by Alan McArthur
The Transportation Development District (TDD) to fund road improvements in the Platte Valley Plaza was discussed again at Tuesday night's Platte City Board of Aldermen meeting.
This time the plan included a section where the developer, Bill Mann, has asked the city for a guarantee to potentially pay debt incurred by the TDD.
The board will make a decision on the recommendation at its next meeting next Tuesday night at city hall.
Under the agreement with the developer, the developer is required to complete the first phase of road improvements set out by the TDD. These improvements include traffic signals at the intersection of Kentucky Ave. and Highway 92 and the intersection of Running Horse Road and Platte Falls Road.
The guarantee would apply to the improvements in phase two which include an additional lane on Kentucky Ave and signal modifications at the intersection with Highway 92, in addition to the widening of the intersection of Running Horse Road and Platte Falls Road.
“The TDD committee met last week and the question was posed, would the city entertain the idea of a guarantee for bonds,” said Keith Moody, city administrator.
The Board heard from David Bushek, an attorney employed by the city, who discussed the advantages of the plan.
“My firm does deal with these questions a lot,” said Bushek. “It’s not uncommon for cities to back these plans. The city would cover the debt from bonds, if revenues from the project don’t cover the bonds.”
“It is more likely that a developer can find financing if a city is backing a project,” said Bushek. “The developer has said he will increase the special assessment (on property within the district) if the city will pledge to cover part of the plan.”
Bushek also discussed the disadvantages to the proposed plan.
“One of the disadvantages of the plan is that the construction risk is shifted to the city,” said Bushek. “If there is a revenue shortfall, then it is more likely the city will have to pay the pledge.
“In the event the city is called upon, if the city doesn’t provide the money then it can affect the credit rating of the city, which would cause an increase in the interest rate of any future project,” said Bushek.
One of the aldermen asked if the practice was a common thing for a city to do.
“Is this typically something a big city would do, or is this common for a city our size?” asked Andy Stanton, alderman.
“I would not say it is common, but it doesn’t change the variables I mentioned before,” said Bushek. “If the development already has a large store with a signed lease then the risk is less.”
An attorney for Mann, the developer, added her input to the discussion.
“The main issue for the developer are the added projects, which the city wants to do, and the developer does not want to guarantee the work without the city’s backing,” said Deborah Polk, attorney.
The aldermen then discussed the proposal.
“Was this reviewed at the last meeting of the TDD?” asked Todd Sloan, alderman.
“This was new at the last meeting,” said Kenneth Brown, alderman. “The developer floated the idea of the city underwriting a guarantee. We said we can’t speak for the board so we put it on the agenda.”
“This is my two cents,” said Dave Brooks, mayor. “Without the backing, not all of the project will get done."
The attorney noted that the smaller portion of the project is the only part the developer is asking to have a guarantee for.
“The city can provide a pledge for a portion of the development,” said Bushek. “The developer is ultimately responsible for the original phase one. It’s only the $240,000 that the city would have to provide the guarantee for.”
“The way it is presented tonight with the other options, I’m not completely opposed to the city covering a portion,” said Brown.
“I think we should think strongly about whether the city should back this when there are a lot of ‘ifs’ involved,” said Brooks.
Some of the aldermen expressed interest in looking at other options for the city to pursue.
“I think we should pursue options that do not require the city to make a guarantee,” said Sloan.
“I concur with Todd, I’ll stay on the conservative side,” said Stanton. “I want to protect the city from an obligation.”
Aaron Jung, alderman, asked if it would be possible to do the phase two improvements later in the future.
“If we do the lane widening a year from now, do you think the cost would be about the same,” asked Jung.
“The total cost if done separate would be greater, because you have materials you couldn’t reuse,” said Moody. “If we modify the signals later it will add to the cost over and above this projection.”
Several aldermen asked for more information before the next meeting.
“I’d like to know what the growth in the area has been,” said Marsha Clark, alderman.
“And we might want to have a breakdown of the liability for the city,” said Aaron Jung, alderman.
The board also:
•Voted to set the levy at the rate of $1.0095 per $100 assessed value. The board passed the levy without any discussion at this meeting, it was discussed at several previous board meetings.
•Heard a complaint from a citizen about a property at 131 Mill St. The complaint was about overgrown weeds and various other alleged ordinance violations. According to Vickie Atkins, resident, the property was annexed into the city in 1994, however the paper work never made it to the clerk’s office until 2005, so the city was unable to enforce code violations.
•Heard from a member of the Main Street association about the End of the Trail Rally. Bunnie Foster told the board she feels that the rally benefited the city because of the people and money it brings in. “I view the rally as an important part of this city,” said Foster. “It draws people from all over the world to Platte City. It is worth the investment, and we ask you to keep this, for the good of Platte City.”