A handful of planned student housing developments could be up in the air after the Columbia City Council rejected a tax increment financing plan at last week’s meeting.
Following a stream of public comment and discussion by city planning officials, City Council members struck down a plan comprised of more than $70 million of developments and improvements with a divided 5-2 vote at its Feb. 17 meeting.
Robert Hollis, a Columbia-based attorney who represents housing development companies Park 7 Group, American Campus Communities and The Opus Group, said that although his clients never took a position on the TIF, infrastructure problems are jeopardizing plans for downtown development. Hollis said TIF was one method of financing the infrastructure upgrades, and he urged the council to find a financing method to allow the projects to move forward.
“There’s a problem that my clients can’t solve, and that’s that there isn’t infrastructure,” Hollis said. “Whether you consider their projects good or bad, they’re not an option at this point.”
Proposed TIF projects included $19.75 million in water, electricity capacity, sewer and stormwater improvements, according to council documents.
Though there are funds set aside in the various city budgets to cover projects, the reserves do not exist to provide for the extent of improvements needed, City Manager Mike Matthes said in his report to the council.
“That perfect storm — that tsunami, if you will — has hit us, and we do have a utility situation,” Matthes said. “We are not prepared to serve.”
One of the biggest utilities issues addressed by the TIF proposal is the lack of sewer capacity and sanitation overflow with rain, a problem that would only worsen with proposed downtown development, Deputy City Manager Tony St. Romaine said.
“We’re not just building to fix an existing short-term problem which is what we had,” St. Romaine said. “It’s also an opportunity with the amount of private capital investment we see on the sidelines right there waiting to be given the notice to start.”
Despite potential infrastructure issues, American Campus Communities — which owns The Cottages, Grindstone Canyon and Forest Village and Woodlake student housing developments — had a rezoning request for 3.81 acres of land near Conley Road and Fifth Street approved at a Planning and Zoning Commission meeting Feb. 20.
Commission documentation prepared by Development Services Manager Pat Zenner acknowledged that Columbia’s current electric and sewer capacities do not support the size of the development, but it recommended the rezoning for approval.
American Campus Communities is seeking a development agreement with the city that would guarantee adequate utilities by the complex’s 2016 opening date. The agreement and project plans will now head to City Council for review.
Many residents who spoke to the council said infrastructure improvements may incentivize future downtown development, although not all were pleased with the possibility.
Broad use of the TIF to fund many of the city’s projects would present financial gains to developers who are already interested in building in the downtown area, said Columbia resident Anthony Stanton.
“Developers are getting a great deal in Columbia,” Stanton said. “I dont think we need the TIF to entice these people to come here and do business.”
Mayor Bob McDavid, who cast one of the two votes in favor of the TIF along with Second Ward Councilman Michael Trapp, said he believed developers would be dissuaded by the effective capacity limit imposed by the city’s utilities gap.
“This is an anti-smart growth failure of our part if we don’t fund this,” McDavid said. “Columbia will be fine in the big picture, but I think we are missing an opportunity.”
Prior to the meeting, the Boone County Commission filed a lawsuit against Columbia related to the TIF proposal.
The commission claimed the city did not file the proper reports required for other TIF districts in the area and is therefore prohibited from creating any new districts for at least five years, according to petitioning documents released by the commission.
In a Feb. 4 letter to McDavid, three commissioners said they would consider cooperating with the city if Columbia scrapped its TIF plan.
“We are more than willing to partner with the city to explore options, which might include a joint approach to seeking the implementation of a use tax,” the commissioners wrote in the letter. “This, in turn, would result in the city having the ability to fund the upgrade of its utilities infrastructure.”
Claire Boston contributed to this report.