Board approves first readings of incentives package for Butterfly Palace expansion

The Branson Board of Aldermen on first reading approved a multi-part incentives package to support a proposed $11,469,059 expansion of the Butterfly Palace, including a Community Improvement District (CID), a sales-tax reimbursement agreement and a Chapter 100 industrial-development plan.

City officials said the package would rely on performance-based reimbursements and tax exemptions rather than direct city appropriations. Staff estimated total public participation of about $2,111,338 — roughly 18.41% of the project cost — and described the city’s anticipated reimbursement cap as 12.46% of project costs.

The package combines three mechanisms. City-contracted advisers said the proposed CID would levy a 1% sales-and-use tax just on purchases at the Butterfly Palace parcel; the Board would certify CID collections and then reimburse eligible construction costs, with the applicant expecting roughly $1,019,057 in CID reimbursements over the district’s 27-year term. A sales-tax reimbursement agreement would reimburse only the incremental city sales-tax revenue generated after the expansion; staff estimated roughly $409,665 in reimbursements under that agreement. Under a Chapter 100 industrial development plan, the city would briefly become the nominal property owner so the developer could use a city sales-tax exemption certificate on construction materials and receive abatement only on incremental real-property tax increases; staff estimated construction-material sales-tax savings in the project analysis and proposed a 25-year Chapter 100 term.

City financial adviser Tom Calico of Baker Tilly told the board the project “passes the but‑for test” and that the applicant demonstrated needed financial and managerial capacity. Calico also projected the city would receive roughly $4.8 million in incremental tax revenue over the term of the incentives as the project produces increased activity.

Developers and their counsel briefed the board in a public hearing and said the expansion would add an event center, a new third level of exhibits, parking facilities and a roof replacement for the existing aviary. The development agreement requires certifications by the city before any reimbursement is paid: the city must verify the work and eligible costs and may withhold reimbursements if the agreed conditions are not met.

Board members and staff emphasized safeguards: reimbursements are ‘‘pay‑as‑you‑go’’ and contingent on revenue generation, the city will continue to collect its base sales and property taxes, and the developer must provide receipts for materials purchased in the city so officials can track local sales-tax foregone under the Chapter 100 exemption.

The Board approved first readings and related ordinances by voice vote. The ordinances considered included first readings of bill nos. 65‑44 (development agreement), 65‑45 (establishing the Butterfly Palace CID), 65‑46 (cooperative agreement governing the CID), and 65‑47 (Chapter 100/industrial development plan and authorization to engage bond counsel). All measures passed first reading and will return for second reading and final action as required by city ordinance.

Supporters said the project targets a unique attraction and would expand year‑round visitation; some speakers and board members asked that the city keep close oversight of reimbursements and reporting.