Special Meeting

BOARD OF ALDERMEN

CITY OF PARKVILLE, MISSOURI

December 11, 2001

CALL TO ORDER

Mayor William M. Quitmeier called the meeting to order in the Board Room at 7:15 p.m.

ROLL CALL

Ward 1 Alderman Jack Friedman - present

Ward 1 Alderman Charlie Poole - present

Ward 2 Alderman David McCoy - present

Ward 2 Alderman Dave Rittman - present

Ward 3 Alderman Marvin Ferguson - present

Ward 3 Alderman Linda Arnold - present

Ward 4 Alderman Frank McCoy - present

Ward 4 Alderman Marc Sportsman - not present

ALSO PRESENT: City Administrator Pat Hawver

Roxsen Koch and Bridget Guth, King Hershey

Jim Allen and Tony Borchers for River North

Kenneth Jaggers of Integra Realty Resources

Dennis Eckold, attorney for Pat Kelly and John Schott,

owners of property adjoining TIF property

TIF Commission members.

Those speaking: Brenda Davis, Charlie Kutz

Parkville Heights Shopping Center business owners.

Those speaking: Frank Muehlbach, Kevin Waters, Dave Elling

Evalyn Allen, resident of Parkville Heights subdivision

MEDIA PRESENT: Nancy Jack

Martha Zirschky for Platte Dispatch

Jewel Gopwani for Kansas City Star

Ed Gault and Shan Johnson for Channel 2

Five Boy Scouts

BILLS AND ORDINANCES

ALDERMAN FERGUSON MOVED THAT BILL 2006, REPEALING ORDINANCE 1990 AND RE-ENACTING IT TO CORRECT LEGAL DESCRIPTION FOR PARKVILLE SELF-STORAGE, BE APPROVED FOR FIRST READING BY TITLE ONLY; ALDERMAN POOLE SECONDED; ALL AYE; MOTION CARRIED.

ALDERMAN FERGUSON MOVED THAT BILL 2006 BE APPROVED ON FIRST READING AND PASSED TO SECOND READING BY TITLE ONLY; ALDERMAN ARNOLD SECONDED; ALL AYE; MOTION CARRIED.

ALDERMAN FERGUSON MOVED THAT BILL 2006 BE APPROVED ON SECOND READING TO BECOME ORDINANCE 1991; ALDERMAN ARNOLD SECONDED; ALL AYE BY ROLL CALL; MOTION CARRIED 7-0.

Above bill was posted 12/11/01.

Mayor Quitmeier explained the basis for the ordinance which would amend our code to allow people in the newly annexed area to run for office immediately if they will have lived in their homes in the annexed area for a year as of April 2, 2002. The present Code is in compliance with Missouri statutes, but the city attorney, upon request from staff, researched case law and found that in other states city residency requirements for people in newly annexed areas was not upheld in higher courts. In one case the higher court deemed the denial of equal rights to newly annexed residents who had lived in their homes the required period of time was unconstitutional. The memo from the city attorney, with case findings attached, had been copied and included in aldermen=s packets, and in press packets. The mayor asked for questions or comments on the subject; there were none. It was agreed to read the ordinance.

ALDERMAN FERGUSON MOVED THAT BILL 2007, FURTHER DEFINING THE RESIDENCY REQUIREMENTS FOR CANDIDATES FOR CITY OFFICE LIVING IN THE NEWLY ANNEXED AREA , BE APPROVED FOR FIRST READING BY TITLE ONLY; ALDERMAN FRIEDMAN SECONDED; ALL AYE; MOTION CARRIED.

ALDERMAN FERGUSON MOVED THAT BILL 2007 BE APPROVED ON FIRST READING AND PASSED TO SECOND READING BY TITLE ONLY; ALDERMAN ARNOLD SECONDED; ALL AYE; MOTION CARRIED.

ALDERMAN FERGUSON MOVED THAT BILL 2007 BE APPROVED ON SECOND READING TO BECOME ORDINANCE 1992; ALDERMAN FRIEDMAN SECONDED; ALL AYE BY ROLL CALL; MOTION CARRIED 7-0.

Above bill was posted 12/3/01.

The mayor asked the city clerk to notify the residents of the newly annexed area of the ordinance.

PARKVILLE TIF PLAN

Attorney Roxsen Koch gave an explanation of the plan. All aldermen should have received copies of the resolution adopted by the TIF Commission at the public hearing, she said.

BLIGHT: She gave the definition of blight for a TIF area (see Page 3 of TIF book). The City commissioned a study by an independent consultant. Interested persons may review the Blight Study at City Hall; it is part of the TIF book. Page 14 of that study reports on Adefective or inadequate street layout@ in the TIF area. The TIF Commission, after the public hearing, and after learning the results of this study, declared the area Ablighted.@

Mayor Quitmeier said he and City Administrator Hawver are constantly receiving requests from people who would like to put mini-warehouses, car washes, etc., on the street behind the shopping center, with no type of cohesive planning, nor any provision for stormwater drainage, which is presently causing problems in the downtown area. He asked for questions on the blighted aspect of the TIF area. There were none.

REDEVELOPMENT: Ms. Koch talked about looking at the redevelopment area as a whole, and whether it could be redeveloped on the whole without adoption of the TIF plan. Various individual parcels may be landlocked or the water runoff is bad on certain parcels. Mayor Quitmeier asked her if the TIF Plan conforms to Parkville=s comprehensive plan. Ms. Koch believes it does.

LENGTH OF PLAN: The mayor said he thought the length of the TIF plan was not more than 23 years. Ms. Koch confirmed that figure.

EMINENT DOMAIN: Discussion ensued on eminent domain. Page 25 of the TIF Book defines Acquisition by Eminent Domain. No property shall be acquired in this manner more than five years after the adoption of the ordinance approving the redevelopment project.

RELOCATION ASSISTANCE: Ms. Koch talked of the relocation provisions, shown in the TIF Book as Exhibit 11. It provides for relocation payments for eligible businesses. Mr. Ferguson asked if the Board could require that all tenants be compensated? Ms. Koch said yes, but that would require a new public hearing. Once you close the public hearing you have to give published notice and notice by mail to all taxing districts (to present a revised plan).

Mayor Quitmeier said this plan generates a ton of benefits. Relocation costs may be enormous and may make the program unfeasible. We didn=t pay people anything in the flood or in the train derailment, he said. He raised the question AIf we extend (relocation assistance) beyond statutory requirements, are we going to cause the project to fail?@ Mr. Poole asked if $1,500 were a normal payment for relocation. Ms. Koch said the figure was probably established more than 20 years ago.

Mr. Rittman said for some of the people who have leases the cost of relocation could very well preclude them from surviving. Somewhere in between there has to be a safety valve. $1,500 wouldn=t pay the phone bill. Mayor Quitmeier said merchants get to choose the $1,500 or actual costs. (Section 6.2 of Exhibit 11, Relocation Plan, offers a choice for eligible businesses between the $1,500 payment and actual relocation costs.) The question is whether they are going to extend benefits to people who are renting on a month-to-month basis.

Ms. Koch said the TIF Commission moved to approve the plan as it was. That motion was seconded and unanimously adopted by the TIF Commission.

Ms. Koch said only persons who actually have a property interest are eligible to relocation assistance. If you=re requiring them to move out prior to termination of their lease that=s different than a month to month tenant, who does not have a property right, except for any portion of their 30-day period they lose.

Mr. David McCoy asked if that would apply to people who have leases expiring in the next 18 months. Ms. Koch said they would have property rights only if the owner asked them to move out before their leases expired. Mr. Rittman gave a hypothetical case of a tenant whose lease would expire in 2004. His moving expenses are $25,000. What would he get? Ms. Koch said $25,000, unless he chose to take the $1,500. He has to make that choice within 30 days of being required to vacate the premises. The developer will have some negotiations with tenants who want to relocate within the center.

Mayor Quitmeier spoke of P&G Hardware, a present tenant of the center, whose owners wanted to relocate and bought property west of the city and annexed it into the city.

Mr. David McCoy asked about a hypothetical tenant now paying $5 a square foot, who has no leasehold interest, who couldn=t find anything for less than $10 a square foot and decided to discontinue his business). He would get nothing for relocation if he chose not to relocate. Ms. Koch said he is still going to go out of business even if you paid his relocation costs.

Mayor Quitmeier said if somebody builds a shopping center west of here and draws business away B what=s going to happen to these shops? His personal feeling is that it is not for government to spend tax dollars monkeying with the free market system.

DIRECT TAX IMPACT ANALYSIS: Ms. Koch explained this, and noted that it is in the TIF book as Exhibit 9.

Mr. Poole asked about the tax impact on the citizens of Parkville. Ms. Koch said that would be on Page 2 of Exhibit 9. There would be many more tax dollars coming to the City of Parkville with the redevelopment than without it. Mr. Poole asked if there would be additional sales tax for people shopping in Parkville. Ms. Koch said no. The whole concept of tax increment financing is that without the development there won=t be an increase in sales, nor an increase in the assessed value of the property. Tax dollars used to help pay for the cost of the redevelopment would come out of the incremental increase in sales taxes. Those tax dollars would not be there without the redevelopment.

Discussion ensued on benefits to the city over the next 23 years - over $20 million in additional sales tax, and land being donated to the county for the community center in Parkville. There will also be the benefit of increased property taxes on the TIF facilities. There will be no risk to the City of Parkville if this development does not go through.

The mayor asked Ms. Koch if we had gone beyond what we need to do in this project. Ms. Koch said this project includes only parcels that will be benefited. There was a proposal for a Transportation Development District - an additional sales tax of one cent. This proposal does not require that extra tax to be adopted, but it could be added to taxes in just the TIF area, solely for properties in that area that are owned by the developer, unless a property owner wants to join in. This plan says only the developer. The mayor pointed out if that happens it would not affect the City=s bonding capacity C it would go through the County.

Mr. Allen thanked the TIF commissioners, many of whom were present, for all the hard work they put into the plan. They were from various neighborhoods in Parkville, he noted. The mayor added the appreciation of the City.

Mr. Allen said the grocery is projected to be 56,000 square feet. Mr. Rittman asked when the merchants would have to be out of their businesses. Mr. Allen said they hope to be able to work with all of the tenants presently there and keep them in the center. The development company feels there=s a substantial risk in closing too early, but they do want developer approval from the City so they can begin talking to the tenants. They hope to close in the middle of the year; hopefully they can start on the grocery store first. They hope to have the rest of the buildings ready for occupancy mid-2003.

Mr. Rittman said those merchants whose leases expire before mid-2003 would not have the benefit of the relocation assistance. Mr. Allen said hopefully they will be able to negotiate mutually satisfactory transactions with each of them. AWG contacted them, and they have had discussions. They have also talked to others who have approached them; but have tried not to initiate contacts because they have no developer rights yet.

Mayor Quitmeier said AWG told the City they would buy the shopping center and just put up the grocery, and then we=d have a typical shopping center, with no relocation assistance offered.

Mr. Allen said they=re trying to make a pedestrian-friendly center. There are areas set aside for delivery trucks and garbage trucks so they will not be intrusive upon the center. This TIF plan will use only 50% of the incremental increase in sales tax, none of the present sales tax, and none of the property taxes. Property values and taxes will go up. The plan allows for public improvement of roads, storm sewers, sanitary sewers, and the community center. Mr. Borchers discussed road improvements. The mayor suggested that when River North (the developer) is making improvements to the eastern half of Bell Road, the City allocate funds to improve the west half, so the road can be improved all at once. Public improvements are noted on Pages 14 and 15 of the TIF book.

Mr. Borchers talked about Highway 9. In talks with MoDOT (Missouri Division of Transportation) they proposed a full turn lane at Phillips/Dr. Donnelly=s office. They=re also going to include a storm drain and curb and gutter along Highway 9 in that area. That will decrease silting into Riss Lake and mean less water at the entrance to Pinecrest. There will be two detention ponds on the site, the one at the southeast portion of the site getting the most use. Drainage will go south to the detention pond, rather than going under Highway 9. The turn off 63^rd Street to Highway 9 is very tight; it will be improved to make the turn easier. There will be another turn lane going into Pinecrest.

The proposed development does not warrant a signal on Highway 9, but there is a proposed development for across Highway 9, and River North is suggesting to MoDOT that the two developments should be considered together when the need for a signal is evaluated.

Mr. Allen said the major internal street in the development should alleviate the congestion at Highway 45 and 9. The internal street will be landscaped.

Mr. Allen spoke of the TIF revenues. He said they won=t get reimbursed for any improvements unless they are successful. This probably won=t happen for three or four years. There is significant risk; they are willing to do it. Investors will get the required return; they (River North principals) will work for less.

Kenneth Jaggers, Integra Realty, spoke about the ABut For@ analysis. It is included in the TIF book as an addendum, marked Addendum B.

PUBLIC COMMENT

Frank Muehlbach, owner of Apple Market, said this is the largest large developable commercial site in the area located near a major access street. He said if this is not done in a planned way, the way Mr. Allen and his partners have presented, he said it could end up as a hodgepodge of pad sites that would be intolerable to this area. He asked aldermen to approve this plan rather than let the property be redeveloped on a piecemeal basis. He thinks it=s a good plan.

Dave Elling, owner of Dave Elling Insurance, said the City would actually be coming into the free market process by approving a TIF. He has been there 21 years. He has a three-year lease. He will be renewing in December of next year. He is not opposed to it; he will get no reimbursement and no guarantee, but is willing to live through it.

Mayor Quitmeier asked Ms. Koch if there could be a deviation from the plan. Ms. Koch said the developer could not substantially deviate from the plan without the Board=s approval. The Board would make the determination as to whether the deviation would be substantial.

Kevin Waters, The Pastry Shoppe, said the bakery has been there since the center opened in 1969. By the time this comes to pass, everyone will be out of lease with the exception of the grocery store and Gomer=s, because no-one else has been able to negotiate a long-term lease. He just wanted everyone to be aware of it. It=s a terrific plan, and great for Parkville. The only source of income to pay for anything is tenant rent, so rents will more than double; common area maintenance will go up substantially. All expenses are passed through to the tenant, including increased property taxes. He asked aldermen to keep that in mind.

Dennis Eckold, attorney for Pat Kelly and John Schott, said he understood three properties need to be acquired for this project. The developer would need to meet with these property owners. At some point in time the developer may come to the City and ask for eminent domain over the special property owned by Mr. Kelly and Mr. Schott. When this special property comes before the City, he asks that the Board not take its power of eminent domain lightly. We (the property owners) will deal in good faith, he said, and asked the City to do the same. Mayor Quitmeier said he does not think we should get involved in negotiations over price. Mr. Friedman said he thought the property purchased by eminent domain is at a price established by impartial persons appointed by the court. Mr. Eckold said that=s debatable whether the price is fair. Mayor Quitmeier said the process would include the right to appeal.

Mr. Allen pointed out he was not represented by counsel, so if there=s anything with respect to the use of the language Aspecial property,@ he objected to it. They (the developers, River North) understand that they are required to negotiate in good faith and make a reasonable good faith offer, and they will comply with the statutes. If the City is not prepared to exercise its power of eminent domain, then they are prepared to withdraw their offer to develop the property.

Evalyn Allen spoke. She lives at 6415 Melody Lane. She has no leasehold interest and does not own any business at Parkville Heights. She did not represent anyone. She guessed she was just a bored housewife and thought she needed to do something that evening. They moved from the inner city and thought they had left such terms as TIF and condemnation behind them. She is concerned about the almost automatic acceptance of the statutory definition of the term Ablighted area.@ She did not see how the concern with the streets, the drainage, and the illegal dumping in any way renders this redevelopment area a menace to health and the public welfare, or a social or economic liability.

Mayor Quitmeier asked if she had read the blight study. She said no. The mayor said we needed to get her a copy of it. She said all she was doing there was urging the aldermen to make sure that everything had been looked at carefully. She said you=re messing with people=s money when you do a TIF. She=s not opposed to a great development. She said those businesses are not merely of value to the community; they are part of the community. She said we don=t need more stores; if people want a drugstore or other things, they can drive to them or they can move to that area. She said AYou have the power to exercise some support B you don=t have to roll over...@

The mayor said they have worked for 2-1/2 to 3 years on this. He personally took offense at her statement that they are just rolling over. He personally has put in hundreds of hours on this project on his own. He asked her to please be careful with the words she selected, and know her facts before she discussed them. He said this board met in a work session on Saturday; the TIF Commission has worked tirelessly on this, and now she=s suggesting that they=re just rolling over. He recounted development in Parkville over the years. You can=t stop development; you can shape it. This looks like a good shape to him. He lives in the same neighborhood she does. He=s sorry some of the merchants are going to get hurt.

Mrs. Allen said if she could continue without further interruption she would appreciate it. She didn=t think it behooved this council to roll over on any of the issues that affect the merchants who have contributed to this community for this amount of time. AIf you have the ability to influence to affect ...

$1,500 doesn=t pay you back B if you can=t afford double the rent, you=re going to lose that person,@ she said Athe whole appearance of this plan looks like a sprawl mall.@ She hasn=t seen any models or architect=s rendering, but she was hoping to see something that would reflect the charm and the quaintness of downtown Parkville.

Mayor Quitmeier said they have worked hard to make sure this development does not look like Tremont, with Blockbuster sitting out in front, or the AMC Theater, where you can=t get in and out. This development differs substantially. Mrs. Allen said there=s nothing to show what the buildings look like; Mayor Quitmeier said they have had renderings at their meetings.

Mrs. Allen said she was saying the aldermen should use their influence to help those merchants who fall through the cracks, and should use their influence to see that they get what they were told. Mayor Quitmeier said Ms. Koch said the plan could have no substantial deviation without approval of the Board.

Mrs. Arnold thanked Mrs. Allen and said Mr. Muehlbach had spoken in favor of the project. Mrs. Allen said if she heard correctly he was in a little different situation than the others.

Discussion ensued about the appropriateness of using tax dollars to help merchants who suffered from the flood and the train derailment, and will suffer from this redevelopment. Mr. Waters said the difference between the circumstances was that merchants can buy insurance against floods and accidents. Mayor Quitmeier reminded him that most did not have flood insurance.

The mayor spoke of other redevelopment which could happen without the adoption of this plan. It could be Ahodgepodge@ or something we don=t want. Mrs. Allen said because you think this is good you don=t need to be concerned about these people B the mayor said he is concerned, but doesn=t think it is appropriate to use tax dollars for relief in a business situation.

Charles Kutz, a resident of Riss Lake and a member of the TIF Commission, said he was disturbed by the suggestion that they didn=t follow the guidelines. The TIF Commission spent many hours and worked hard to learn all aspects of the proposal, and then made a recommendation which was sent to the Board.

Brenda Davis, a resident of Parkville Heights at 8901 Melody Lane, said she would like to speak not as the chairman of the TIF Commission, but as a resident of Parkville Heights. She is so excited about the new shopping center; she would love to have a drugstore. She has used these shops for years and years, and she dearly loves some of them. Her point is that she owns property right behind Picture Hills, and she feels her tenant is her responsibility, and what they work out is between them. She doesn=t see this situation as a TIF Commission problem, or a Board problem. She sees it as an opportunity for the Parkville Chamber of Commerce to assist these merchants.

BILLS AND ORDINANCES (resumed)

ALDERMAN FRIEDMAN MOVED TO APPROVE BILL 2008, ADOPTING THE TIF PLAN AND NAMING RIVER NORTH AS THE DEVELOPER, AS DISTRIBUTED, FOR FIRST READING BY TITLE ONLY; ALDERMAN POOLE SECONDED; ALL AYE; MOTION CARRIED.

ALDERMAN FERGUSON MOVED THAT BILL 2008 BE APPROVED ON FIRST READING AND PASSED TO SECOND READING BY TITLE ONLY; ALDERMAN POOLE SECONDED; ALL AYE; MOTION CARRIED.

ALDERMAN FERGUSON MOVED THAT BILL 2008 BE APPROVED ON SECOND READING TO BECOME ORDINANCE 1993; ALDERMAN POOLE SECONDED.

ALDERMAN FERGUSON - AYE, with the hope that the developer would work with the tenants and work out something that would meet everyone=s expectations. Mayor Quitmeier agreed, and said he thought they all shared that thought.

ALDERMAN RITTMAN - AYE, seconding Alderman Ferguson=s comments. He said for those who were concerned there was a development agreement that would help in terms of getting it done. He was very complimentary toward this project, and proud to say aye.

ALDERMAN POOLE - AYE; ALDERMAN FRIEDMAN - AYE; ALDERMAN DAVID McCOY - AYE; ALDERMAN ARNOLD - AYE; ALDERMAN FRANK McCOY - AYE; MOTION CARRIED 7-0.

ALDERMAN POOLE MOVED TO ADJOURN; ALDERMAN FERGUSON SECONDED; ALL AYE; MOTION CARRIED.

ALDERMAN RITTMAN MOVED TO RECONVENE AND GO INTO EXECUTIVE SESSION TO DISCUSS PERSONNEL (2002 SALARIES) UNDER AUTHORITY OF RSMo 610.021(3); ALDERMAN POOLE SECONDED; ALL AYE; MOTION CARRIED.