Super-TIF! Lake Of The Ozarks Oasis Development Catching Flak From School Board, County

CAMDEN COUNTY, Mo. — It’s the most-buzzed-about development project this year at the Lake of the Ozarks, but the planned $350M tourist hotspot Oasis at Lakeport has some elected officials buzzing with displeasure.

Last week, the Camdenton R-III School District of Board of Education (BOE) unanimously agreed to state their opposition to a TIF for the project. Board members present at the Wednesday, June 28 meeting were President Gail Griswold, Vice President Troy Risner, Treasurer Jacob Neusche, and members Brian Butts, Eric Walters, and Shelley Creed. Not present was board member Callie Henze. Henze did remotely sign a letter opposing the TIF.

Tax Increment Financing (TIF) is an increasingly common mechanism in which taxing entities (cities, counties, etc.) agree to divert some of the future tax revenues from a development project towards paying-off infrastructure developments related to that project. The Oasis TIF plan was unilaterally approved by the City of Osage Beach, in a special session meeting on Wednesday, June 28. Now the Oasis developers are seeking a similar TIF but for the state taxes to be levied at the development, known as a “Super-TIF.”

At issue for school board members: across the 23-year period of the TIF, the additional property taxes that would have been collected due to the dramatic increase in property value would instead go toward paying off development costs associated with infrastructure. Over 23 years, that has been estimated at roughly 40 million dollars.

However, developer Jeffrey Tegethoff points out the property brings very little revenue to the school district, being largely undeveloped. "The fact is the site currently generates about $40,000 per year in total taxes with the county receiving about $1,000 of that and the school district receiving about $28,000 of that," he said. "With no development on this site, nothing will change…. Maybe actually it will continue to decline. Nothing has been done on this site for a long, long time. There is a reason for that... no infrastructure." Tegethoff argues the diversion of tax dollars to pay for infrastructure brings long-term value to the community, and once the project is complete, it would still bring more net tax revenue into the school district than it currently does. He says the estimated personal property taxes on the property would bring $600,000 to the district.

"Dr. Kirksey told me that with the nearly $600,000 per year the school will receive from the development in the first year we will be the top [payer of personal property tax]. Then when these tools pay off, in a maximum of 23 years, everyone collects the full taxes again."

He added, "For the county, they only receive $1,000 per year currently from the development and will receive nearly $750,000 per year because of personal property and sales tax. For the County to not support this is just crazy."

(Real property taxes and personal property taxes are divvied up among multiple entities in the counties where they are collected.)

Tegethoff provided Lake Expo with a breakdown of the estimated tax revenue for the district with the TIF-funded Oasis vs. with no development. Here's the breakdown:

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The letter

At last week's meeting, the school board discussed the Oasis TIF project and approved sending a letter on district letterhead, signed by Camdenton R-III School District Superintendent Dr. Sean Kirksey and board members, to the Department of Economic Development (DED) and to Lt. Governor Mike Kehoe, stating the district’s position on the Oasis TIF. The DED is the group that oversees Super-TIFs.

According to the district, the project does not have the support of the majority of the elected officials in the community impacted by it or the property owners within the boundaries of the proposed TIF district. In the letter, the district communicated, “The City of Osage Beach officials and the developer have, for the most part, disregarded these concerns and have not worked with the community to develop a redevelopment plan to address any of the concerns identified by the County Commission, the Board of Education, and property owners within the TIF district itself.”

Camden County Commission

In a separate interview, Camden County Presiding Commissioner Ike Skelton said at their Thursday, June 29 commission meeting, county commissioners also approved sending a letter of concern regarding the Oasis TIF. The letter will be signed by all three commissioners and several county officials.

Skelton voiced concerns over the designation of undeveloped property as “blighted” (a necessary prerequisite to obtaining a TIF) for the purpose of a TIF. “This sets a bad precedence, and it is an abuse of the purpose of a TIF,” he said, adding that the Osage Beach Outlet Mall would better fit the definition of blighted for the purpose of redevelopment, since it is not highly marketable. Skelton also argued the Oasis development site is also lakefront property, “which is measured by the foot, not the acre.” He called lakefront property “the gold standard when it comes to real estate.”

The letter from the school board stated, “The developer has not fully acquired and does not own all the property within the TIF boundaries. Hundreds of time-share owners that share ownership of property within the TIF boundaries oppose the project and have shared multiple concerns including concerns with the blighting of their property which they currently use and enjoy.” That is in reference to the Lakewood Condos, which currently sit on a portion of the property where Tegethoff hopes to build. However, Tegethoff says he has been buying-out the individual timeshare owners one at a time, and many have been eager to sell. In an interview with Lake Expo, he pointed out timeshares are infamously difficult to sell, and said he was offering these owners a way out.

Skelton and some others have expressed concerns that a designation of blight could put the property in danger of being condemned and at risk for imminent domain.

“The Lake was partly built by hard-working individual condo owners coming back year after year,” Skelton said. “They live paycheck to paycheck and can get lost in the shuffle, but their rights matter.”

School board discussion

“One of our concerns, after talking to county commissioners, is the process by which the project was utilized early on,” Dr. Kirksey said. “One entity within our community, the City of Osage Beach, decided they wanted this project, but it impacts the entire Lake of the Ozarks and not everyone who will be impacted was involved in a collaborative decision.”

“We are not anti TIF or anti-development,” Dr. Kirksey said. “We just don’t want this type of process to be rewarded. If you look for every possible way to not support students and you don’t have the support of the rest of the county, we will not want a state TIF going towards that kind of project. We would rather save a TIF for a project that will benefit our kids.”

Tegethoff told Lake Expo he understands those concerns, but the process is laid out by state statute, so if opponents don’t like the process, they should take that to Jefferson City to get the law changed. Because the project would take place in Osage Beach city limits, the city government is the entity that approves or rejects the TIF plan — despite the fact that the tax implications would affect other entities, such as the county and school district. The TIF Commission that made a recommendation to the Osage Beach Board of Aldermen included Camdenton R-III School Board members Gail Griswold and Jacob Neusche, as well as Camden County Presiding Commissioner Ike Skelton. In April the commission made its recommendation to the city board of aldermen for approval of the TIF plan, but not unanimously: the vote was 7 - 4.

Hold harmless school district.

“It is important to continue to educate our community on what a “hold harmless district” means to us,” Board President Gail Griswold said. The district is locked into the 2005-2006 school year rate and even if they got higher enrollment, they would not get more money. According to Dr. Kirksey, the district will not be penalized if they do not meet the minimum requirement for the district’s tax levy, but they also will not receive any additional benefit.

“We are 80 percent locally funded, and this would have an immediate detrimental impact on our kids and our staff,” Dr. Kirksey said. It impacts us more than nearly every other school district in the state. When other school districts get half of their funding from state and federal, a TIF doesn’t hurt them as much.”

Dr. Kirksey said he had a conversation with the Oasis TIF developers last week, at which time they expressed a willingness to work with the school. “He said he would come back to talk after the fourth,” Dr. Kirksey informed the board. “We will see what they will voluntarily choose to do to help our kids. It is commendable, but we have not seen it yet.” District representatives also met with the developers in November 2022.

“We cannot broker deals that don’t support students and staff. Our infrastructure is the very reason people are choosing to live here. There is a reason why property values are higher in our district than in other places, it is because of the amenities…our hospital, roads, and schools. If we are not mindful of that, if we only support businesses and not infrastructure, people are going to move away.”

“We have a TIF that was better than 50/50 for affordable housing in Camdenton and the board was 100 percent in favor of that,” Dr. Kirksey said. “There is a development on KK that will also pay more than 50 percent, and other places that are not seeking a TIF and they can make it work. We are talking about the profit margin of the project, not the viability. I feel some of these projects are well within the margin to take care of the schools, they just have not.”

Concerns were voiced about a level playing field with similar businesses competing against TIF businesses that do not have to pay taxes and who have a lower investment. “This puts lake area municipalities in a compromising position,” Griswold added. “Many businesses are asking for the same treatment and other businesses will have to compete with them. This will have an economic impact for years. When you look at regional planning you have to understand what you allow in one place will affect the entire district, without us having a say. It is dangerous.”

Legislation

Commissioner Skelton recommended two changes to TIF regulations at the state level. “A municipality should not have the authority to override a county’s taxable base,” he said. “With a chapter 353 development, as with the apartment complex by the Osage Beach school, it abates county and school taxes without asking school or county permission. Also, no TIF should be approved if there is a similar business operating in that same area.”

According to Dr. Kirksey, the Oasis project is the second project within the last year that this developer has sought and received significant tax abatement from the City of Osage Beach. The previous project did not have the support of the school district or the County Commission either and was also approved unilaterally.

In the letter to the DED the school board stated:

If projects developed in this manner without community support receive additional state aid and support through a State TIF, we are very concerned that other developers will be encouraged by that precedent and will also work to find every possible way to avoid supporting our community instead of working with us.

Based on the concerns and others that can be shared, we have two requests:

1. We would like to ask for an opportunity to travel to Jefferson City and meet with representatives from your department to discuss our concerns regarding the request from the City of Osage Beach for a State TIF.

2. We would respectfully ask that, when considering the request for the State TIF, please deny the request based on the fact that the project does not have the support of the majority of the elected officials within the community impacted and does not have the support of hundreds of property owners.