Newspaper article St Louis Post-Dispatch (MO)

Joplin's Post-Tornado TIF Faces Whirlwind of Criticism

Newspaper article St Louis Post-Dispatch (MO)

Joplin's Post-Tornado TIF Faces Whirlwind of Criticism

Article excerpt

Joplin, Mo., had an open-and-shut case for blight after the killer tornado of 2011 destroyed or damaged 7,500 homes.

Under Missouri law, blight makes a property eligible for tax-increment financing, a popular development subsidy. The other requirement is called the "but-for" test: Officials must decide a development wouldn't have happened without the subsidy.

Blighting is usually the controversial part of the TIF process. In the St. Louis area, developers have "blighted" everything from farmland to an upscale shopping mall in their quest for handouts.

In Joplin, the blight was obvious when city officials approved a TIF in 2012. The "but-for" test, however, has people asking questions nearly five years later.

The Show-Me Institute, a free-market think tank, recently published a case study alleging that Joplin's subsidies "appear to have done little more than allow for mismanagement and profiteering." State Auditor Nicole Galloway also criticized the TIF in a 2015 audit, saying city officials overpaid for properties and wrote an agreement to benefit a Texas-based developer.

The Texas firm, Wallace Bajjali Development Associates, was chosen as master developer for the Joplin TIF and collected nearly $1.5 million in fees, according to the audit. Wallace Bajjali fell apart in early 2015 amid fraud allegations, having done nothing to rebuild Joplin.

That doesn't mean Joplin didn't get rebuilt. The tornado reduced assessed values by an estimated $34 million, but they were back to the pre-storm level by 2015.

That's the heart of the criticisms. Patrick Tuohey, author of the Show-Me Institute study, says Joplin officials ignored the fact that insurance money would replace damaged buildings.

"We were able to see what happens when you don't use TIF, and Joplin is a great success story," Tuohey said.

He also says officials rushed to get the TIF in place by the end of 2012, when property values were at their post-storm low. …

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