An agreement between the city of Ozark and a real estate development group clears the way for a new housing development to be built along with some street improvement work in Ozark's busiest business district.

On March 1, the Ozark Board of Aldermen voted 6-0 to extend a transportation development district (TDD) agreement with Ozark Centre, the developers of the commercial district that includes the Ozark Walmart and surrounding retail stores off of South Street and U.S. Highway 65.

The Ozark Centre TDD organized in September 2003 with a 3/8-cent sales tax on purchases made within its boundaries. The Ozark Centre is the development off of U.S. Highway 65 and South Street. The sales tax has since been increased to 1 percent. The sales tax revenue from the Walmart, Lowe’s, Dollar Tree, Maurices and other surrounding stores accumulated faster than first thought possible, and financed construction and improvements on West Marler Lane, South 20th Street and surrounding streets that service the commercial district. The money from the additional sales tax must be spent on transportation improvements within the area of the transportation development district area.

On Feb. 16, developers presented the Ozark Board of Aldermen with a plan to extend the TDD agreement and a new project list with new debt for improvements within the Ozark Centre development. It would also allow the city of Ozark to capture some funding and make transportation improvements within the boundaries of Ozark's key commercial district. The city of Ozark would stand to recuperate about 30 percent of the funds that the sales tax captures. The additional tax that the TDD imposes is designed to generate an average of $1.1 million per year.

The agreement allows the Ozark Centre developer to capture 70 percent of the funding from the additional sales tax to do two major projects, the extension of South 19th Street and the buildout of a residential subdivision. At the same time, Ozark will capture 30 percent of the additional sales tax revenue for at least five projects: a street connecting Marler Lane and South 15th Street, milling and overlay of existing streets, traffic signal cabinet upgrades, sidewalk and ADA accessibility improvements within the business district and a traffic study.

Ward 1 Alderman Nathan Posten sponsored the bill that led to the agreement extension between Ozark and the Ozark Centre developer. As one of the alderman for Ozark's southernmost ward, he said that the intersection of 15th Street and South Street has been a recurring theme for him when it comes to emails and phone calls from residents.

"The 15th Street intersection is the item that I get more complaints about than anything else, especially now that we've South Street five-lane, trying to make a left turn out of there is a nightmare, so I think any project that can address that, realign that intersection and give those people the ability to make a left turn out of those neighborhoods back there is a good thing," Posten said.

The use of the TDD economic development tool to partially fund the construction of a housing development was new to the Ozark Board of Aldermen, which Posten noted. Plans for a residential subdivision with at least 170 lots are included in the documentation that the Ozark Board of Aldermen reviewed.

"I'm a little nervous about doing this type of--this TDD with a residential component. I know it's unusual, we haven't done that a lot," Posten said.

The nervousness did not sway Posten's bill sponsorship or vote.

"There is no doubt that this is a pretty good deal for Ozark. We've worked really hard to get development on the south side," Posten said. "We've got a lot of infrastructure in the ground that's just sitting there-- a water plant that could use some additional work--so if this is the catalyst that gets that going, then hey, I'm on board with that."

The new projects specified in the TDD agreement include about $2 million for improvements to signalized intersections that are now more than 15 years old.

The project list includes about $6.7 million to construct public streets and residential collector streets, plus $1.6 million to extend 19th Street from Tennison Drive to a proposed residential collector street.

Speaking on behalf of the developer, attorney Robb Preston added that the sales tax is only charged to people who shop at businesses inside the Ozark Centre district.

Preston offered that the agreement includes money to maintain roads and sidewalks once they are built.

"It does provide in the agreement a maintenance fund, and those funds, particular projects, haven't been established yet, but the goal of that would be to maintain the existing streets within the footprint of the TDD," Preston said.

Examples would include mill overlay and sealing roads.

The Ozark Centre has been so successful that the developer paid off the original bond debt faster than anticipated, which was discussed at an Ozark Board of Aldermen meeting in August 2020. When a successful TDD agreement is about to expire, Preston said that it’s common for the developer and the board of directors that oversees the TDD to seek additional projects.

Preston notes that a TDD does not divert tax dollars that Ozark would otherwise have access to in the manner that tax increment financing (TIF) does. Instead, a TDD is funded through an additional sales tax above and beyond what Ozark, Christian County and the state of Missouri already collect.

The agreement, Preston said, helps make sure that the roads are constructed according to the standards expected of city streets in Ozark. The agreement spells out that the roads will be turned over to the city of Ozark for control and maintenance when they are complete.

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