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Chapter 353 Project: council approves formation of Urban Redevelopment Corporation

November 24, 2017 – In the first step to utilizing Chapter 353 for community development, the Excelsior Springs City Council unanimously approved the formation of an Urban Redevelopment Corporation (URC) Monday, Nov. 20 during its regular council meeting. Following that vote, the council then voted to move forward with a 353 Redevelopment plan.

As originally reported in The Standard on Nov. 3 and again on Nov. 10,  the Chapter 353 program will create an incentive allowed by Missouri law to encourage the redevelopment of blighted areas through the abatement — or forgiveness — of property taxes over a 10 year period.

Economic Development Director Melinda Mehaffy has been educating the council and department heads over the past month and the public during a Public Hearing on Thursday, Nov. 16 on the details of the program and the steps involved to implement it.

“The program will accomplish five different things. First, it will remove the blight that we find in the downtown project area,” Mehaffy said. “We also want to encourage reinvestment and encourage preservation of the historic nature of our buildings that we have in this area. We want to encourage home ownership, and we want to improve the value and appearance of the neighborhoods in the area.”

Once in place, home owners in the designated boundaries could qualify for up to 10 years of tax abatement on property repairs and improvements. A minimum of $3,500 must be spent on exterior improvements to get the abatement.

Examples of improvements that qualify are masonry work, painting, chimney repair, window/door replacement, roof repair and landscaping and fencing.

Interior improvements that also qualify include painting, plumbing, insulation, electrical work, flooring and heating or HVAC repair.

Homeowners who qualify will receive 100 percent of their property tax abated for a period of up to 10 years or until the amount spent on improvements has been reimbursed, whichever comes first.

“You will get back only what you put into it and not more,” Mehaffy explained.

Commercial property owners have the same requirements as home owners with the exception of a minimum expenditure of $15,000. Additional services and time is granted for businesses investing even more, with levels at $75,000, $100,000 or $300,000.

The downtown area mapped out and included in The Standard’s article on Nov. 3 was selected for the program because of its deteriorating and blighted condition. Mehaffy shared findings from code enforcement who inspected 231 homes to help designate the area.

According to the study, 67 percent of the city’s dangerous buildings are within this boundary. There are 432 parcels in the area and 250 owners.  Forty-nine people own more than one property, eight own more than four properties and 24 percent of the parcels are owned by the government or non-profit organizations. Renter occupancy is trending upward in the boundary and is higher than Clay County’s average. Home ownership in the area has declined slightly since 2000, according to Mehaffy.

By voting to approve the formation of the Urban Redevelopment Corporation, the city council voiced their approval of the plan and their willingness to help local homeowners improve their blighted property.

According to Mehaffy, each improvement project is a redevelopment plan with a separate development agreement between the city and the property owner. Each property must be processed through the URC and then signed back to the property owner in order to receive the abatement benefits.

“While our taxing partners are foregoing the tax on property for a short time, it is with the understanding that our expectation is to improve property value in the blighted areas and that taxes will continue to improve after 10 years instead of diminish,” Mehaffy said.

“The program is totally optional; we will not force this on anyone. We hope to provide a mechanism to help property owners improve their condition and create a culture of pride  within the downtown area,” Mehaffy said.

Next week, The Standard will share examples on how the program could help individuals over the age of 62 on fixed incomes and a family of four with an annual income of $32,000.

By Brian Rice • brian@leaderpress.com

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