Staff from the city of Mission and representatives of the Cameron Group, LLC, have released details of the Mission Gateway redevelopment agreement that will go before the city council for consideration tonight, a package of public finance incentives that would provide the developer with $36.6 million in present value while opening up revenue streams for the city that would total an estimated $29.5 in today’s dollars.
City Administrator Laura Smith and financial advisor Bruce Kimmel had been in talks with Cameron for months about the specifics of the public finance incentives package the company had requested for its third attempt to get a project out of the ground on the former Mission Mall site. Initially, Cameron had requested that the project capture 100 percent of the revenue streams allowed under community improvement district and tax increment finance law, an arrangement that would have provided relatively little benefit to the city over the project’s first two decades.
Smith and Kimmel, however, insisted that the city, which has suffered through a series of Cameron’s fits and starts on the project, realize a share of the proceeds from new sales tax and transient guest tax revenue from the project early on.
Under the terms of the deal, Cameron will have access to the following revenue generated in the Mission Gateway project area:
- All proceeds from the 1 percent community improvement district sales tax
- All proceeds from the property tax increment
- 55 percent of the proceeds of the city’s general sale tax
- 89 percent of the proceeds of the transient guest tax generated by the hotels in the project.
The city would realize new revenues from the following:
- 45 percent of the proceeds of the city’s general sales tax
- 11 percent of the proceeds of the transient guest tax.
Kimmel’s projections indicate that through those two streams, Mission would generate around $545,000 in new annual revenue by 2021, the first year the development will be close to fully operational. The city’s annual general fund budget is around $10,000,000, so the new revenue would represent a 5 percent boost to city coffers.
Mayor Steve Schowengerdt and Ward IV councilman Ron Appletoft, who is the only candidate running to replace Schowengerdt, said on Tuesday they believed the deal offered an opportunity for the city to see near immediate benefit from a site that has sat vacant since the mid-2000s.
“It’s been a long road and taken a lot of hard work to get here, and the city council will have the chance to consider the whole deal Wednesday,” Schowengerdt said. “I know there has been a lot of importance placed on our residents and businesses not having to wait for 15 to 20 years to see benefits from the project.”
Under the terms of the agreement, Cameron would have to get current on nearly $1.5 million in unpaid stormwater assessments in 2018. The deal includes clawback provisions that allow the city to withhold finance incentives from Cameron if the company ever gets behind in future stormwater assessments, which will total approximately $600,000 a year from 2019 through 2034.
The agreement also prevents Cameron from seeking public finance reimbursements for the $38 million in costs associated with previous attempts to get a project moving on the site.
From the general sales tax and transient guest tax proceeds alone, projections indicate the city would see $12.3 million in new revenue between 2018 and 2038. When all potential revenue sources are added, including base property taxes, the stormwater assessments and proceeds from special sales taxes to benefit streets and parks — which would need to be extended in the coming years — city estimates suggest the total proceeds associated with the project will come to $40.7 million by 2038.
The city council approving the redevelopment agreement tonight, however, would only open the door for Cameron to begin moving forward with the project. He would still need to secure financing for the proposal before being able to break ground.