The Branson aldermen last week heard a five-year update of the city’s various Tax Increment Financing projects.
Tax Increment Finance is a program in which the city can capture a portion of taxes produced by a development to pay back bonds that were used to fund the development.
The city currently has three TIFs: Branson Landing, Branson Hills and Aquarium at the Boardwalk. Another TIF – Branson Meadows – ended a couple of years ago.
According to a city staff report, the Branson Landing TIF was established in 2002 and was amended in 2005. The Landing is what is known as a super TIF, which means 100% of the incremental taxes collected within the 208-acre project are used to pay the bonds.
The staff report also noted that in 2019, the Landing TIF district generated $10.1 million, mostly from captured taxes, but also from the city’s lease with HCW Development, which pays an annual $455,000 lease to the city.
The $10.1 million total was not quite as high as 2017’s $10.2 million, but was higher than the other three years ($9.8 million in 2015, $9.8 million in 2016, and $8.7 million in 2018).
Alderman Larry Milton commented that TIF revenue from the Landing appeared to be relatively flat over the five-year period from 2015-19.
City Finance Director Jamie Rouch said it was partly because of changes at the Landing.
“One of the things I can say on that is some of the retail stores have gone out and they have been replaced with restaurants and amusements. And whereas the numbers appear to be flat, you have more tourism-related items, so you can look at the tourism tax as well.”
The Branson Hills TIF began in 2004. Although all three phases of the 141-acre area have been completed, there are still some leaseable lots. Most recently, an Aldi opened in the area.
Branson Hills is a traditional TIF, which means only 50 percent of the incremental sales taxes are used to pay off the bonds. Since 2015, Branson Hills has generated about $5.5 million per year for bond payments until 2019 when it generated about $6 million.
The Branson Meadows TIF district ended in 2018, but Rouch included it in the report because it was still active within the last five years. According to a staff report, it began in 1995. The 340-acre project has “never developed close to its original projections” according to the report.
Aquarium at the Boardwalk
Branson’s newest TIF is Aquarium at the Boardwalk. It began in 2019. It is a pay-as-you go TIF.
“The developers submit a list of all their expenses to us, and based on the criteria that was given and approved through this TIF and the TIF Commission, we go through and certify that those expenses are correct and accurate and certifiable for the eligible expenses for this TIF,” Rouch said.
Because the tax dollars on this TIF have only just started coming in, Rouch said the city does not have a breakdown of those taxes yet. So far, the city has certified $3.7 million of expense, and Rouch said approximately $1.1 million more is pending certification from the city.
“So when the TIF dollars start rolling in, then we’ll start paying out those certified expenses to that developer.”
According to Rouch, when the Branson Landing and Branson Hills TIFs come to an end in 2027 and 2028, but there will still be some debts that won’t end at that time.
“We’ve already been talking to some of our financial advisors about when these TIFs come and are callable, and then the debts come and are callable,” she said.
She said the city will be looking to refinance those debts to reduce the time and the amount of the debt. She also said the city has already done that with a 2015 refinancing of the Branson Landing debt.
“The remaining balance on that is $54.9 million. We refinanced that in 2015, and we shaved quite a bit off the debt and we cut two years off, but we still have several years to go,” Rouch said.
She said the city would like to cut down on the life of those debts as much as possible so that the money coming in on those projects can be used in other areas.
According to Rouch, the Branson Hills TIF has exceeded expectations. However, when Alderman Bill Skains asked if the city would be able to pay off the debt early, Rouch said that it would depend on refinancing.
“That will depend on if we can refinance and if we can restructure the debt that way,” she said.
Mayor Edd Akers said he was happy with how city staff was handing the TIF projects.
“A long time ago I learned that the only way that you reduce debt is by paying it off. And we’re slowly, but surely, getting our city in better shape, even during tough times,” Akers said. “And I thank Jamie for her work and for the administration to keep on task for this.”