THE DEVELOPMENT AGREEMENT MYTH: City Hall spin inaccurately portrays Opus repeal

Ready infrastructure is not a developer "right"

COLUMBIA, Mo 6/18/14 (Analysis) -- If you've been following efforts to repeal a development agreement with the Opus Group to build a six-story student apartment downtown, you've doubtless heard something like this:

"If the development agreement is repealed, all that happens is the city loses the developer's $450,000 'contribution' to infrastructure.   Opus can still build their student apartments.  It meets all zoning requirements.  All they have to do is get a building permit." 

But that's not true, and the Council members incorrectly repeating it -- Michael Trapp, Ginny Chadwick, Bob McDavid, and Laura Nauser -- are apparently unfamiliar with city ordinances governing public works.

What's more, if City Halls allows Opus to build with a permit alone, it signals hundreds of other developers that development agreements are no longer required, including Stan Kroenke, who must secure such an agreement for his University Centre strip mall next to Lucky's Market on Providence. 

Council members on Monday repealed one of two development agreements with Opus after citizen petitioners successfully demanded it.   Repeal of the second agreement awaits validation of a second citizen petition.  

Unlike the construction of a single house, the Opus project involves considerable spending on public improvements such as sewers, sidewalks, and utility lines.   City ordinance requires development agreements whenever the public must make such improvements to accomodate private builders.

Ready infrastructure is not a "right" granted to developers, and the city has no obligation to provide it, despite Councilwoman Nauser's admonitions to the contrary.   Development agreements are required to secure it, and are so important, they have their own section of city law, Section 22-75, "Development Agreements".   

"The city council may, by ordinance, authorize the city manager to enter into agreements that require city contributions toward the cost of city public improvements," the ordinance explains.   Without such an agreement, the developer would have to pay for all public upgrades, which downtown have a price tag in the millions of dollars.  

Under its development agreement, Opus only has to pay $450,000 toward public improvements.    It's a big developer win that Opus' Council allies have given an inaccurate Council spin.   

Repealing the Opus agreement will cost the city $450,000, they say.   But the reality is that repealing the agreement will cost Opus, forcing it to pay for everything.    Instead of a $450,000 taxpayer loss, repealing the Opus agreement delivers a multimillion-dollar taxpayer win.

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For argument's sake, let's say City Hall issues a building permit to Opus without a development agreement.  What then?  

Not only would the developer have to pay for every foot of new sewer line, every inch of sidewalk, every kilowatt of electricity with no help from John and Jane Q. Tax-and-Rate Payer, but each improvement would be subject to the city's lengthy "public improvement process," which includes "interested party meetings" and public hearings.   

With a development agreement, "public improvements shall not be subject to the public improvement process," Section 22-75 says.   Council members approve any required public improvements with the project itself, with one public hearing, one public process.

But without a development agreement, everytime the developer needs to improve public property, the public gets to weigh in.   One public hearing becomes ten, in addition to umpteen "interested party meetings," a rigorous public bidding process, and more attorney hours than the developer ever thought possible. 

It's like adding insult to injury:  the developer is paying for all the public improvements, yet still has to get public input. 

Finally, what about all those other agreements with all those other developers?  Here's a sampling:  B&E Investment; CrossCreek Center; THF Grindstone Plaza; and this note to Kroenke from City Hall about his strip mall next to Lucky's: 

"No construction permits will be issued until a development agreement is reached between the City and developer to resolve the existing sanitary sewer capacity issues that currently affect the site." 

What will Opus' four Council supporters (who sound like the Opus public relations department) tell every other developer if they give Opus special treatment?   If City Hall is worried about lawsuits now, wait until the City Council waives the development agreement requirement for one out-of-state developer. 

-- Mike Martin