Outlet Mall Revival: Tax Incentive Gets Thumbs-Up, As Developers Eye Bass Pro Groundbreaking

OSAGE BEACH, Mo. — Redevelopment of the nearly-vacant Osage Beach Outlet Mall took a major step forward on Tuesday, May 12, when the Osage Beach TIF Commission voted nearly unanimously to recommend approval of the developers’ plan.

This was the third TIF Commission meeting, and commissioners voiced general satisfaction with the plan and optimism about the future of the mall. With the TIF Commission’s approval, the proposal now goes to the Osage Beach Board of Aldermen for their consideration.

John Hansen, with IRR Corporate and Public Finance — the public finance consultants for the development team — told the Commission the project investment was expected to be over $640 million. At that amount, he said, the project’s estimated return-on-investment without incentives such as a TIF would be -1.44%.

The TIF plan requested:

• 100% of the PILOT (Payment In Lieu Of Taxes) tax revenue from the project — e.g., the incremental property tax revenue created by the project (beyond the property tax revenue currently generated on the property)

• 50% of the economic activity (sales, etc) tax revenues from the project

“The base revenues will continue to generate property tax and sales tax revenues as they do today for the project. We're simply requesting a portion of the incremental taxes that we generate from the project,” he explained.

The additional incentives include a city hotel sales tax rebate, CI and TDD sales taxes, an entertainment district sales tax, CI special assessments, which are an additional assessment that go on the property tax bill for the property owners of the project, and a chapter 100 sales tax exemption on construction materials.

Hansen said those incentives would add up to about 10% of the total project cost and would change the -1.44% projected return on investment to an estimated 6.55% return.

He cited the following projected benefits to the city and county:

• $4.6 million in new annual tax revenues for local taxing districts, with over $2.1 million in new annual tax revenues for the city of Osage Beach, (annually, during the 23-year TIF period)

• $110+ million in total new tax revenue over 23 years to the local taxing districts.

• 4,000+ full-time construction jobs, anticipated over the course of the development of the project.

• 1,000+ permanent jobs, including new and retained jobs within the project.

Developer Dave Mashburn spoke to the Commission during the meeting. He revealed his background having worked for renowned hotelier John Q Hammons for years and later serving as Director of Development for Johnny Morris’ Bass Pro Shops. So, he said, when they began looking for an anchor store in the redevelopment of the outlet mall, he reached back out to his old employer.

“I reached back out to Bass Pro and had some great discussions with them,” he said. “They honestly weren't really familiar with the area. So, we did a little educating with them and kind of brought them up to speed.”

Mashburn said the Bass Pro team loved the idea of helping anchor a redevelopment. “And certainly the location with the adjacency to the highway and the visibility that that provides really caught their attention,” he said. In the developers’ map, the Bass Pro Shops is shown at the very back of the site, with visibility from Highway 54.

Then, Mashburn said, after Bass Pro was on board, things got even more interesting.

“After they made the press release, just a few days later, they called and significantly expanded the project,” he said. “They wanted to include a food and beverage component and kind of a family entertainment game concept that they're doing. So that was another big vote of confidence in the market for them.”

Developer Chris Foster also spoke to the Commission at length, telling them they planned to start construction “immediately once we get the TIF ordinance passed.”

He emphasized, “You’ll see immediate progress.”

There was an urgency to Foster’s presentation as well. “We need to get started ASAP,” he said, “because we are under a timeline to deliver Bass Pro a pad site.”

He also explained more about what made Lake of the Ozarks appealing to Bass Pro. “The discussion about bringing Bass Pro to the lake has been decades,” he said. “Maybe we were overlooked for different reasons… But whenever you look at the number of fishing tournaments that are here… I think there's 141 bass tournaments every year. Dave Mashurn was helpful with me looking all these numbers up and then communicating those to the Johnny Morris team.”

Foster said once the Bass Pro team saw that information, their response was, “Why are we not there already?” He said that response felt like vindication, noting, “The Lake has been overlooked for quite some time.”

The motion to approve the developers’ plan passed, with 10 voting Yes and 1 commissioner voting No. The No vote came from Commissioner Jacob Neusche, who said he was in favor of the project but was compelled to vote No as a member of the Camdenton School Board. “That no is based solely on school board policy regarding the TIF structure, not the merits of the project itself,” he said.

By contrast, Commissioner Brian Butts, who also serves on the Camdenton School Board, voted Yes.

Butts said his perspective on the proposal is that the City of Osage Beach is “considering taking a financial risk for the hope of a return.” He added, “If nothing happens with this property, [there’s never] going to be a return.”