [a F- V) U = CO L L VI a a L VI y w • 4 E e W v CC Z e �Cm Gh.I Q - N N O N. n co hvvv Povn r v r vl P - O vl vl O - M N 0 - b - W M V R V f- P N M r m _ O V enV N N V O 'C CC 69 &I vl N rl rl P - P b - r P P 00 h O O h P W 00 b vl r W r O M P M o o en C 7.. O O P V N C vacb C fO b ID 0: y r OO rn ry O P N N tr0 N V N in0� h P O O b N be EA EA M M 0 b - at V onP M — O 0 M O inn n en r — P 'I- r N V N O N - M O ien n O O inO - Cr, CAN O V enW P O i P - CV C M - - VD W r CIO > n CI - '0 N '/Mj N M O CI P nr M Cl y N LE o YI W (A Q be 69 4 r- ear. - - - W P z in W r b r N ino T W b o W M r O o y P P .0 V P O r M N b O el O V 6 W ` W W O ry M 00 M M O a N O O O = V w - N a el — — C EA FA FA be EA a d — �i ` O O N W - 10 r vl no N O - O O K d M. l0 I-- CP. O ONM O 1/40 VDO O 0 0 O O O O - O M O M N N M co O O En C O O O O O O O O O O O 0 OO OO on N w F L N M a. L T N Cl N O O O N Cl Cl 6 O O. o v U f.- •i O 0 H_ V U O o - Q b 7 0 A - N ✓ o_ ca s cO_ a E u 9 O• o n _ a 0 to 5 O •0 0 6NC)tr- 00 _ 'v -, O Z o V o E c v c= 'O m . 0 2 'i o m o v ✓ 0 N O v 9_ .= c Y L -0 3.3 ; ` a la e 4 'C lcoa a CC:, v • � d ti m o V y Co) ` V • N N O O n DJ V V R P O vl r Vl M A or — P — b VI Vl vl O 0 M N in — b — co M O O ee — T N c en r` eo - - n M " eel f en F V 4 N N OPW W 69 in c O it. O e N M M P — Cr 60 — r Cr P 00 M 0 0 0 0 0 P CO 00 b Vl N 00 r 0 M P Vl Cr... O O O O O — O O O O O R N O rt W ‘so" V M N b 0 CN vi n O N O N O N N P — — N M V f9 M eta co, f9 in c O C. VD — b O en — 00 P M — r 0 O O O r P v r N Or N O N — P O O O O —O Vl O — P N N O V re" O N et N N N V M - - � eo r N N be be be n r o 00 P lO in W lO r b 0" O en 0 P —CO 4 o CO enr V O Vl W O N R P O r n N lO O inO V ✓t c O O ri 0 Vl M M N o. O O N — Qco. V3 f9 Qp .0O Crl0 — m r en N 00O lO e- E., O .0 O — O "I .0 en N ON M P 1n d N N en N 4 0 0 0 O O O O Vl O O O l0 O O O N co N N 0aa) 0d Om '� '� 'z H 0' CrO ¢ ¢ Q t>0 t D v v `v a a a 0 0 0 a` a` a` C) 0 0 m cC c[ `0 0 0 N U c c c V c Q 4N N N N a. Po0 o c o ti _ v j O u E v1i y - y q y C c0 -a ' c o Q 0 oU — o 1/4 H nH AF an a= �° = o oVEO E O E O c ai o a. � y uJi it a u i nmmcEYY . tHenO2 CO .n aa 2cn 3 a -- c .y h ta cc EL. N L ,,, , am • 3 ' o cc mc 8 C - :cc .000 N Oo • E • <• " z P N• Kc4 o c _ C E - o 'jig ! mJ E• E -EE _ - LC c42 - - C r v0g n ,Yail v' EY 9i cagy, pt F UtV