Committee backs Jefferson Arms redevelopment plan including SID/TDD revenues to support TIF

The Housing, Urban Development and Zoning Committee voted to forward Board Bill 19 with a do-pass recommendation after discussion of tax-increment financing (TIF), a special improvement district (SID) and a tourism development district (TDD) tied to the Jefferson Arms redevelopment.

Alderman Aldridge introduced the bill and brought forward Nick Hartzler, senior project manager for Steadfast City, to explain the incentive package. Hartzler said a TIF redevelopment plan was originally approved in 2017 and amended in 2021 to address delays and added MWBE requirements; the project’s original budget of $105,000,000 has risen to approximately $135,000,000. To preserve the proportional incentive value without increasing the city’s TIF dollar amount, the bill would (1) authorize the SID to levy a special assessment of up to $5 per hotel room night and up to 1% in SID sales tax on retail sales, (2) allow the SID and the TDD to run their full statutory 25-year life so the districts can capture additional unpledged revenues after the TIF note is repaid, and (3) direct SID/TDD revenues to pay the TIF note while it remains outstanding.

Hartzler described the planned development as roughly 225 hotel rooms, about 235 apartments and seven ground-floor retail stalls including restaurants and small businesses. He said the TIF note will be paid first from SID and TDD revenues while the TIF remains outstanding; after the TIF expires (noted in committee as 02/1940), unpledged revenues would accrue to the districts for the remainder of their authorized life.

Committee members asked about public notice, board composition, oversight and transparency. Hartzler said the public notice was mailed and published and that Steadfast City will assist the districts with annual compliance and public meeting postings. The bill contemplates a five-member SID board with three developer-appointed representatives (named in the petition as Mike Saramsacchi, Jose Casada and Emery Terrazi) and two city-appointed seats.

One committee member noted concern about single-site SIDs because developer representatives would hold three of five board seats and because SID sales taxes are collected at the point of sale; that member voted no. A public commenter, Justina Grama, urged the committee to consider longer-term revenue impacts to neighborhoods and asked who owns the property; committee discussion identified the owner as Alterra Jefferson Arms LLC with parent Alterra Worldwide.

A motion to give Board Bill 19 a do-pass recommendation was made by Alderman Browning and seconded by Alderman Keyes. The clerk recorded six aye votes and one no vote; the bill was forwarded with a do-pass recommendation.

If the bill becomes final, the city record shows the following specific authorizations in the measure before the committee: an SID special assessment of up to $5 per occupied hotel room night; authorization for the SID and the TDD to impose up to 1% sales tax each (sales tax rates described as additive to existing taxes); direction that SID/TDD revenues be applied first to the TIF note while it remains outstanding; and authorization that the districts run their full 25-year maximum terms. The committee record did not specify final board appointments, the bank/investor that may monetize the TIF note, or an exact timeline for when the districts would begin collections.

Votes at committee: do-pass recommendation on Board Bill 19 (yes: 6; no: 1).