OSAGE BEACH, Mo. — A developer’s proposal to transform almost 14 acres of land at and around the Golden Door Motel and the vacant Jake’s Steak & Fish restaurant into a $30.5 million retail development cleared a final hurdle Thursday. 

The Osage Beach Board of Aldermen voted unanimously to approve a Tax Increment Financing (TIF) agreement between the city the project’s developer, TSG Osage Beach, LLC. The board will consider final approval of the ordinance at its next board meeting in two weeks. 

David Bushek, an attorney with Gilmore & Bell in Kansas City, helped to craft the contract, which filled 83 pages with various attachments and exhibits. The total amount of the TIF reimbursement requested by the developer is $4.55 million, or about 15 percent of the total project costs. 

The project also includes the establishment of a Community Improvement District, which lets the developer impose a 1 percent sales tax, which is expected to generate another $2 million. 

In return, the plan calls for a 131,000-square-foot retail center, expected to contain a mix of retail tenants and restaurants. City officials have said construction should begin this year, with completion expected by the spring of 2019. 

At Thursday’s meeting, Bushek highlighted a few key points of the agreement:  

  • As an incentive to induce completion of the project, the developer must construct at least 100,000 square feet of development to receive any reimbursement from the city. 
  • In four years, and for 10 years to follow, if the actual sales generated by the project are not at least 75 percent of the revenue projected in the TIF plan, the developer will pay the city the difference, up to $30,000 a year. 
  • It is a “pay as you go” plan, which means the city will not have to issue bonds to fund the reimbursable costs. In other words, the developer must privately finance the entire project. 
  • The agreement includes a public participation or profit restriction that mandates a maximum of 12 percent rate of return for the developer. If the average annual rate of return realized by the developer exceeds that threshold, the TIF reimbursement will be reduced accordingly, and the additional revenue passed on to the local taxing districts. 
  • If the tax valuation of the property is reduced by the county assessor during construction, the developer will make payments to the taxing districts to make up the difference in tax revenue. 
  • The developer cannot transfer more than 50 percent of ownership in the development without city approval. 

“There were extensive negotiations with the developer on this agreement,” Bushek said. “These are items that provide some safeguards and protections for the city.”


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