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Council to vote on establishing new Community Improvement District

The former Colgan Alternative Resource Center at the intersection of 36th street and Frederick Avenue could soon be getting a makeover.

Posted: Aug 23, 2018 6:31 PM

(St.Joseph,MO) The former Colgan Alternative Resource Center at the intersection of 36th street and Frederick Avenue could soon be getting a makeover.

Wesley Grammer, President of Sky Real Estate, has purchased the property at 3502 Frederick Avenue in hopes of establishing a Community Improvement District (CID). A Community Improvement District is a designated property district that takes on additional taxes to fund improvements within the district.

Planning and Community Development Director Clint Thompson said establishing a new CID would allow the property to be revived without relying on assistance from the city.

"The developer has purchased that property to use the Community Improvement District funds to assist with the demolition and elimination of blithe on that property for the construction of retail development,"Thompson said

Grammer said he plans to demolish the building to create office and retail space and will fund improvements through an additional sales tax.

"The public private partnership that we're working on is a structure where we would have an add on retail sales tax, which is just simply taxing anyone that would buy something an additional one cent for each dollar spent," Grammer said.

Shoppers will be charged a one percent sales tax to help cover the cost of revitalizing the property. Building tenants will also be paying an additional rent fee that charges $1 per square foot of rental space.The funds will be used to cover the cost demolition and construction of a new 18,000 square foot facility.

“Community Improvement Districts are imposing a tax on themselves or their own property,” Thompson said.“The city collects the funds to reimburse the developer after the funds have been received to reimburse [the developer] for eligible expenses.The city then does not have a say in how those funds are utilized.”

The building formerly owned by the St.Joseph School District has sat vacant since December 2015 and was purchased in May for $375,000.

"The property, if it was not redeveloped, most likely would remain a vacant structure that would need the city's attention. Ultimately if a property owner is not responsible for taking care of a structure, we may have to come in and do some securing or demolition of a structure if it is unsafe," Thompson said.

Grammer still needs approval from the city council to establish the new taxing district. CID developers must submit a five year plan that includes an outline detailing how the funds will be used and what the project budget is for the first five years.

The outlined plan also establishes an independent board to govern the financial district. The city council will approve five appointees to sit on the board and act as the governing body for the taxing district.

"The city's approval on this piece of it is really important.We can start moving forward with some of the demolition and some of the first phase of the site work. We will be able to move forward with the donation piece, clear the air of the current building and start marketing the site for new users," Grammer said.

If approved, the CID is expected to bring in $70,000 annually for the first five years, and the project is expected to sunset out after 40 years.

"Sunsets are tied to when the developer thinks they can pay off the debt associated with the project,” Thompson said. “The intent of Community Improvement Districts is to assist with the development, eliminate a blithe condition and lower the cost of the expense in developing a property that otherwise would be difficult to redevelop."

The city council will vote on the establish the CID at their next meeting on August 27. If approved, Grammer said he would like to begin construction on the development in spring 2019.

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