Several Independence city officials agree the use of tax increment financing for the redevelopment or remediation of the city’s two former hospitals is an unprecedented situation.

Several Independence city officials agree the use of tax increment financing for the redevelopment or remediation of the city’s two former hospitals is an unprecedented situation.

There was no preset formula or means of determining the distribution of $12 million in TIF funds for the redevelopment of the former Independence Regional Health Center and the former Medical Center of Independence. Instead, city staff assessed the situation in early 2008 and recommended the allocation of $10 million to the IRHC and $2 million to the MCI. 

Community Development Department Director Jennifer Clark said it “was difficult to analyze to how it (the $12 million) would be broken out.” Staff made recommendations based on what it would cost to return each location to a greenfield condition. The assessment took place in January 2008, and Clark said demolitions might cost more at this time.

Independence Regional, on Truman Road, “has significantly higher environmental issues” than MCI, as well as more space and a parking garage, Clark said.

Jim Harlow, Independence director of finance and administration, said that while the city could ask for proposals for formal bids, it would be difficult because demolition projects aren’t drafted.

The City Council created the Independence Regional Medical Center Tax Increment Financing Plan Advisory Committee to make recommendations.

The committee had met a handful of times since fall 2007. On March 12, the committee voted 6-2-1 to recommend the $10 million and $2 million formula to the council.

City council members adopted a resolution, 4-2, Monday night in support of the $10 million and $2 million and instructed city staff to draft redevelopment agreements with the two separate proposed projects. The agreements are still subject to the council’s approval.

The Independence Regional tax increment financing will be pay as you go instead of upfront bond payments.

“This is a unique situation where we have $12 million to distribute between two facilities for demolition or remediation,” Harlow said. “There is not a formal process or a formal timeline or even anything statutory in regards to a timeline.”

City Manager Robert Heacock said the city will work on a redevelopment agreement with specific deliverables and obligations on involved entities.

“In anything like this, there isn’t a guarantee per se that they will be successful,” Heacock said.

“The idea is to make sure that the funds are spent on tangible items that would have value to the facilities and would enhance its use, marketability and safety.”

“We’re doing everything we can to make sure that when we spend the money, you get what you think you’re getting,” City Counselor Allen Garner said. “We’re trying to make sure that at the end of the day, if we’ve spent the money, what’s there is a marketable property as is, without somebody else coming to us and saying, ‘I need additional support from the government.’”

–––

The Independence School District is listed as the final priority in the IRMC TIF cash flow. The district is willing to put its $5.5 million toward the redevelopment of Independence Regional, with a vested ownership interest.

At the March 5 advisory committee meeting, Ralph Ruckman, an advisory committee member representing the city’s Advisory Board of Health, asked about risks to the school district. Brian Mitchell, assistant superintendent of business and finance, said the district is concerned about the viability of the former hospital location and its effect on the community.

“We have a vested interested in what happens to that facility,” Mitchell said. “The TIF funds that were carved out for the Independence School District are really the only funds that we’re prepared to be able to dedicate to this project. Everything that we’re going to be able to accomplish must be accomplished through the use of those TIF dollars and also ongoing revenues generated through tenant rentals.”

David Edwards, a principal with CEAH Realtors, said Friday that optimistically, the City Council would hear the first reading of a redevelopment agreement involving the school district, Edwards Management Group LLC and the city at its April 6 meeting. The school district would own Phase 1 of the Independence Regional Entrepreneurial Center. Edwards Management Group LLC would own Phase 2, with Edwards as the developer and project manager for both phases.

Edwards wouldn’t disclose the sale price of Phase 1 or Phase 2. The sale prices will be made public after their closing, which Edwards anticipates will take place after the city approves a redevelopment agreement.

“It could be days or it could be a couple of weeks, but it will be soon there after,” Edwards said of the disclosing.

 

The proposed redevelopment plans for Independence’s two former hospitals:

Project: Independence Regional Entrepreneurial Center and business incubator
Location: 1509 W. Truman Road
Details: Phase 1 includes converting the south tower and former diagnostic area into the Independence Regional Entrepreneurial Center, totaling about 254,000 square feet. Phase 2 would convert the Truman Forest Medical Office Building into an IREC annex that would house incubator clients once they “graduate” a start-up phase.
The first floor space is still available for available use. In the former surgery and intensive care unit spaces, a culinary lab and kitchen would be located on the second floor. About 40 office suites would be available on the third floor with services available for entrepreneurs.  
Owners: The sale has yet to close. The Independence School District is willing to allocate its $5.5 million in Independence Regional Medical Center tax increment financing dollars toward ownership in Phase 1. Edwards Management Group LLC plans to own Phase 2. 

Project: Truman Manor, a gated community with condominiums for residents 55 years and older
Location: southeast corner of East 23rd Street and South R.D. Mize Road
Details: The development would include one- and two-bedroom condominium units and amenities like a pool, theater, hair stylist and bar. Selective demolition would take place, with retrofitting the former hospital and doctors’ building and construction of six new buildings.
Owners: Truman Manor LLC (Bruce Bird, a partner in Mid-America Hospital Management Company, is a project manager with Truman Manor). The former Medical Center of Independence was purchased for $3.9 million.