More than $1 million in sales tax and property tax payments will be made in the coming year to developers of the Eight Points retail area.
Just over 8% of the debt owed by area residents for the commercial development has been paid to date, or about $3.3 million, according to information from city officials.
The payments are made from sales tax and property tax collections of the city of Poplar Bluff, Butler County, Poplar Bluff R-I School District and the Poplar Bluff Municipal Library, as well as two transportation development districts, Poplar Bluff Regional and Oak Grove Road TDD.
City leaders entered into a redevelopment agreement in 2012 with developers in return for improvements to property, which are currently valued at $75 million. Improvements were originally expected to top $123 million.
The agreement established items for which costs would be reimbursed, including certain expenses related to land acquisition, construction costs, professional fees and financing costs for new businesses at the site.
A tax increment financing district was established as part of the agreement, through which expenses and payments are tracked.
Developers have submitted $39,317,582.29 in reimbursable expenses, with the last bill received in December 2018.
No additional bills are expected, said city manager Mark Massingham.
Just over $36 million is outstanding and will be repaid through annual property and sales tax collections.
“It is really difficult to evaluate the impact of Eight Points on our community,” Massingham said, when asked about the value the development provides to the area in return for these tax dollars. “I do think that several of the businesses out there have brought people to Poplar Bluff to shop and have kept Butler County residents here to shop instead of traveling to Cape or Jonesboro.
“It’s hard to determine how much some of the businesses have taken sales from businesses that are already here, where we collect 100% of the sales tax generated, as opposed to 50% of the sales tax generated at Eight Points.”
All in all, it has been good for the community to have a new shopping area, according to Massingham.
“Whenever I am out there, the places are all busy and a lot of those sales would be going to other towns if they were not there,” he said.
Sue Crites Szostak, director of the Poplar Bluff library, agrees the draw of retail dollars has been good.
“… the new businesses in the Eight Points District have drawn new shoppers and increased overall sales tax revenue for Poplar Bluff. There has been retail added to Poplar Bluff elsewhere which has helped tremendously with sales tax revenue, also,” she said.
The library makes all of its payments to the tax increment financing district from sales tax revenues.
“All of the library’s tax revenue is sales tax as the property tax for the library has been set to zero since 2013,” she said. “Since December 2015, the library received $882,339.88 in sales tax revenue and paid one-half of that amount, $441,169.94, to the TIF.
“I would like to say this was additional tax revenue, but some of that amount, and I don’t know how much, would have been collected in Poplar Bluff as shoppers would have spent these dollars at other city businesses.”
Crites Szostak added she is proud of all that has been accomplished and the potential for further growth.
“I want to see other areas of the city prosper. As a downtown occupant, we want to draw visitors to all parts of the city and our communities,” she said. “We all need to share in growth. Visitors downtown draw people into the library, encourage reading and social development for all of our citizens. This helps us to fulfill our mission as promised to the citizens.”
Payments to developers were made using bonds, issued at three separate times (figures approximate): Series 2015A, original principal, $16.9 million, with $14.5 million outstanding; Series 2015B, original principal, with $10.7 million, $10.3 million outstanding; and Series 2017, original principal $11.7 million, with $11.2 million outstanding.
The city is now paying off the bond debt. Collection of a 1-cent sales tax within the TIF helps fund payments to the TIF. The debt cannot go past 2035, officials have said previously, who have said payments are on pace to pay the amount off by that date.
The majority owners of Eight Points Development listed in the original redevelopment agreement were THF Poplar Bluff Investors. THF is owned by Stanley Kroenke, Kroenke family members, TBF Poplar Bluff Investors LLE and Jeffrey Otto, according to city documents.