$16,650,000 CITY OF BALLWIN, MISSOURI TAX INCREMENT REFUNDING AND IMPROVEMENT REVENUE BONDS SERIES 2002A (BALLWIN TOWN CENTER REDEVELOPMENT PROJECT)

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1 NEW ISSUE NOT RATED Book Entry Only In the opinion of Armstrong Teasdale LLP, Bond Counsel, under existing law and assuming continued compliance with certain requirements of the Internal Revenue Code of 1986, as amended, the interest on the Bonds (including any original issue discount properly allocable to an owner thereof) is excluded from gross income for federal and Missouri income tax purposes, and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. The Bonds have not been designated as qualified tax-exempt obligations within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. See the section herein captioned TAX MATTERS and the form of Opinion of Bond Counsel attached hereto as Appendix D. $16,650,000 CITY OF BALLWIN, MISSOURI TAX INCREMENT REFUNDING AND IMPROVEMENT REVENUE BONDS SERIES 2002A (BALLWIN TOWN CENTER REDEVELOPMENT PROJECT) $3,450,000 CITY OF BALLWIN, MISSOURI TAX INCREMENT REFUNDING AND IMPROVEMENT REVENUE BONDS SERIES 2002B (BALLWIN TOWN CENTER REDEVELOPMENT PROJECT) Dated: Date of Issuance and Delivery Due: As shown on the inside cover hereof The Tax Increment Refunding and Improvement Revenue Bonds, Series 2002A (Ballwin Town Center Redevelopment Project) (the Series 2002A Bonds ) and the Tax Increment Refunding and Improvement Revenue Bonds, Series 2002B (Ballwin Town Center Redevelopment Project) (the Series 2002B Bonds and collectively with the Series 2002A Bonds, the Bonds ) are being issued by the City of Ballwin, Missouri (the City ), pursuant to a Trust Indenture dated as of May 1, 2002 (the Indenture ), between the City and Commerce Bank, N.A., Kansas City, Missouri as trustee (the Trustee ), for the purpose of (1) refunding the outstanding tax increment revenue notes of the City, plus accrued interest thereon, issued to finance public improvements within a portion of the Redevelopment Area (as described herein) referred to herein as Redevelopment Project Sub-Area 2A ( Sub-Area 2A ), (2) refunding all of the outstanding transportation development district revenue notes of the Ballwin Town Center Transportation Development District (the District ), plus accrued interest thereon, issued to evidence the obligation of the District to reimburse moneys advanced by Regency/DS Ballwin, LLC, a Missouri limited liability company (the Developer ), to finance a portion of the costs of construction of a connector road (the Connector Road ), including traffic signals and other related road improvements, in the Redevelopment Area, (3) providing additional financing for the Transportation Project and the Redevelopment Project (as such terms are defined herein), (4) funding capitalized interest on the Bonds, (5) funding a debt service reserve fund for the Bonds, and (6) paying the costs of issuance of the Bonds. The Bonds are special, limited obligations of the City, payable solely from Payments in Lieu of Taxes, Economic Activity Tax Revenues, TDD Revenues and Municipal Revenues (as all described herein) generated within Sub-Area 2A and certain moneys on deposit under the Indenture, including amounts in a Debt Service Reserve Fund for the Bonds. See the section herein captioned SECURITY AND SOURCES OF PAYMENT FOR THE BONDS. The application of Economic Activity Tax Revenues and Municipal Revenues to the payment of the Bonds, as described herein, is subject to annual appropriation by the City. The application of TDD Revenues to the payment of the Bonds, as described herein, is subject to annual appropriation by the District. The Bonds are issuable only as fully registered bonds and, when issued, will be registered in the name of Cede & Co., as nominee for The Depository Trust Company ( DTC ), New York, New York, which will act as securities depository for the Bonds. Purchases of beneficial interests in the Bonds will be made in book-entry-only form, in denominations of $5,000 or any integral multiple thereof. So long as Cede & Co. is the registered owner of the Bonds, purchasers of beneficial interests ( Beneficial Owners ) will not receive certificates representing their interests in Bonds, payments of the principal of, premium, if any, and interest on the Bonds will be made directly to DTC or Cede & Co., and references herein to the owners of the Bonds shall mean Cede & Co. See the section herein captioned THE BONDS Book-Entry-Only System. Principal on the Bonds will be paid on October 1 in each year and, for the Series 2002A Bonds, will begin on October 1, 2003, as shown on the inside cover hereof. Principal on the Series 2002B Bonds will be paid in accordance with the provisions of the Indenture. See the section herein captioned THE BONDS Redemption. Interest on the Bonds will be payable semiannually on April 1 and October 1 in each year, beginning on October 1, The Bonds are subject to redemption prior to maturity under certain circumstances as described herein. It is expected that a substantial portion of the Bonds will be redeemed prior to maturity. See the sections herein captioned THE BONDS Redemption and PROJECTED NET REVENUES AND NET DEBT SERVICE. THE BONDS DO NOT CONSTITUTE A GENERAL OBLIGATION OF THE CITY OR THE DISTRICT AND DO NOT CONSTITUTE AN INDEBTEDNESS OF THE CITY, THE DISTRICT OR THE STATE OF MISSOURI (THE STATE ) OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION OR LIMITATION. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE DISTRICT, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THE BONDS. THE ISSUANCE OF THE BONDS SHALL NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE THE CITY, THE DISTRICT, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF TO LEVY ANY FORM OF TAXATION THEREFOR OR TO MAKE ANY APPROPRIATION FOR THEIR PAYMENT. The Bonds involve a high degree of risk and are not a suitable investment for all persons. Prospective purchasers should carefully evaluate the risks and merits of an investment in the Bonds, confer with their own legal and financial advisors and be able to bear the risk of loss of their investment in the Bonds. See the section herein captioned BONDOWNERS RISKS. The Bonds are offered when, as and if issued by the City and accepted by the Underwriter, subject to the approval of legality by Armstrong Teasdale LLP, St. Louis, Missouri, Bond Counsel, and certain other conditions. Certain legal matters will be passed upon for the City by Polster, Lieder, Woodruf & Lucchesi, St. Louis, Missouri, for the District and the Developer by The Stolar Partnership, St. Louis, Missouri, and for the Underwriter by Thompson Coburn LLP, St. Louis, Missouri. It is expected that the Bonds will be available for delivery through the facilities of DTC on or about June 6, The date of this Official Statement is May 21, 2002.

2 MATURITY SCHEDULES Series 2002A Bonds $6,245,000 Series 2002A Serial Bonds Maturity Principal Interest Price or Maturity Principal Interest Price or (October 1) Amount Rate Yield (October 1) Amount Rate Yield 2003 $ 190, % % 2009 $ 760, % 5.45% , , , , , , , , , $1,780, % Series 2002A Term Bonds due October 1, 2015 Price % $2,500, % Series 2002A Term Bonds due October 1, Price % $6,125, % Series 2002A Term Bonds due October 1, Price % Series 2002B Bonds $3,450, % Series 2002B Term Bonds due October 1, Price %

3 CITY OF BALLWIN, MISSOURI Manchester Road Ballwin, Missouri MAYOR Robert E. Jones BOARD OF ALDERMEN Bruce Anderson Kenneth W. Buermann Kay L. Easter Charley Gatton Ray Lembke Press McDowell James Robinson Jane Suozzi CITY OFFICIALS Robert Kuntz, City Administrator Glenda Loehr, Finance Director Thomas Aiken, Assistant City Administrator/City Clerk/Planner CITY COUNSEL Polster, Lieder, Woodruf & Lucchesi St. Louis, Missouri BOND COUNSEL Armstrong Teasdale LLP St. Louis, Missouri UNDERWRITER A.G. Edwards & Sons, Inc. St. Louis, Missouri COUNSEL TO THE UNDERWRITER Thompson Coburn LLP St. Louis, Missouri

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5 REGARDING USE OF THIS OFFICIAL STATEMENT THE BONDS HAVE NOT BEEN REGISTERED WITH ANY STATE SECURITIES AGENCY OR THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON THE EXEMPTION CONTAINED IN SECTION 3(a)(2) OF SUCH ACT. THE INDENTURE HAS NOT BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH ACT. NEITHER THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE BONDS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The information set forth herein has been obtained from the City, the Developer and other sources which are deemed to be reliable, but is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation by, the City. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. No dealer, broker, salesperson or any other person has been authorized by the City to give any information or make any representations, other than those contained in this Official Statement, in connection with the offering of the Bonds, and if given or made, such other information or representations must not be relied upon. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any state in which it is unlawful for such person to make such offer, solicitation or sale. The information herein is subject to change without notice, and neither the delivery of this Official Statement nor the sale of any of the Bonds hereunder shall under any circumstances create any implication that there has been no change in the affairs of the City or the other matters described herein since the date hereof. IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

6 TABLE OF CONTENTS INTRODUCTION... 1 Purpose of Official Statement... 1 The City and Proceedings Relating to the Redevelopment Project... 1 The District... 2 The Bonds... 3 Security and Sources of Payment for the Bonds... 4 The Redevelopment Project... 5 Bondowners Risks... 5 Continuing Disclosure... 5 Revenue Projections... 5 Definitions, Summaries of Documents and Additional Information... 5 THE BONDS... 7 General... 7 Registration, Transfer and Exchange Upon Discontinuance of Book-Entry System... 7 Redemption... 8 Payment and Discharge Book-Entry-Only System SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Limited Obligations; Sources of Payment Revenues Indenture Funds and Accounts Debt Service Fund Debt Service Reserve Fund Project Fund Pass-Through Fund PLAN OF FINANCE Purpose of the Bonds Sources and Uses of Funds Special Mandatory Redemption of the Series 2002B Bonds PROJECTED NET PROCEEDS AND NET DEBT SERVICE TAX INCREMENT FINANCING IN MISSOURI Overview The TIF Act Assessment and Collection of Ad Valorem Taxes Collection of Economic Activity Tax Revenues THE CITY THE DISTRICT Overview TDD Sales Tax Cooperation Agreement THE REDEVELOPMENT PROJECT City Proceedings The Developer The Manager Competition THE OCCUPANTS OF THE REDEVELOPMENT PROJECT...29 Tenants Olde Towne Plaza...29 Lease Provisions...30 Information Regarding Major Anchor Tenants...30 BONDOWNERS RISKS...30 Nature of the Obligations...30 Non-Appropriation...31 Financial Feasibility of the Redevelopment Project...31 Reliance on the Developer, Tenants and Subsequent Property Owners...31 No Mortgage of the Redevelopment Project...32 Failure to Maintain Levels of Assessed Valuation...32 Pending TIF Litigation...32 Changes in State and Local Tax Laws...33 Reductions in State and Local Tax Rates...33 Limitations on Remedies...33 Early Redemption of the Bonds...33 Changes in Economic and Market Conditions...33 Factors Affecting EATs, Municipal Revenues and TDD Revenues...34 Projections...34 Availability of Debt Service Reserve Fund...34 Determination of Taxability...34 LITIGATION...35 LEGAL MATTERS...36 TAX MATTERS...36 Opinion of Bond Counsel...36 Other Tax Consequences...37 CONTINUING DISCLOSURE...37 CERTAIN RELATIONSHIPS...37 UNDERWRITING...38 MISCELLANEOUS...38 APPENDIX A: APPENDIX B: APPENDIX C: APPENDIX D: INFORMATION REGARDING THE CITY OF BALLWIN, MISSOURI TAX INCREMENT FINANCING REVENUE PROJECTIONS DEFINITIONS AND SUMMARIES OF THE INDENTURE AND THE CONTINUING DISCLOSURE AGREEMENT FORM OF OPINION OF BOND COUNSEL

7 OFFICIAL STATEMENT $16,650,000 CITY OF BALLWIN, MISSOURI TAX INCREMENT REFUNDING AND IMPROVEMENT REVENUE BONDS SERIES 2002A (BALLWIN TOWN CENTER REDEVELOPMENT PROJECT) $3,450,000 CITY OF BALLWIN, MISSOURI TAX INCREMENT REFUNDING AND IMPROVEMENT REVENUE BONDS SERIES 2002B (BALLWIN TOWN CENTER REDEVELOPMENT PROJECT) INTRODUCTION The following introductory statement is subject in all respects to more complete information contained elsewhere in this Official Statement. The order and placement of materials in this Official Statement, including the Appendices, are not to be deemed to be a determination of relevance, materiality or relative importance, and this Official Statement, including the cover page and the Appendices, must be considered in its entirety. The offering of the Bonds to potential investors is made only by means of the entire Official Statement. Purpose of Official Statement The purpose of this Official Statement is to furnish information relating to (1) the City of Ballwin, Missouri (the City ) and the Ballwin Town Center Transportation Development District (the District ), (2) the City s Tax Increment Refunding and Improvement Revenue Bonds, Series 2002A (Ballwin Town Center Redevelopment Project), in the principal amount of $16,650,000 (the Series 2002A Bonds ) and the City s Tax Increment Refunding and Improvement Revenue Bonds, Series 2002B (Ballwin Town Center Redevelopment Project), in the principal amount of $3,450,000 (the Series 2002B Bonds and collectively with the Series 2002A Bonds, the Bonds ), (3) a retail development located within Sub-Area 2A of the Redevelopment Area (as described below) in the City, known as Olde Towne Plaza (the Redevelopment Project ), developed by Regency/DS Ballwin, LLC, a Missouri limited liability company (the Developer ). The City and Proceedings Relating to the Redevelopment Project The City, the issuer of the Bonds, is a political subdivision and a fourth-class city of the State of Missouri (the State ). The City is located in St. Louis County, Missouri, approximately 20 miles from downtown St. Louis, and has a population of approximately 31,283. See APPENDIX A: INFORMATION REGARDING THE CITY OF BALLWIN. The City created the Tax Increment Financing Commission of the City of Ballwin, Missouri (the TIF Commission ) in 1999 for the purpose of implementing tax increment financing in an area of the City known as the Ballwin Town Center area, as identified in the Ballwin Town Center Redevelopment Tax Increment Financing (TIF) Redevelopment Plan (the Redevelopment Plan ). The Redevelopment Plan addresses redevelopment in an area within the City (the Redevelopment Area ), which is divided into two redevelopment project areas which are further divided into sub-areas. The Redevelopment Project is located in Redevelopment Project Sub-Area 2A ( Sub-Area 2A ). See the section herein captioned THE REDEVELOPMENT PROJECT. The maps on the next two pages illustrate the Redevelopment Area and its sub-areas, including Sub-Area 2A, and the location of the Redevelopment Area relative to the City of St. Louis, Missouri. Only Net Proceeds (as defined herein) derived from Sub-Area 2A are available to pay debt service on the Bonds. See the section herein captioned SECURITY AND SOURCES OF PAYMENT OF THE BONDS.

8 The District The District is a political subdivision of the State created pursuant to the Missouri Transportation Development District Act, sections through of the Revised Statutes of Missouri, as amended (the TDD Act ), for the purpose of financing the costs of constructing a connector road within the Redevelopment Area, including traffic signals and related improvements (the Connector Road ), and any additional road-improvement projects within the Redevelopment Area, as authorized by the TDD Act and contemplated by the Redevelopment Plan (collectively with the Connector Road, the Transportation Project ). The District has issued $850,000 aggregate principal amount of transportation development district revenue notes (the TDD Notes ) to the Developer to evidence the District s obligation to repay moneys advanced by the Developer to finance a portion of the costs of the Connector Road. See the sections herein captioned THE DISTRICT and THE REDEVELOPMENT PROJECT for further discussion of the District and the road improvements financed by TDD Revenues (as defined herein). The Redevelopment Area - 2 -

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10 (2) refund the TDD Notes, currently outstanding in the principal amount of $850,000, plus accrued interest thereon, (3) provide additional financing for the Redevelopment Project and the Transportation Project, (4) fund capitalized interest on the Bonds, (5) fund a Debt Service Reserve Fund for the Bonds, and (6) pay the costs of issuance of the Bonds. A description of the Bonds is contained in this Official Statement under the heading captioned THE BONDS. All references to the Bonds are qualified in their entirety to the definitive form thereof and the provisions with respect thereto included in the Indenture. The Bonds are subject to redemption prior to maturity as described herein. If revenues are received as projected, a substantial portion of the Bonds will be redeemed prior to their stated maturity. See the sections herein captioned THE BONDS- Redemption and PROJECTED NET PROCEEDS AND NET DEBT SERVICE. Security and Sources of Payment for the Bonds The Bonds and the interest thereon are special, limited obligations of the City, payable solely from Bond proceeds, Payments in Lieu of Taxes, TDD Revenues (subject to annual appropriation by the District), Economic Activity Tax Revenues (subject to appropriation by the City), and Municipal Revenues (subject to annual appropriation by the City) and certain moneys and securities held under the Indenture, including amounts in the Debt Service Reserve Fund. For definitions of the terms Payments in Lieu of Taxes or PILOTs, Economic Activity Tax Revenues or EATs, TDD Revenues and Municipal Revenues, see the section herein captioned SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Revenues. The application of Economic Activity Tax Revenues and Municipal Revenues to the payment of the Bonds is subject to annual appropriation by the City. The application of TDD Revenues to the payment of the Bonds is subject to annual appropriation by the District. Only Net Proceeds (as defined below under the heading captioned SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Revenues ) derived from Sub-Area 2A are available to pay debt service on the Bonds. The Bonds are also secured by a Debt Service Reserve Fund. The Debt Service Reserve Fund will be funded initially from proceeds of the Bonds in the amount of $2,010,000, which is equal to the Debt Service Reserve Requirement for the Bonds. Amounts in the Debt Service Reserve Fund will be available to pay principal of and interest on the Bonds, in the event that there are not sufficient moneys available for such purpose, and to make the final payment of principal of and interest on the Bonds. See the section herein captioned SECURITY AND SOURCES OF PAYMENT FOR THE BONDS. The Bonds are not secured by a mortgage on any property in the Redevelopment Area, including Sub-Area 2A. However, under the TIF Act, PILOTs that are due and owing constitute a lien against the real estate in Sub-Area 2A from which they are derived. Upon a default in the payment of any PILOTs on real property located in Sub-Area 2A, the lien for such unpaid PILOTs may be enforced by the City as provided in the TIF Act. THE BONDS DO NOT CONSTITUTE A GENERAL OBLIGATION OF THE CITY OR THE DISTRICT AND DO NOT CONSTITUTE AN INDEBTEDNESS OF THE CITY, THE DISTRICT OR THE STATE OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION OR LIMITATION. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE DISTRICT, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THE BONDS. THE ISSUANCE OF THE BONDS SHALL NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE THE CITY, THE DISTRICT, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF TO LEVY ANY FORM OF TAXATION THEREFOR OR TO MAKE ANY APPROPRIATION FOR THEIR PAYMENT

11 Because the TIF Act provides that 23 years is the maximum amount of time between the adoption of an ordinance approving a redevelopment project within a redevelopment area and the retirement of obligations incurred to finance such redevelopment project costs, the obligations of the City with respect to the Bonds terminate on October 10, 2022 whether or not the principal amount of the Bonds or the interest thereon has been paid in full. The Redevelopment Project The Redevelopment Project is located within Sub-Area 2A and consists of the development of a retail shopping center containing approximately 287,680 square feet of retail space, anchored by Lowe s, Stein Mart, Ultimate Electronics, HomeGoods and Marshall s. See the section herein captioned THE REDEVELOPMENT PROJECT. The map on the following page illustrates the Redevelopment Project. Bondowners Risks The Bonds involve a high degree of risk and are not a suitable investment for all persons. Prospective purchasers should carefully evaluate the risks and merits of an investment in the Bonds, confer with their own legal and financial advisors and be able to bear the risk of loss of their investment in the Bonds. See the section herein captioned BONDOWNERS RISKS. Continuing Disclosure The City will execute a Continuing Disclosure Agreement in accordance with Rule 15c2-12 of the Securities and Exchange Commission pursuant to which the City will agree to provide disclosure of certain financial and operating information on an on-going basis while the Bonds are outstanding and to provide notices of the occurrence of certain enumerated events, if deemed by the City to be material. See the section herein captioned CONTINUING DISCLOSURE and APPENDIX C hereto. Revenue Projections APPENDIX B contains a copy of an independent analysis of the revenue generation potential of Sub- Area 2A prepared by Development Strategies, Inc. ( DSI ) and entitled Revenue Projections for Tax Increment Financing Bonds Olde Towne Plaza, City of Ballwin, Missouri. See the section herein captioned PROJECTIONS. The purpose of the Projections is to estimate the potential revenues available from Sub- Area 2A to support the payment of debt service on the Bonds. The information in the Projections is based on various assumptions, estimates and opinions. The actual results will vary from the Projections and the variations may be material. There is no assurance that actual events will correspond with the Projections or the assumptions, estimates and opinions on which they are based. Definitions, Summaries of Documents and Additional Information APPENDIX A contains information regarding the City. APPENDIX B contains the Projections. Definitions of certain words and terms used in this Official Statement and summaries of the Indenture and the Continuing Disclosure Agreement are included in this Official Statement in APPENDIX C. Such definitions and summaries do not purport to be comprehensive or definitive. All references herein to such documents are qualified in their entirety by reference to the definitive forms of such documents, copies of which may be viewed at the offices of A.G. Edwards & Sons, Inc., One North Jefferson, St. Louis, Missouri 63103, telephone (314) , or at the office of the City Administrator, Manchester Road, Ballwin, Missouri 63011, telephone (636) , and will be provided to any prospective purchaser requesting the same upon payment of the cost of complying with such request

12 The Redevelopment Project - 6 -

13 THE BONDS The following is a summary of certain terms and provisions of the Bonds. Reference is hereby made to the Bonds and the provisions with respect to the Bonds in the Indenture for the detailed terms and provisions thereof. General The Bonds are being issued pursuant to and in full compliance with the Constitution and statutes of the State of Missouri, including particularly Section of the TIF Act. The Bonds will be issuable as fully registered bonds, without coupons, in denominations of $5,000 or any integral multiple thereof. The Bonds will be dated as of the date of initial issuance and delivery thereof. The Bonds shall become due in the amounts on the maturity dates, subject to redemption and payment prior to their stated maturity dates, and shall bear interest at the rates set forth on the inside cover of this Official Statement (computed on the basis of a 360-day year of twelve 30-day months) from the date thereof or from the most recent Interest Payment Date to which interest has been paid or duly provided for, payable semiannually on April 1 and October 1 in each year, beginning on October 1, The Bonds, when issued, will be registered in the name of Cede & Co., as nominee for DTC. Payment of the premium, if any, and interest on each Bond will be made, and notices and other communications to Bondholders will be given, directly to DTC or its nominee, Cede & Co., by the Trustee. In the event the Bonds are not in a book-entry-only system, payment of the principal of, premium, if any, and interest on the Bonds will be made and such notices and communications will be given as described in the Indenture. See the subsection below captioned Book-Entry-Only System. Registration, Transfer and Exchange Upon Discontinuance of Book-Entry System Any Bond may be transferred only upon the Register upon surrender thereof to the Trustee duly endorsed for transfer or accompanied by an assignment duly executed by the Owner or his attorney or legal representative in such form as shall be satisfactory to the Trustee. Upon any such transfer, the City shall execute and the Trustee shall authenticate and deliver in exchange for such Bond a new fully registered Bond or Bonds of the same series, registered in the name of the transferee, of any denomination or denominations authorized by the Indenture. Any Bond, upon surrender thereof at the principal corporate trust office of the Trustee, together with an assignment duly executed by the Owner or the Owner s attorney or legal representative in such form as shall be satisfactory to the Trustee, may, at the option of the Owner thereof, be exchanged for Bonds of the same maturity and series, of any denomination or denominations authorized by the Indenture, bearing interest at the same rate, and registered in the name of the Owner. The City or the Trustee may make a charge against each Owner requesting a transfer or exchange of Bonds for every such transfer or exchange of Bonds sufficient to reimburse it for any tax or other governmental charge required to be paid with respect to such transfer or exchange, the cost of printing, if any, each new Bond issued upon any transfer or exchange and the reasonable expenses of the City and the Trustee in connection therewith, and such charge shall be paid before any such new Bond shall be delivered. The City or the Trustee may levy a charge against an Owner sufficient to reimburse it for any governmental charge required to be paid in the event the Owner fails to provide a correct taxpayer identification number to the Trustee. Such charge may be deducted from amounts otherwise due to such Owner

14 Redemption Optional Redemption The Bonds. The Bonds maturing on and after October 1, 2011 are subject to optional redemption by the City on and after October 1, 2010 in whole at any time or in part on any Interest Payment Date in inverse order of maturity at a redemption price equal to 100% of the principal amount to be redeemed, together with interest accrued to the date fixed for redemption. See the section herein captioned SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Indenture Funds and Accounts for a discussion of the optional redemption of the Bonds with excess Net Proceeds to be deposited in the Redemption Account of the Debt Service Fund. Mandatory Sinking Fund Redemption Series 2002A Bonds. The Series 2002A Bonds maturing on October 1, 2015 (the 2015 Term Bonds ) shall be subject to mandatory redemption and payment prior to stated maturity pursuant to the mandatory redemption requirements of the Indenture at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the date fixed for redemption. The City shall redeem on October 1 in each year, the following principal amounts of such 2015 Term Bonds: *Final maturity Year Principal Amount 2014 $850, * 930,000 The Series 2002A Bonds maturing on October 1, 2017 (the 2017 Term Bonds ) shall be subject to mandatory redemption and payment prior to stated maturity pursuant to the mandatory redemption requirements of the Indenture at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the date fixed for redemption. The City shall redeem on October 1 in each year, the following principal amounts of such 2017 Term Bonds: *Final maturity Year Principal Amount 2016 $1,195, * 1,305,000 The Series 2002A Bonds maturing on October 1, 2022 (the 2022 Series 2002A Term Bonds ) shall be subject to mandatory redemption and payment prior to stated maturity pursuant to the mandatory redemption requirements of the Indenture at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the date fixed for redemption. The City shall redeem on October 1 in each year, the following principal amounts of such 2022 Series 2002A Term Bonds: *Final maturity Year Principal Amount 2018 $ 910, , ,095, ,190, * 1,940,000 Mandatory Sinking Fund Redemption Series 2002B Bonds. The Series 2002B Bonds maturing on October 1, 2022 (the 2022 Series 2002B Term Bonds and, collectively with the 2015 Term Bonds, the 2017 Term Bonds and the 2022 Series 2002A Terms Bonds, the Term Bonds ) shall be subject to mandatory - 8 -

15 redemption and payment prior to stated maturity pursuant to the mandatory redemption requirements of the Indenture at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the date fixed for redemption. The City shall redeem on October 1 in each year, the following principal amounts of such 2022 Series 2002B Term Bonds: *Final maturity Year Principal Amount 2018 $ 510, , , , * 1,090,000 Special Mandatory Redemption Series 2002B Bonds. The Series 2002B Bonds maturing on October 1, 2022 are subject to special mandatory redemption by the City on each October 1, commencing October 1, 2003, at the redemption price of 100% of the principal amount being redeemed, together with accrued interest thereon to the date fixed for redemption, in an amount equal to the amount which is on deposit in the Redemption Account of the Debt Service Fund 40 days prior to each October 1 (or if such date is not a Business Day, the immediately preceding Business Day). See the section herein captioned PROJECTED NET PROCEEDS AND NET DEBT SERVICE. Special Mandatory Redemption The Bonds. The Bonds are also subject to special mandatory redemption by the City, in whole but not in part, on any date in the event that moneys in the Debt Service Fund and the Debt Service Reserve Fund are sufficient to redeem all of the Bonds then Outstanding at a redemption price of 100% of the Bonds Outstanding, together with accrued interest thereon to the date fixed for redemption. See APPENDIX C DEFINITIONS AND SUMMARIES OF THE INDENTURE AND CONTINUING DISCLOSURE AGREEMENT Summary of the Indenture Revenue Fund. At its option, to be exercised on or before the 45 th day next preceding any mandatory sinking fund redemption date, the City may: (1) deliver to the Trustee for cancellation Term Bonds subject to mandatory sinking fund redemption on said mandatory sinking fund redemption date, in any aggregate principal amount desired; or (2) furnish the Trustee funds, together with appropriate instructions, for the purpose of purchasing any Term Bonds subject to mandatory sinking fund redemption on said mandatory sinking fund redemption date from any Owner thereof whereupon the Trustee shall expend such funds for such purpose to such extent as may be practical; or (3) receive a credit with respect to the mandatory sinking fund redemption obligation of the City under the Indenture for any Term Bonds subject to mandatory sinking fund redemption on said mandatory sinking fund redemption date which, prior to such date, have been redeemed (other than through the operation of the mandatory sinking fund redemption requirements of this provision) and cancelled by the Trustee and not theretofore applied as a credit against any redemption sinking fund obligation under this provision. Each Term Bond so delivered or previously purchased or redeemed shall be credited at 100% of the principal amount thereof on the obligation of the City to redeem Term Bonds on such mandatory sinking fund redemption date, and any excess of such amount shall be credited on future mandatory sinking fund redemption obligations for Term Bonds in chronological order, and the principal amount of Term Bonds to be redeemed by operation of the requirements of the Indenture shall be accordingly reduced. If the City intends to exercise any option granted by the provisions of (1), (2) or (3) above, the City will, on or before the 45 th day next preceding each mandatory sinking fund redemption date, furnish the Trustee a written certificate indicating to what extent the provisions of said clauses (1), (2) and (3) are to be complied with respect to such mandatory redemption payment. Selection of Bonds to be Redeemed. Bonds shall be redeemed only in Authorized Denominations. When less than all of the Outstanding Bonds are to be redeemed and paid prior to maturity, such Bonds or portions of Bonds to be redeemed shall be selected in Authorized Denominations by the Trustee in such equitable manner as it may determine

16 In the case of a partial redemption of Bonds when Bonds of denominations greater than the minimum Authorized Denomination are then Outstanding, then for all purposes in connection with such redemption each Authorized Denomination unit of face value shall be treated as though it is a separate Bond of the denomination of the minimum Authorized Denomination. If one or more, but not all, of the minimum Authorized Denomination units of principal amount represented by any Bond are selected for redemption, then upon notice of intention to redeem such minimum Authorized Denomination unit or units, the Owner of such Bond or the Owner s attorney or legal representative shall forthwith present and surrender such Bond to the Trustee (i) for payment of the redemption price (including the interest to the date fixed for redemption) of the minimum Authorized Denomination unit or units of principal amount called for redemption, and (ii) for exchange, without charge to the Owner thereof, for a new Bond or Bonds of the aggregate principal amount of the unredeemed portion of the principal amount of such Bond. If the Owner of any such Bond of a denomination greater than the minimum Authorized Denomination fails to present such Bond to the Trustee for payment and exchange as aforesaid, said Bond shall, nevertheless, become due and payable on the redemption date to the extent of the minimum Authorized Denomination unit or units of principal amount called for redemption (and to that extent only) and shall cease to accrue interest on the principal amount so called for redemption. Notice and Effect of Call for Redemption. Unless waived by any Owner of Bonds to be redeemed, official notice of any redemption of any Bond shall be given by the Trustee on behalf of the City by mailing a copy of an official redemption notice by first class mail, postage prepaid, at least 30 days and not more than 60 days prior to the date fixed for redemption to the Owner of the Bond or Bonds to be redeemed at the address shown on the Register. On or prior to the date fixed for redemption, the City shall deposit moneys or Government Securities (as defined in the Indenture) with the Trustee as provided in the Indenture to pay the Bonds called for redemption and accrued interest thereon to the redemption date. Upon the happening of the above conditions, and notice having been given as provided in the Indenture, the Bonds or the portions of the principal amount of Bonds thus called for redemption shall cease to bear interest on the specified redemption date, provided moneys sufficient for the payment of the redemption price are on deposit at the place of payment at the time, and shall no longer be entitled to the protection, benefit or security of the Indenture and shall not be deemed to be Outstanding under the provisions of the Indenture. Payment and Discharge When the principal of and interest on all the Bonds have been paid in accordance with their terms or provision has been made for such payment, as provided in the Indenture, and provision also is made for paying all other sums payable under the Indenture, including the fees and expenses of the Trustee and any Paying Agents to the date of payment of the Bonds, then the right, title and interest of the Trustee under the Indenture shall thereupon cease, determine and be void. Thereupon the Trustee shall cancel, discharge and release the Indenture and shall upon receipt of a written request therefor and an opinion of counsel to the effect that all conditions precedent to the satisfaction and discharge of the Indenture have been met, execute, acknowledge and deliver to the City such instruments of satisfaction and discharge or release as shall be required to evidence such release and the satisfaction and discharge of the Indenture, and shall assign and deliver to the City any property at the time subject to the Indenture which may then be in the Trustee s possession, except amounts in the Debt Service Fund required to be paid to the City under the Indenture and except funds (or securities in which such funds are invested) held by the Trustee for the payment of the principal of and interest on the Bonds. Bonds shall be deemed to be paid within the meaning of the Indenture when payment of the principal on such Bonds, plus premium, if any, plus interest thereon to the due date thereof (whether such due date is by reason of maturity or upon redemption as provided in the Indenture or otherwise), either (1) has been made or caused to be made in accordance with the terms of the Indenture, or (2) provision therefor has been made by depositing with the Trustee, in trust and irrevocably setting aside exclusively for such payment, (i) moneys

17 sufficient to make such payment or (ii) non-callable Government Securities maturing as to principal and interest in such amount and at such times as will ensure the availability of sufficient moneys to make such payment and the Trustee shall have received an Opinion of Bond Counsel (which opinion may be based upon a ruling or rulings of the Internal Revenue Service) to the effect that such deposit will not cause the interest on such Bonds to be included in gross income for purposes of federal income taxation and that all conditions precedent to the satisfaction of the Indenture have been met. If the interest earnings on the moneys or Government Securities are necessary to provide for payment of the Bonds, the Trustee shall receive a verification report of a firm of independent certified public accountants that the moneys and Government Securities deposited with the Trustee are sufficient to pay when due the principal or redemption price, if any, and interest on the Bonds on or prior to the applicable redemption or maturity date. At such time as a Bond is deemed to be paid under the Indenture, such Bond shall no longer be secured by or be entitled to the benefits of the Indenture, except for the purposes of any such payment from such moneys or Government Securities. Book-Entry-Only System General. Ownership interests in the Bonds will be available to purchasers only through a book-entryonly system (the Book-Entry-Only System ) maintained by The Depository Trust Company ( DTC ), New York, New York, which will act as securities depository for the Bonds. Initially, the Bonds will be issued as one fully-registered Bond for each maturity specified on the inside cover hereof, registered in the Bond Register of the City kept by the Trustee in the name of Cede & Co. (DTC s partnership nominee). The following discussion will not apply to any Bonds issued in certificate form due to the discontinuance of the DTC Book-Entry-Only System, as described below. DTC and its Participants. DTC, the world s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Bank Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. DTC holds and provides asset servicing for over 2 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments from over 85 countries that its participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC, in turn is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, GSCC, MSBCC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants ). DTC has Standard & Poor s highest rating: AAA. The DTC Rules applicable to its Direct Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at Purchase of Ownership Interests. Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC s records. The ownership interest of each actual purchaser of each Bond (the Beneficial Owner ) is in turn to be recorded on the Direct Participants and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests

18 in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interest in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. Transfers. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Notices. Conveyance of notices and other communication by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to DTC. If less than all of the Bonds are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Voting. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Payments of Principal and Interest. Principal and interest payments on the Bonds and redemption proceeds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts upon DTC s receipt of funds and corresponding detail information from the Trustee on payable date in accordance with their respective holdings shown on DTC s records. Payments by Direct Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Direct Participant and not of DTC, the Trustee or the City, subject to any statutory and regulatory requirements as may be in effect from time to time. Payment of principal and interest and redemption proceeds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct Participants and Indirect Participants. Discontinuation of Book Entry System. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the City or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, Bonds are required to be printed and delivered. The City may determine to discontinue the system of book-entry transfers through DTC (or a successor securities depository). In such event, the Bonds are to be printed and delivered. The information in this section concerning DTC and DTC s book-entry system has been obtained from sources that the City and the Underwriter believe to be reliable, but the City and the Underwriter take no responsibility for the accuracy thereof, and neither the DTC Direct Participants, the Indirect Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters but should instead confirm the same with Direct Participants or Indirect Participants, as the case may be

19 None of the City, the Underwriter or the Trustee will have any responsibility or obligations to any Direct Participants or Indirect Participants or the persons for whom they act with respect to (i) the accuracy of any records maintained by DTC or any such Direct Participant or Indirect Participant; (ii) the payment by any Direct Participant or Indirect Participant of any amount due to any Beneficial Owner in respect of the principal of, premium, if any, or interest on the Bonds; (iii) the delivery by any such Direct Participant or Indirect Participant of any notice to any Beneficial Owner that is required or permitted under the terms of the Indenture to be given to Bondholders; (iv) the selection of the Beneficial Owners to receive payment in the event of any partial redemption of the Bonds; or (v) any consent given or other action taken by DTC as Bondholder. SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Limited Obligations; Sources of Payment The Bonds and the interest thereon are special, limited obligations of the City, payable solely from Bond proceeds, PILOTs, TDD Revenues (subject to annual appropriation by the District), EATs (subject to annual appropriation by the City), Municipal Revenues (subject to annual appropriation by the City) and certain moneys and securities held under the Indenture, including amounts in the Debt Service Reserve Fund, the Revenue Fund and the Debt Service Fund. The application of EATs and Municipal Revenues to the payment of the Bonds is subject to annual appropriation by the City. The application of TDD Revenues to the payment of the Bonds is subject to annual appropriation by the District. Only Net Proceeds (as defined below under the heading captioned SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Revenues ) derived from Sub-Area 2A are available to pay debt service on the Bonds. The Bonds are not secured by a mortgage on any property in the Redevelopment Area, including Sub-Area 2A. However, under the TIF Act, the PILOTs that are due and owing constitute a lien against the real estate in Sub-Area 2A from which they are derived. Upon a default in the payment of any PILOTs on real property located in Sub-Area 2A, the lien for such unpaid PILOTs may be enforced by the City as provided in the TIF Act. See the section herein captioned TAX INCREMENT FINANCING IN MISSOURI Assessments and Collections of Ad Valorem Taxes. THE BONDS DO NOT CONSTITUTE A GENERAL OBLIGATION OF THE CITY OR THE DISTRICT AND DO NOT CONSTITUTE AN INDEBTEDNESS OF THE CITY, THE DISTRICT OR THE STATE OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION OR LIMITATION. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE DISTRICT, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THE BONDS. THE ISSUANCE OF THE BONDS SHALL NOT, DIRECTLY, INDIRECTLY OR CONTINGENTLY, OBLIGATE THE CITY, THE DISTRICT, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF TO LEVY ANY FORM OF TAXATION THEREFOR OR TO MAKE ANY APPROPRIATION FOR THEIR PAYMENT. Because the TIF Act provides that 23 years is the maximum amount of time between the adoption of an ordinance approving a redevelopment project within a redevelopment area and the retirement of obligations incurred to finance such redevelopment project costs, the obligations of the City with respect to the Bonds terminate on October 10, 2022 whether or not the principal amount of the Bonds or the interest thereon has been paid in full

20 Revenues Pursuant to the TIF Act, the Indenture and an ordinance of the City authorizing the issuance of the Bonds, the City has undertaken to establish and maintain a Special Allocation Fund with respect to the Bonds and to deposit (a) in the Sub-Area 2A PILOTs Subaccount of the Redevelopment Project Sub-Area 2A Account of the Special Allocation Fund, all PILOTs (which, as defined in the Indenture, are only the PILOTs derived from Sub-Area 2A) received by the City, (b) subject to annual appropriation, in the Sub-Area 2A EATs Subaccount of the Redevelopment Project Sub-Area 2A Account of the Special Allocation Fund, all EATs (which, as defined in the Indenture, are only the EATs derived from Sub-Area 2A) received by the City, (c) subject to annual appropriation by the District, in the Ballwin Town Center TDD Fund created in the Cooperation Agreement, as defined herein, and held by the City, all TDD Revenues received by the City, and (d) subject to annual appropriation by the City, into the Municipal Revenues Account of the Special Allocation Fund, the Municipal Revenues. Pursuant to the Indenture, the City pledges and assigns to the Trustee, as security for the payment of the Bonds and the interest thereon, the Pledged Revenues. Pledged Revenues are all Net Proceeds and all moneys held under the Indenture in the Revenue Fund, the Debt Service Fund and the Debt Service Reserve Fund, together with investment earnings thereon. Net Proceeds are all moneys on deposit (including investment earnings thereon) in the (1) Sub- Area 2A PILOTs Subaccount of the Sub-Area 2A Redevelopment Project Account of the Special Allocation Fund, (2) subject to annual appropriation by the City, the Sub-Area 2A EATs Subaccount of the Sub-Area 2A Redevelopment Project Account of the Special Allocation Fund, (3) subject to annual appropriation by the District, the TDD Revenues, and (4) all Municipal Revenues that have been appropriated by the City to the repayment of the Bonds. Net Proceeds do not include (1) any amount paid under protest until the protest is withdrawn or resolved against the taxpayer, and (2) any sum received by the City which is the subject of a suit or other claim communicated to the City which suit or claim challenges the collection of such sum. The EATs and the Municipal Revenues are subject to appropriation by the City each fiscal year. There can be no assurance that the City will appropriate the EATs or the Municipal Revenues in any fiscal year and the Indenture does not obligate the City to do so. The TDD Revenues are subject to appropriation by the District each fiscal year. There can be no assurance that the District will appropriate TDD Revenues in any fiscal year and the Cooperation Agreement, as defined herein, does not obligate the District to do so. Payments in Lieu of Taxes or PILOTs are those revenues, if any, attributable to the increase in the current equalized assessed valuation of the real property within Sub-Area 2A over and above the certified total initial assessed valuation of all taxable lots, blocks, parcels, tracts and real property in Sub-Area 2A for 1999 (the year in which tax increment financing for Sub-Area 2A was first adopted). Such increase is multiplied by the then current aggregate tax rate applicable to such property to determine the Payments in Lieu of Taxes. The Payments in Lieu of Taxes generated within Sub-Area 2A have been irrevocably pledged by the City to the payment of the Bonds. See APPENDIX B TAX INCREMENT FINANCING REVENUE PROJECTIONS. Economic Activity Tax Revenues or EATs are, subject to annual appropriation by the City as provided in the TIF Act, 50% of the total additional revenues from taxes imposed by the City or other taxing districts (including the District) which are generated by economic activities within Sub-Area 2A over the amount of such tax revenues generated by economic activities within Sub-Area 2A in the calendar year ending December 31, 1998, but excluding any taxes imposed on sales or charges for sleeping rooms paid by transient guests of hotels and motels, licenses, fees or special assessments, other than payments in lieu of taxes, and personal property taxes and certain taxes levied by St. Louis County for the purpose of public transportation. Notwithstanding the foregoing, if a retail establishment relocates to within Sub-Area 2A from another location in St. Louis County and benefits from tax increment financing, then the increase in EATs for that retail establishment is measured against the amount of such sales taxes generated by such establishment in the year

21 prior to its relocation. There are no such retail establishments in Sub-Area 2A that will be subject to this exception at this time. See the section herein captioned THE REDEVELOPMENT PROJECT and APPENDIX B TAX INCREMENT FINANCING REVENUE PROJECTIONS. Municipal Revenues are, during any calendar year while tax increment financing is in effect, the lesser of (1) 35% of the revenues other than the EATs which have been appropriated by the City to the payment of Bonds and PILOTs (except any amounts paid under protest or amounts subject to suit) received by the City which are generated within Sub-Area 2A from such local sales taxes as may be imposed by the City (or imposed by the County and distributed to the City) from time to time, less the amount of such revenues generated within Sub-Area 2A in the calendar year ending December 31, 1998, or (2) $250,000. TDD Revenues are all revenues of the TDD Sales Tax (less the District s reasonable operating costs, not to exceed $20,000 per year and the City s 1% collection fee) that are appropriated by the District to the payment of the Bonds, less that portion of such revenues that constitute EATs, but not including (1) any amount paid under protest until the protest is withdrawn or resolved against the taxpayer and (2) any sum received by the District which is the subject of a suit or other claim communicated to the District, which suit or claim challenges the collection of such claim. See APPENDIX B TAX INCREMENT FINANCING REVENUE PROJECTIONS. Pursuant to a Cooperation Agreement dated as of May 1, 2002 (the Cooperation Agreement ) between the City and the District, the City will collect and administer the TDD Sales Tax. Pursuant to the Cooperation Agreement, the District has covenanted to budget and request an appropriation of TDD Revenues each fiscal year. There can be no assurance that the District will appropriate the TDD Revenues in any fiscal year and the Cooperation Agreement does not obligate the District to do so. Pursuant to the Cooperation Agreement, the City will deposit the TDD Sales Tax revenues that are EATs into the Sub-Area 2A EATs Subaccount of the Redevelopment Project Sub-Area 2A Account of the Special Allocation Fund on a monthly basis and will deposit the TDD Revenues, along with the TDD Sales Tax revenues constituting EATs, with the Trustee to be applied in accordance with the Indenture. Indenture Funds and Accounts Revenue Fund. Under the Indenture, the City has agreed to transfer on the 15 th calendar day of each month (or the next Business Day thereafter if the 15 th is not a Business Day) while the Bonds are Outstanding (1) all Net Proceeds as of the last day of the preceding month consisting of Payments in Lieu of Taxes and shall direct the Trustee in writing to deposit such sum into the PILOTS Account of the Revenue Fund, (2) all Net Proceeds as of the last day of the preceding month consisting of Economic Activity Tax Revenues and shall direct the Trustee in writing to deposit such sum into the EATS Account of the Revenue Fund, and (3) all Net Proceeds, as of the last day of the preceding month consisting of all TDD Revenues and shall direct the Trustee in writing to deposit such sums into the TDD Account of the Revenue Fund. If the Trustee has not received such Net Proceeds on or before the 20 th calendar day (or if such day is not a business day, the immediately preceding Business day) of each month, the Trustee shall notify the City and A.G. Edwards & Sons, Inc., as the original purchaser of the Bonds, of such non-receipt. On the 15th day of each March (or the next Business Day thereafter if the 15th is not a Business Day) while the Bonds are outstanding, the City shall transfer such amount of Municipal Revenues to the Trustee as shall be sufficient to cause the balance of the Municipal Revenues Account as of the immediately preceding January 1 to equal the lesser of (i) 35% of the revenues other than the EATs which have been appropriated by the City to the payment of Bonds and PILOTs (except any amounts paid under protest or amounts subject to suit) received by the City during the immediately preceding calendar year which are generated within Sub-Area 2A from such local sales taxes as may be imposed by the City (or imposed by St. Louis County and distributed to the City) from time to time, less the amount of such revenues generated within Sub-Area 2A in the calendar year ending December 31, 1998, or (ii) Two

22 Hundred Fifty Thousand Dollars ($250,000), and the City shall direct the Trustee in writing to deposit such amount into the Municipal Revenues Account of the Revenue Fund. See APPENDIX C DEFINITIONS AND SUMMARIES OF THE INDENTURE AND THE CONTINUING DISCLOSURE AGREEMENT Summary of the Indenture Revenue Fund. Pursuant to the Indenture, moneys in the Revenue Fund (first from the EATS Account of the Revenue Fund, second from the PILOTS Account of the Revenue Fund, third from the TDD Account of the Revenue Fund and fourth from the Municipal Revenues Account of the Revenue Fund) on the 40 th day prior to each Interest Payment Date (or if such day is not a Business Day, the immediately preceding Business Day) shall be applied by the Trustee to the extent necessary for the purposes and in the amounts as follows: First, transfer to the Rebate Fund an amount sufficient to pay rebate, if any, owed to the United States of America, pursuant to Section 148 of the Code as directed in writing by the City in accordance with the Tax Compliance Agreement; Second, transfer to the Debt Service Account of the Debt Service Fund an amount sufficient to pay the interest on the Bonds on the next succeeding Interest Payment Date, except if the next succeeding Interest Payment Date is October 1, 2002, in which event transfer such amount to the Debt Service Account from the Capitalized Interest Account of the Debt Service Fund as provided in the Indenture; Third, transfer to the Debt Service Account of the Debt Service Fund an amount sufficient to pay the interest on Bonds on the second succeeding Interest Payment Date; Fourth, transfer to the Debt Service Fund an amount sufficient to pay the principal due on the Bonds by their terms on the next succeeding Interest Payment Date (whether such principal is due by reason of stated maturity or mandatory sinking fund redemption) and, if the second succeeding Interest Payment Date is October 1, an amount sufficient to pay the principal due on the Bonds by their terms on the second succeeding Interest Payment Date (whether such principal is due by reason of stated maturity or mandatory sinking fund redemption); Fifth, transfer to the Debt Service Reserve Fund such amount as may be required to restore any deficiency in the Debt Service Reserve Fund if the amount on deposit in the Debt Service Reserve Fund is less than the Debt Service Reserve Requirement; provided, however, that any moneys from the TDD Account of the Revenue Fund shall be deposited in the TDD Debt Service Reserve Account; Sixth, pay to the Trustee or any Paying Agent, an amount sufficient for payment of any fees and expenses which are due and owing to the Trustee or any Paying Agent, upon delivery to the City of an invoice for such amounts, and pay to the City an amount sufficient for payment of any fees and expenses which are due and owing to the City pursuant to the Indenture, upon delivery to the Trustee of an invoice for such amounts; Seventh, transfer to the Pass-Through Fund, but only from moneys in the PILOTs Account, an amount which, when added to moneys previously deposited in the Pass-Through Fund during such calendar year, does not exceed the Pass-Through Amount for such calendar year; and Eighth, transfer to the Redemption Account of the Debt Service Fund all remaining Net Proceeds, which amount shall be applied first to the payment of the principal of and accrued interest on all Series 2002B Bonds which are subject to special mandatory redemption on the next succeeding October 1 in accordance with the provisions of the Indenture and second to the payment of the principal of and accrued interest on all Bonds which are subject to optional redemption on any succeeding Interest Payment Date in accordance with the provisions of the Indenture

23 Upon payment in full of the principal of and interest on the Bonds (or provision has been made for the payment thereof as specified in the Indenture) and the fees, charges and expenses of the Trustee and any Paying Agents, and any other amounts required to be paid under the Indenture, all amounts remaining on deposit (1) in the PILOTs Account of the Revenue Fund and the EATs Account of the Revenue Fund shall be paid to the City for deposit into the Special Allocation Fund, (2) the TDD Account of the Revenue Fund shall be paid to the City for application in accordance with the Cooperation Agreement, and (3) the Municipal Revenues Account of the Revenue Fund shall be paid to the City for use by the City for any proper governmental purpose. If tax revenues are received as projected, a certain portion of the Bonds will be redeemed prior to their stated maturity. See the sections herein captioned PLAN OF FINANCE and PROJECTED NET PROCEEDS AND NET DEBT SERVICE for a discussion of the anticipated redemption of a portion of the Bonds prior to maturity from amounts anticipated to be deposited into the Redemption Account of the Debt Service Fund. The amount of revenues may be greater or smaller than projected, which will effect the rate of payment and redemption of the Bonds. Debt Service Fund Except as otherwise provided in the Indenture, all amounts paid and credited to the Debt Service Fund shall be expended solely for the payment of the principal of, redemption premium, if any, and interest on the Bonds as the same mature and come due or upon the redemption thereof. Debt Service Reserve Fund Amounts in the Debt Service Reserve Fund shall be used by the Trustee solely for the payment of the principal of and interest on the Bonds if moneys otherwise available for such purpose are insufficient to pay the same as they become due and payable, and to make the final payment on the Bonds. The Debt Service Reserve Fund will initially be funded from proceeds of the Bonds in the amount of $2,010,000, which is equal to the Debt Service Reserve Requirement. Any moneys provided by the City to meet the Debt Service Reserve Requirement that are TDD Revenues shall be deposited in the TDD Debt Service Reserve Account. See APPENDIX C DEFINITIONS AND SUMMARIES OF THE INDENTURE AND THE CONTINUING DISCLOSURE AGREEMENT Summary of the Indenture Debt Service Reserve Fund. Project Fund On the date of issuance of the Bonds, the Trustee will forward from the Refunding Account of the Project Fund (1) to the holder of the TIF Notes upon presentation of the TIF Notes moneys sufficient to pay the principal of and interest on the TIF Notes on the date of issuance of the Bonds and (2) to the holder of the TDD Notes upon presentation of the TDD Notes moneys sufficient to pay the principal of and interest on the TDD Notes on the date of issuance of the Bonds. Moneys in the Costs of Issuance Account of the Project Fund will be disbursed, from time to time by the Trustee, upon receipt of a written request by the City as required by the Indenture, for the sole purpose of paying the costs of issuance of the Bonds. Any moneys remaining in the Costs of Issuance Account of the Project Fund on November 1, 2002 shall be deposited, without further authorization, into the Redemption Account of the Debt Service Fund. Pass-Through Fund The TIF Act permits TIF revenues to be passed through to the taxing jurisdictions that would have received the TIF revenues in the absence of TIF. Upon written direction of the City, as described in the Indenture, moneys in the Pass-Through Fund will be disbursed by the Trustee on March 1 (or if such date is not a Business Day, on the next succeeding Business Day) of each year, commencing March 1, Any

24 moneys remaining on deposit in the Pass-Through Fund when the Bonds are paid in full shall immediately be transferred by the Trustee to the City for deposit into the Special Allocation Fund. See APPENDIX B TAX INCREMENT FINANCING REVENUE PROJECTIONS for an explanation of how pass-through amounts are calculated. Purpose of the Bonds PLAN OF FINANCE The City issued the TIF Notes to the Developer to provide funds to finance public improvements in connection with the Redevelopment Project. The District issued the TDD Notes to the Developer to evidence the District s obligation to reimburse the Developer for a portion of the costs of the Connector Road. The City will issue the Bonds pursuant to the TIF Act and the Indenture for the purpose of providing funds to (1) refund the TIF Notes, which are currently outstanding in the principal amount of $13,665,000, plus accrued interest thereon, (2) refund the TDD Notes, which are currently outstanding in the principal amount of $850,000, plus accrued interest thereon, (3) provide additional financing for the Transportation Project and the Redevelopment Project, (4) fund capitalized interest on the Bonds, (5) fund a Debt Service Reserve Fund for the Bonds and (6) pay the costs of issuance of the Bonds. Sources and Uses of Funds Following is a summary of the anticipated sources and uses of funds in connection with the issuance of the Bonds: Sources of Funds: Principal Amount of the Bonds... $ 20,100, Less Original Issue Discount... (226,836.95) Total sources of funds... $ 19,873, Uses of Funds: Deposit to the Refunding Account of the Project Fund... $ 16,247, Deposit to the Project Account of the Project Fund , Deposit to the Capitalized Interest Account of the Debt Service Fund , Deposit to the Debt Service Reserve Fund... 2,010, Underwriter s Discount , Other Costs of Issuance , Total uses of funds... $ 19,873, Special Mandatory Redemption of the Series 2002B Bonds The Indenture provides that any moneys remaining after the transfer by the City of Net Proceeds to the Revenue Fund and deposit of such moneys to all funds and accounts as required in the Indenture, including restoring deficiencies, if any, in the Debt Service Reserve Fund, will be deposited into the Redemption Account of the Debt Service Fund. The Indenture further requires that moneys deposited in the Redemption Account of the Debt Service Fund be applied to the payment of the principal of and accrued interest on all Series 2002B Bonds which are subject to special mandatory redemption. See the sections herein captioned THE BONDS Redemption and SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Indenture Funds and Accounts

25 It is anticipated that Net Proceeds deposited into the Redemption Account of the Debt Service Fund will be sufficient to redeem the Series 2002B Bonds on or before October 1, However, the redemption of the Series 2002B Bonds prior to maturity from such moneys is based on the amount of PILOTs, EATs, TDD Revenues and Municipal Revenues generated in Sub-Area 2A. It is not possible to determine the amount of such revenues that will be generated in Sub-Area 2A and the assumptions regarding the amount of such revenues available to redeem the Series 2002B Bonds prior to maturity is based on the Projections. See the section herein captioned PROJECTED NET PROCEEDS AND NET DEBT SERVICE and APPENDIX B TAX INCREMENT FINANCING REVENUE PROJECTIONS. [Remainder of page intentionally left blank]

26 PROJECTED NET PROCEEDS AND NET DEBT SERVICE Based on (a) the Projections prepared by DSI and attached hereto as APPENDIX B, (b) an average coupon of 5.946% on the Bonds, (c) an assumed investment yield of 4.4% on amounts in the Debt Service Reserve Fund and (d) projected special mandatory redemptions of the Series 2002B Bonds with available Net Proceeds as provided in the Indenture: (1) all of the Bonds will be paid or redeemed by October 1, 2015, (2) the average life of the Bonds is years (3.032 years for the Series 2002B Bonds maturing October 1, 2022) and (3) debt service (including projected special mandatory redemption of the Series 2002B Bonds) expected to be paid on the Bonds is as follows: Total Projected Net Proceeds Actual Amount Available Calendar Available for Debt Service on Pass-Through for Year for Debt Service 1 the Bonds 2 Payments Redemption 2002 $ 810,400 $ $ $ 810, ,754,600 1,260, , ,064,000 1,480,508 70, , ,121,600 1,518, , , ,202,200 1,578, , , ,244,100 1,608, , , ,323,900 1,668, , , ,368,200 1,697, , , ,454,400 1,431, , , ,501,100 1,462, , , ,592,300 1,513, , , ,641,600 1,544, , , ,737,900 1,599, , , ,789,800 1,628, , , ,891,700 1,837, , , ,946,500 1,873, , , ,028,300 1,906, , , ,086,200 1,951, , , ,198,600 2,023, , , ,259,600 2,065, ,275 1,000, ,931, ,113, ,275 1,623,202 1 Assumes annual appropriation by the City of EATs and Municipal Revenues and annual appropriation by the District of TDD Revenues Net of expected earnings on the Debt Service Reserve Fund and net of amounts from the Capitalized Interest Account of the Debt Service Fund used to pay the October 1, 2002 interest payment. Projected Net Proceeds through October 11. Net of Debt Service Reserve Fund amount that may be used to pay the final debt service payment on the Bonds. The Projections analyze the revenue generation potential of Sub-Area 2A for the purpose of projecting the potential revenues available pursuant to the TIF Act and the TDD Act to support the payment of debt service on the Bonds. Certain financial and statistical data included in this Official Statement have been excerpted from the Projections. The City and the Underwriter make no representation or warranty, express or implied, as to the accuracy or completeness of the information in the Projections, and there is no obligation to update such information after the delivery of the Bonds. DSI has consented to the inclusion of the Projections in this Official Statement

27 The Projections are forward-looking and involve certain assumptions and judgments regarding future events. Although the Projections are based on currently available information, they are also based on assumptions about the future state of the national and regional economy and the local real estate markets as well as assumptions about future actions by various parties, which cannot be assured or guaranteed. The Projections are not predictions or assurances that a certain level of performance will be achieved or that certain events will occur. The actual results will vary from the Projections, and the variations may be material. Prospective purchasers of the Bonds should review Appendix B carefully. Overview TAX INCREMENT FINANCING IN MISSOURI Tax increment financing is a procedure whereby cities and counties encourage the redevelopment of designated areas. The theory of tax increment financing is that, by encouraging redevelopment projects, the value of real property in a redevelopment area should increase and, if the redevelopment project includes establishments that pay sales and other economic activity taxes, the amounts of economic activity taxes generated by the redevelopment area should also increase. When tax increment financing is adopted for a redevelopment area, the assessed value of real property in the redevelopment area is frozen for tax purposes at the current base level prior to the construction of improvements. The owners of the property continue to pay property taxes at the base level. As the property is improved, the assessed value of real property in the redevelopment area should increase above the base level. By applying the tax rate of all taxing districts having taxing power within the redevelopment area to the increase in assessed valuation of the improved property over the base level, a tax increment is produced. The annual tax increments (referred to as payments in lieu of taxes or PILOTS and more fully defined herein under the section captioned SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Revenues ) are paid by the owners of property in the same manner as regular property taxes. The payments in lieu of taxes are transferred by the collecting agency to the treasurer of the city or county and deposited in the PILOTS account of a special allocation fund. Similarly, an amount (referred to as Economic Activity Tax Revenues and more fully defined herein under the section captioned SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Certain Definitions ) attributable to 50% of the increase in tax revenues generated by economic activities within the redevelopment area (including sales and utilities taxes, but excluding personal property taxes, taxes imposed on sales or charges for sleeping rooms paid by transient guests of hotels and motels, licenses, fees or special assessments other than payments in lieu of taxes, and certain taxes imposed by St. Louis County for the purpose of public transportation) are transferred by the collecting agency to the treasurer of the city or county and deposited in an economic activity tax account of such special allocation fund. All or a portion of the moneys in the special allocation fund are used to pay redevelopment project costs or to retire bonds or other obligations issued to pay such costs. The TIF Act The TIF Act was enacted in 1982 and was amended in 1990, 1991, 1997 and The constitutional validity of the TIF Act (prior to the amendments) was upheld by the Missouri Supreme Court in Tax Increment Financing Commission of Kansas City, Missouri v. J.E. Dunn Construction Co., Inc., 781 S.W.2d 70 (Mo. 1989). The TIF Act authorizes cities and counties to provide long-term financing for redevelopment projects in blighted, conservation and economic development areas (as defined in the TIF Act) through the issuance of bonds and other obligations. Prior to the amendments to the TIF Act, such obligations were payable solely from PILOTS derived from the redevelopment area. Under the 1990, 1991 and 1997 amendments to the TIF Act, such obligations are also payable from economic activity tax revenues derived from the redevelopment area. The validity of certain portions of the 1990 and 1991 amendments relating to the capture of economic activity tax revenues was upheld by the Missouri Supreme Court in County of Jefferson v

28 QuikTrip Corporation, 912 S.W.2d 487 (Mo. 1995). In 1997, the TIF Act was further amended by inclusion of a provision which, beginning January 1, 1998, excluded from the available economic activity tax revenues certain commercial surcharges and other taxes imposed by St. Louis County for the purpose of public transportation. Amendments to the TIF Act have been proposed in each legislative session during recent years. Proposed amendments to the TIF Act have been introduced in the current session of the Missouri General Assembly. In order to become part of the TIF Act, such proposed amendments to the TIF Act must pass review by certain committees of the General Assembly, be voted on by the entire General Assembly and signed into law by the governor of the State. It is not possible to predict whether such proposed amendments to the TIF Act (or any other proposed amendments to the TIF Act) will become law during this session of the General Assembly. A case is currently pending in a Missouri trial court challenging the constitutionality of certain provisions of the TIF Act. For a discussion of the litigation, see the sections herein captioned BONDOWNERS RISKS Pending TIF Litigation and LITIGATION. Although Payments in Lieu of Taxes may be irrevocably pledged to the repayment of bonds, economic activity tax revenues are subject to annual appropriation by the governing body of the city or county, and there is no obligation on the part of the governing body to appropriate economic activity tax revenues in any year. See the sections herein captioned BONDOWNERS RISKS Non-Appropriation and Factors Affecting Economic Activity Tax Revenues and TDD Revenues. Assessment and Collection of Ad Valorem Taxes General. The City and the Redevelopment Area, including Sub-Area 2A, are located within St. Louis County, Missouri (the County ). On or before September 1 in each year, each political subdivision located within the County which imposes ad valorem taxes (the Taxing Districts ) estimates the amount of taxes that will be required during the next succeeding fiscal year to pay interest falling due on general obligation bonds issued and the principal of bonds maturing in such year and the costs of operation and maintenance plus such amounts as shall be required to cover emergencies and anticipated tax delinquencies. The Taxing Districts certify the amount of such taxes which shall be levied, assessed and collected on all taxable tangible property in the County to the County Assessor by September 1. All taxes levied must be based upon the assessed valuation of land and other taxable tangible property in the County as shall be determined by the records of the County Assessor and must be collected and remitted to the Taxing Districts. All the laws, rights and remedies provided by the laws of the State for the collection of State, county, city, school and other ad valorem taxes are applicable to the collection of taxes authorized to be collected in Sub-Area 2A. The Missouri Constitution requires uniformity in taxation of real property by directing such property to be subclassed as agricultural, residential or commercial and permitting different assessment ratios for each subclass. Residential property is currently assessed at 19% of true value in money and commercial, industrial and all other real property is assessed at 32% of true value in money. The phrase true value in money has been held to mean fair market value except with respect to agricultural property. Real property within the County is assessed by the County Assessor. The County Assessor is responsible for preparing the tax roll each year and for submitting the tax roll to the Board of Equalization. The Board of Equalization has the authority to question and determine the proper values of real property and then adjust and equalize individual properties appearing on the tax rolls. The County Collector collects taxes for all Taxing Districts within the County limits. The County Collector deducts a commission for his services. After such collections and deductions of commission, taxes are distributed according to the Taxing District s pro rata share

29 Taxes are levied on all taxable property based on the equalized assessed value thereof determined as of January 1 in each year. Under Missouri law, each property must be reassessed every two years (in oddnumbered years). The County Collector prepares the tax bills and mails them to each taxpayer in September. Payment is due by December 31, after which they become delinquent and accrue a penalty of one percent per month. In the event of an increase in the assessed value of a property, notice of such increase must be given to the owner of the affected property, which notice is generally given in March. Valuation of Real Property. The County Assessor must determine the assessed value of a property based upon the State law requirement that property be valued at its true value in money. For agricultural land, true value is based on its productive capability. As to residential and commercial property, true value in money is the fair market value of the property on the valuation date. The fair market value is arrived at by using the three universally recognized approaches to value: cost approach, the sales comparison approach and the income approach. The cost approach is typically applied when a property is newly constructed and is based on the principle of substitution. This principle states that no informed buyer will pay more for a property than the cost to reproduce or replace the property. Value is determined under the cost approach by adding the estimated land value to the replacement or reproduction cost reduced by estimated depreciation. Courts have held, however, that construction cost alone is not a proper basis for determining true value in money and that all factors which affect the use and utility of the property must be considered. The sales comparison approach determines value based upon recent sales prices of comparable properties. Comparable sales are adjusted for differences in properties by comparing such items as sales price per square foot and net operating income capitalization rates. The income approach estimates market value by discounting to present value a stream of estimated net operating income. First, the property s gross potential income is estimated based on gross rents being generated at the property. A vacancy allowance is then deducted to arrive at effective gross income. Next, allowable operating expenses are deducted to arrive at an estimate of the property s net operating income. Finally, the net operating income is divided by an appropriate capitalization rate to arrive at the estimated present value of the income stream. Appeal of Assessment. State statutes establish various mechanisms for a property owner to appeal the assessment of a tax on its property. Typically, there are four issues that can be raised in property tax appeals: overvaluation, uniformity, misclassification and exemption. Overvaluation appeals are the most common appeals presented by taxpayers. An overvaluation appeal requires the taxpayer to prove that the true value in money of the property is less than that determined by the assessor. Uniformity appeals are based on the assertion that other property in the same class and county as the subject property is assessed at a lower percentage of value than the subject property. A misclassification appeal is based on an assertion that assessing authorities have improperly subclassed a property. Exemption appeals are based on claims that the property in question is exempt from taxation. Overvaluation appeals generally must be made administratively, first to the Board of Equalization and then to the State Tax Commission, within prescribed time periods following notice of an increase in assessment. Appeals to the Board of Equalization must be filed with the County Assessor on or before the third Monday in June of each year. Appeals to the State Tax Commission must be filed by the later of August 15 and 30 days after the date of the final decision of the Board of Equalization. Where valuation is not an issue, appeals must be taken directly to the State circuit court rather than the State Tax Commission. If an appeal is pending on December 31, the due date for the payment of taxes, State statute provides a procedure for the payment of taxes under protest. If taxes are paid but not under protest, the taxpayer cannot recover the amount paid unless that taxes have been mistakenly or erroneously paid. Application for a refund of mistakenly or erroneously paid taxes must be made within one year after the tax in dispute was paid. Typically, only that portion of the taxes being disputed is identified as being paid under protest, unless a claim

30 of exemption is being asserted. The portion of the tax paid under protest is required to be held in an interest bearing account. Unless an appeal before the Board of Equalization or State Tax Commission is pending, suit must be brought by the taxpayer to resolve the dispute within 90 days, or the escrowed funds will be released to the Collector of Revenue and distributed to the Taxing Districts. Reassessment and Tax Rate Rollback. As previously stated, a general reassessment of all property in the State is required to be conducted every two years. When, as a result of such reassessment, the assessed valuation within a Taxing District increases by more than an allowable percentage, the Taxing District is required to roll back the rate of tax within the Taxing District so as to produce substantially the same amount of tax revenue as was produced in the previous year increased by an amount called a preceding valuation factor. A preceding valuation factor is a percentage increase or decrease based on the average annual percentage changes in total assessed valuation of the County over the previous three or five years, whichever is greater, adjusted to eliminate the effect of boundary changes, changes from State to County assessed property, general reassessment and State ordered changes. The Hancock Amendment. An amendment to the Missouri Constitution limiting taxation and government spending was approved by Missouri voters on September 4, 1980, and went into effect with the fiscal year. The amendment (Article X, Sections 16 through 24 of the Missouri Constitution, and popularly known as the Hancock Amendment) limits the rate of increase and the total amount of taxes that shall be imposed in any fiscal year, and provides that the limit shall not be exceeded without voter approval. Provisions are included in the Hancock Amendment for rolling back tax rates to produce an amount of revenues equal to that of the previous year if the definition of the tax base is changed or if property is reassessed. The tax levy on the assessed valuation of new construction is exempt from this limitation in the initial year of new construction. Tax Delinquencies. All real estate upon which taxes or Payments in Lieu of Taxes remain unpaid on the first day of January, annually, are delinquent, and the County Collector is empowered to enforce the lien of the taxing jurisdictions thereon. Whenever the County Collector is unable to collect any taxes on the tax roll, having diligently endeavored and used all lawful means to do so, he is required to compile lists of delinquent tax bills collectible by him. All lands and lots on which taxes are delinquent and unpaid are subject to suit to collect delinquent tax bills or suit for foreclosure of the tax liens. Upon receiving a judgment, the sheriff must advertise the sale and the land, fixing the date of sale within 30 days after the first publication of the notice. Delinquent taxes, with penalty, interest and costs, may be paid to the County Collector at any time before the property is sold therefor. No action for recovery of delinquent taxes shall be valid unless initial proceedings therefor are commenced within five years after delinquency of such taxes. Collection of Economic Activity Tax Revenues Retail businesses are required to collect the sales tax from purchasers at the time of sale, and pay the said amounts collected to the Department or Revenue of the State with the filing of returns, except for the sales tax on motor vehicles, trailers, boats and outboard motors, which is due at the time application is made for title and registration. The sales volume of a retail business determines the frequency of payments made to the Department of Revenue of the State, which are due on the tenth day of each calendar month for sales taxes collected in the preceding calendar month. Retail businesses located in the City submit applications to the City for a merchants license and an occupancy permit, and before such license and permit are awarded verification of a tax identification number from the State is made by the City. In the event of a failure by a retail business to remit sales taxes, interest and penalties, the unpaid amount may become a lien in the nature of a judgment lien against the delinquent taxpayer. In the event of overpayment by any retail business as a result of error or duplication, provision is made under State law for refunds. Within 30 days of receipt of sales taxes by the Department of Revenue of the State, the Director of the Department of Revenue remits to the State Treasurer for deposit in a special trust fund for the benefit of each political subdivision entitled to a sales tax distribution the amount of such sales tax receipts less 1% of such

31 amount which constitutes a fee paid to the State for collecting and distributing the tax. The State Treasurer then distributes moneys on deposit in the special trust fund on behalf of each such political subdivision to such political subdivision on a monthly basis. The TDD Sales Tax (as defined herein) imposed by the District is not collected by the Department of Revenue of the State. Rather, the City will collect the TDD Sales Tax and administer the TDD Sales Tax in accordance with the Cooperation Agreement between the City and the District. See the section herein captioned THE DISTRICT. THE CITY The Bonds are not a general obligation of the City and are payable solely from the PILOTs, EATs, Municipal Revenues and TDD Revenues generated in Sub-Area 2A. The information in this Official Statement regarding the City has been furnished by the City in order to provide relevant demographic information regarding the area in and around Sub-Area 2A and should not be construed as an indication that the Bonds are payable from any source other than such revenues. The City is located in West St. Louis County, Missouri, approximately 20 miles from downtown St. Louis. The City was incorporated in 1950 and has a population of approximately 31,283. For additional information regarding the City, see APPENDIX A: INFORMATION REGARDING THE CITY OF BALLWIN, MISSOURI. Overview THE DISTRICT The District is a political subdivision of the State created pursuant to the TDD Act. The TDD Act authorizes the District to impose real property taxes, special assessments or a sales tax within the District to fund transportation-related projects. The District is coterminous with Sub-Area 2A, with the exception of the two properties currently being operated as a Quik Trip and an Applebee s, respectively. The TDD Act vests all power of the District in a Board of Directors that is elected by the owner of property in the District. Regency/DS Ballwin, LLC, the Developer, is the sole property owner of land within the District. Members of the Board of Directors serve a term of three years, except that the term of the initial members of the Board of Directors are staggered so that the terms of the initial members are either one-year, two-year or three-year terms. Each director serves without compensation and may be removed by the District with cause. The by-laws of the District provide for the annual election of officers. The current directors and officers of the District and the date on which their terms expire are as follows: Name Office Principal Employment Term Expires Daniel Fox Chairman and Regency Centers Corporation May 24, 2004 Executive Director Christopher Blanton Director The Stolar Partnership May 24, 2004 Sharon Diers Director Regency Centers Corporation May 24, 2003 Kathryn Giddings Director The Stolar Partnership May 24, 2003 Julie Ellison Director Regency Centers Corporation May 24, 2002 Lori Bockman Secretary The Stolar Partnership Not applicable

32 TDD Sales Tax On August 23, 2001, the qualified voters of the District approved the imposition of a sales tax in the amount of one-quarter of one cent (1/4 ) on all transactions which are taxable pursuant to the TDD Act (the TDD Sales Tax ). The TDD Sales Tax became effective on October 1, The TDD Sales Tax is to remain in effect for a period of not longer than 30 years. The retail establishments located in Sub-Area 2A of the Redevelopment Area are within the boundaries of the District, with the exception of the Quik Trip and Applebee s establishments. The retail establishments within the boundaries of the District will collect the TDD Sales Tax and forward the TDD Sales Tax revenues to the City pursuant to the Cooperation Agreement between the City and the District. Pursuant to the TDD Act, no transportation development district may repeal or amend its sales tax unless such repeal or amendment will not impair the district s ability to repay any liabilities which it has incurred, money which it has borrowed or revenue bonds, notes or other obligations which it has issued. Cooperation Agreement Pursuant to the Cooperation Agreement, the City agreed to construct the Connector Road, the District covenants to budget and request an appropriation of TDD Revenues each fiscal year to be used for the repayment of debt service on a portion of the Bonds, and the City agrees to perform all functions incident to the administration, collection, enforcement and operation of the TDD Sales Tax. There can be no assurance that the District will appropriate the TDD Revenues in any fiscal year and the Cooperation Agreement does not obligate the District to do so. The City will charge a fee of 1% of the TDD Sales Tax revenues collected as a fee for such collection services. The City agrees to deposit the TDD Sales Tax revenues (less the City s 1% collection fee and less certain administrative expenses of the District, which are limited to $20,000 per year) into a special trust account established by the City, the Ballwin Town Center TDD Fund (the TDD Fund ). On a monthly basis, the City will deposit the TDD Sales Tax revenues constituting EATs into the Sub-Area 2A EATs subaccount of the Redevelopment Project Sub-Area 2A Account of the Special Allocation Fund and will deposit the TDD Revenues, along with the TDD Sales Tax revenues constituting EATs, with the Trustee to be applied in accordance with the Indenture. See the section herein captioned SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Indenture Funds and Accounts. City Proceedings THE REDEVELOPMENT PROJECT On April 12, 1999, the Board of Aldermen of the City adopted an ordinance creating the TIF Commission. The TIF Commission prepared and reviewed the Redevelopment Plan. The Redevelopment Plan addresses redevelopment of the Redevelopment Area, which is an area of the City generally known as Ballwin Town Center, located within the City along the Manchester Road commercial corridor, which runs north-south through the heart of the City and which is a primary economic engine for the City. Following a public hearing, the TIF Commission passed a resolution approving the Redevelopment Plan and recommending that the City approve the Redevelopment Plan and approve and designate the Redevelopment Area as a redevelopment area under the TIF Act. Zelman Retail Partners, Inc. ( Zelman ) submitted a redevelopment proposal to the City for the portion of the Redevelopment Area referred to herein as Sub-Area 2A. On October 11, 1999, the Board of Aldermen of the City adopted ordinances approving the Redevelopment Plan, approving development projects for Sub-Area 2A, adopting tax increment financing within Sub-Area 2A and authorizing the City to enter into a redevelopment agreement with Zelman. See the section herein captioned INTRODUCTION The City and Proceedings Relating to the Redevelopment Project for a map showing the Redevelopment Area, including Sub-Area 2A, and the location of the Redevelopment Project

33 In November 1999, the City and Zelman entered into a redevelopment agreement (the Initial Redevelopment Agreement ) for the construction of the Redevelopment Project. With the City s approval, Zelman subsequently assigned all of its rights, duties, obligations, title and interest in the Initial Redevelopment Agreement to the Developer. The City and the Developer entered into an Amended and Restated Redevelopment Agreement dated as of June 13, 2000, as amended by the First Amendment to the Amended and Restated Redevelopment Agreement dated as of May 1, 2002 (as amended, the Redevelopment Agreement ), under which the Developer agreed to construct the Redevelopment Project and advance certain costs of the Redevelopment Project. Among other things, the Redevelopment Agreement identifies certain project costs that the Developer advanced for the Redevelopment Project and the amount of such costs that the City reimbursed with tax increment revenue notes. The Redevelopment Agreement provides that the City may reimburse the Developer by issuing tax increment revenue obligations in a maximum amount of $13,665,000 (plus interest to accrue on such obligations). The City has issued $13,665,000 aggregate principal amount of TIF Notes to evidence the City s obligation to reimburse the Developer for advances made by the Developer to pay for certain costs of the Redevelopment Project. The City has determined that it will issue the Bonds for the purpose of refunding the TIF Notes and for such other purposes as described herein. See the section herein captioned PLAN OF FINANCE Purpose of the Bonds. The Developer The Developer of Ballwin Town Center is Regency/DS Ballwin, LLC, a Missouri limited liability company. The sole manager is Regency Realty Group, Inc., a Florida corporation which has as its President and Chief Operating Officer, Mary Lou Finla and as its Secretary, Chris Leavitt. The Developer was formed for the purpose of owning, developing and operating the Redevelopment Project. The Developer is affiliated with Regency Centers Corporation, a nationally recognized commercial real estate firm based in Jacksonville, Florida, specializing in the development, management and leasing of commercial properties. The Manager Regency Centers, L.P. (the Manager ) acts as the Manager and Leasing Agent of the Redevelopment Project pursuant to a management agreement, dated as of October 1, 2001 (the Management Agreement ), between the Manager and the Developer. The Management Agreement automatically renews on an annual basis, absent termination by either party. Under the Management Agreement, the Manager is obligated to perform such duties as are necessary and desirable for the care, protection, operation, maintenance and repair of the Redevelopment Project, including to supervise maintenance personnel, prepare monthly and annual comparative operating statements, collect rents and other charges, make disbursements as directed, maintain the property in accordance with the budget and authorizations of the Developer and maintain appropriate relationships with tenants. The Management Agreement will be terminated upon the sale of the Redevelopment Project, respectively, to parties unrelated to the Developer. The Management Agreement is subject to early termination by either party thereto. Pursuant to the Management Agreement, the Manager receives a monthly management fee of 3% of the gross rents, including percentage rents, becoming due and payable as collected, and leasing fees of 6% of base rents received during the primary term of the lease, payable as follows: one-half upon lease execution and one-half when payment of first month s rent and opening have occurred

34 Competition The Developer has identified the following shopping centers as competitors of the Redevelopment Project: Shopping Center Major Tenants Approximate Square Feet of Shopping Center Approximate Distance from Ballwin Town Center Manchester Meadows Ballwin Plaza Central Plaza Dietrich Meadows Wal-Mart, Home Depot, OfficeMax, Sports Authority, PetsMart and Linens N Things Schnucks Supermarket and Michael s TJ Maxx, Borders Books and Bed, Bath and Beyond Designer Shoe Warehouse and CompUSA 450,000 3 miles 200,915 1 mile 171,575 1 mile 82,000 3 miles [Remainder of page intentionally left blank]

35 Tenants Olde Towne Plaza THE OCCUPANTS OF THE REDEVELOPMENT PROJECT The following table summarizes the occupancy of the Redevelopment Project as of May 1, 2002, based on information provided by the Developer. In addition to the retail space identified below, approximately 5,397 square feet of retail space in the Redevelopment Project remains to be leased. Tenant/Trade Name/Use Size (sq. ft.) Status Lease Term/Renewal Options Lowe s Home Centers, Inc. Lowe s home improvement store 135,197 Leased Opened 20 years/6 5-year options Ultimate Electronics, Inc. Ultimate Electronics- electronics store 33,500 Leased Opened 15 years/3 5-year options Stein Mart, Inc. Stein Mart general merchandise store Marshall s of MA, Inc. Marshall s- family apparel and home fashion store HomeGoods, Inc. HomeGoods home fashion store 30,600 Leased Opened 15 years/3 5-year options 30,000 Leased Opened 10 years/3 5-year options 25,000 Leased Opened 10 years/3 5-year options O Charley s, Inc. O Charley s restaurant 7,062 Leased Opened 15 years/3 5-year options Famous Brand Shoes, Inc. Famous Brand Shoes shoe store 4,920 Leased Opened 5 years/ 1 5-year option BeautyFirst, Inc. BeautyFirst retail salon and beauty supply store 3,484 Leased Projected Opening June 1, years/ 1 5-year option Kinko s, Inc. Kinko s copy service center 3,850 Leased Projected Opening July 15, years/ 1 5-year option McMo Management, LLC McAlister s Deli - restaurant 3,770 Leased Projected Opening July 15, years/2 5-year options EEEclips, L.L.C. SportClips Nextel Retail Stores, Inc. Nextel 1,700 Lease Pending Projected Opening August 1, ,700 Lease Pending Projected Opening August 1, 2002 Starbucks Corporation Starbucks coffee specialty retailer 1,500 Leased Projected Opening August 1, years/2 5-year options Total 282,

36 Lease Provisions In general, and subject to various exceptions, the leases of tenants of the Redevelopment Project provide that tenants shall (a) pay base rent and, in some cases, annual percentage rent based on gross sales of the leased premises; (b) pay their proportionate shares of real estate taxes and common area maintenance charges; (c) maintain varying levels of public liability and property damage insurance; (d) occupy and operate the leased premises for its permitted uses; and (e) be subject to various restrictions regarding their ability to assign or sublet the leased premises. Certain of the leases contain provisions prohibiting the Developer from leasing any premises in the Redevelopment Project to businesses which are engaged in businesses similar to that of the lessee. Information Regarding Major Anchor Tenants The anchor tenants in the Redevelopment Project are Lowe s, Stein Mart, Ultimate Electronics, Marshall s and HomeGoods. Lowe s Companies, Inc. ( Lowe s ) is a retailer serving the do-it-yourself home improvement, home décor, and home construction markets. Lowe s operates more than 600 stores in 40 states. Employees own about 15% of Lowe s. Ultimate Electronics, Inc. ( Ultimate Electronics ) serves the mid- to upper-end of the electronics market. Ultimate Electronics operates more than 35 stores in 10 states. Its stores range in size from 10,000 to 52,000 square feet. Stein Mart, Inc. ( Stein Mart ) offers fashion apparel and accessories at off-price discounts. Stein Mart operates about 250 stores in 30 states. Marshall s of MA, Inc. ( Marshall s ) operates more than 570 stores selling family apparel, home fashion and accessories. TJX Companies, Inc. owns this specialty-apparel chain and also operates HomeGoods as described below. HomeGoods, Inc. ( HomeGoods ) operates more than 112 off-price home fashion stores. BONDOWNERS RISKS An investment in the Bonds is subject to a number of significant risk factors. The following is a discussion of certain risks that could affect payments to be made with respect to the Bonds. Such discussion is not, and is not intended to be, exhaustive and should be read in conjunction with all other parts of this Official Statement and should not be considered as a complete description of all risks that could affect such payments. Prospective purchasers of the Bonds should analyze carefully the information contained in this Official Statement, including the Appendices hereto, and additional information in the form of the complete documents summarized herein, copies of which are available as described in this Official Statement. Nature of the Obligations The Bonds are special, limited obligations of the City and are payable solely from and secured by a pledge of PILOTs, TDD Revenues (subject to annual appropriation by the District), EATs (subject to annual appropriation by the City), Municipal Revenues (subject to annual appropriation by the City) generated within Sub-Area 2A, and certain other revenues pursuant to the Indenture, including amounts in the Debt Service Reserve Fund. The realization of such revenues is dependent upon, among other things, the capabilities of the Developer to attract tenants and maintain occupancy of the Redevelopment Project and future changes in

37 economic and other conditions that are unpredictable and cannot be determined at this time. The Bonds do not constitute a general obligation of the City or the District and do not constitute indebtedness of the City, the District, the State or any political subdivision of the State within the meaning of any constitutional or statutory provision or limitation. Neither the City, the District, the State nor any political subdivision of the State is obligated to levy any tax or to make any appropriation for the payment of the Bonds. Non-Appropriation The application of EATs and Municipal Revenues to the payment of the principal of and interest on the Bonds is subject to annual appropriation by the City. The application of TDD Revenues to the payment of the principal of and interest on the Bonds is subject to annual appropriation by the District. Although the City has covenanted in the Indenture that the appropriation of the EATs and Municipal Revenues to the Special Allocation Fund will be included in the budget submitted to the Board of Alderman for each fiscal year and the District has covenanted in the Cooperation Agreement that the appropriation of the TDD Revenues will be included in the budget submitted to the Board of Directors for each fiscal year, there can be no assurance that such appropriation will be made by the Board of Aldermen or the Board of Directors of the District, respectively, and neither the Board of Aldermen or the Board of Directors of the District is legally obligated to make any such appropriation. Financial Feasibility of the Redevelopment Project The financial feasibility of the Redevelopment Project depends in large part upon the ability of the Developer to attract sufficient numbers of tenants to achieve and then to maintain substantial occupancy throughout the term of the Bonds. If the Developer fails to achieve and maintain substantial occupancy of the Redevelopment Project, there may be insufficient PILOTs, EATs, TDD Revenues and Municipal Revenues generated within Sub-Area 2A to pay the Bonds. See the sections herein captioned PROJECTED NET PROCEEDS AND NET DEBT SERVICE and APPENDIX B TAX INCREMENT FINANCING REVENUE PROJECTIONS. The Projections include assumptions relating to the completion, lease-up and future occupancy of the Redevelopment Project and certain other significant assumptions. Some assumed events and circumstances may not materialize and unanticipated events and circumstances will occur subsequent to the date hereof. Therefore, the actual results achieved during the forecast period may vary from the forecast and the variations may be material. Reliance on the Developer, Tenants and Subsequent Property Owners The development of the Redevelopment Project has been undertaken by the Developer and those parties contracting with the Developer. The Developer is under no obligation to own the Redevelopment Project for the term of the Bonds. To the extent that the Developer sells any part of the Redevelopment Project, the payment of debt service on the Bonds will be dependent (regardless of occupancy) on subsequent owners of the Redevelopment Project to provide for the payment of PILOTs for deposit into the Special Allocation Fund. The Redevelopment Project is currently managed by Regency Centers, L.P. The Manager is under no obligation to continue to manage the Redevelopment Project. See the section herein captioned THE REDEVELOPMENT PROJECT The Manager. Bondowners will be dependent on current and future managers of the Redevelopment Project to maintain occupancy in order to assure that EATs, Municipal Revenues, and TDD Revenues are generated within Sub-Area 2A and to maintain assessed valuation in order that PILOTs will be generated

38 The leases for the Redevelopment Project provide (or will provide) that each tenant is responsible for its pro rata share of any real estate taxes (including PILOTs) and certain other common expenses. If any tenant defaults in paying its pro rata share of such taxes or other common expenses, the Developer or any subsequent owner(s) of the Redevelopment Project will be responsible for such payments, although the Developer or other owner(s) would have the right to declare a default under the tenant s lease if the tenant failed to pay such amounts. The leases generally require the tenant to operate a business continuously on the leased premises; however, in some cases a tenant may cease operations but continue to pay rent to the Developer or other owner. Under such circumstances, no EATs, Municipal Revenues, or TDD Revenues would be generated by the tenant. In addition, the Developer has no obligation to lease or sell space at the Redevelopment Project solely to entities that generate EATs, Municipal Revenues and TDD Revenues, and the Developer (or other owner(s)) may modify, demolish, redevelop or change the Redevelopment Project in such manner as it may determine. See the section herein captioned THE OCCUPANTS OF THE REDEVELOPMENT PROJECT. No Mortgage of the Redevelopment Project Payment of the principal of and interest on the Bonds is not secured by any deed of trust, mortgage or other lien on the Redevelopment Project or any portion thereof; however, under the TIF Act, PILOTs that are due and owing constitute a lien against the real estate in Sub-Area 2A from which they are derived. Upon a default in the payment of any PILOTs, the lien for unpaid PILOTs may be enforced by the City or the Bondowners as provided in the TIF Act. Failure to Maintain Levels of Assessed Valuation There can be no assurance that the assessed value of the Redevelopment Project will equal or exceed the forecasted assessed value. Even if the assessed value is initially determined as forecasted in the Projections, there can be no assurance that such assessed value will be maintained throughout the term of the Bonds. If at any time during the term of the Bonds the actual assessed value is less than forecasted, the amount of the PILOTs will be less than forecasted and the amounts paid into the Special Allocation Fund may not be sufficient to pay debt service on the Bonds. Even if the County Assessor s determination of the assessed value of the Redevelopment Project equals or exceeds the forecasted assessed value, the Developer or successor owners of the Redevelopment Project have the right to appeal such determination. Additionally, a tenant, pursuant to a lease, has also been granted the right to appeal such determination should the Developer or successor owners decline to do so. If any such appeal is not resolved prior to the time when real estate taxes and PILOTs are due, the taxpayer may pay the taxes and PILOTs under protest. In such event, that portion of taxes and PILOTs being protested will not be available for deposit into the Special Allocation Fund until the appeal has been concluded. If the appeal is resolved in favor of the taxpayer, the assessed value of the Redevelopment Project will be reduced, in which event the PILOTs may be less than forecasted. See the section herein captioned TAX INCREMENT FINANCING IN MISSOURI Assessment and Collection of Ad Valorem Taxes. Pending TIF Litigation A petition has been filed with a Missouri court challenging the constitutionality of various provisions of the TIF Act in connection with a tax increment financing project in St. Peters, Missouri. It alleges, among other things, that portions of the TIF Act violate the Missouri Constitution by authorizing the lending of public credit and the granting of public moneys in aid of a private corporation. Although it is not possible to predict the outcome of such a legal challenge, if Missouri courts find that the challenged portions of the TIF Act do violate such constitutional provisions and if such a conclusion were applicable to the Redevelopment Area, including Sub-Area 2A, it is possible that some or all of the PILOTs and EATs may not be available to pay principal of and interest on the Bonds, and the validity of the Bonds and the Indenture could be adversely affected. See the section herein captioned LITIGATION

39 Changes in State and Local Tax Laws The Projections assume no substantial change in the basis of extending, levying and collecting real property taxes, PILOTs, EATs, Municipal Revenues and TDD Revenues. Any change in the current system of collection and distribution of real property taxes, PILOTs, EATs, Municipal Revenues or TDD Revenues in the County, the City or the District, including without limitation the reduction or elimination of any such tax, judicial action concerning any such tax or voter initiative, referendum or action with respect to any such tax, could adversely affect the availability of revenues to pay the principal of and interest on the Bonds. There can be no assurance that the current system of collection and distribution of the real property taxes, PILOTs, EATs, Municipal Revenues or TDD Revenues in the County, the City or the District will not be changed by any competent authority having jurisdiction to do so, including without limitation the State, the County, the City, the District, school districts, the courts or the voters, and the Indenture does not limit the ability of the City to make any such changes with respect to City taxes and levies. Reductions in State and Local Tax Rates Any taxing district in the Redevelopment Area could lower its tax rate, which would have the effect of reducing the PILOTs, EATs, Municipal Revenues or TDD Revenues derived from Sub-Area 2A. Such a reduction in rates could be the result of the governing body of the taxing district s desire to lower tax rates, taxpayer initiative, or in response to state or local litigation or legislation affecting the broader taxing structure within the taxing district, such as litigation or legislation affecting the primary reliance on ad valorem property taxes to fund elementary and secondary education in the State. Limitations on Remedies The remedies available upon a default under the Indenture and other legal documents relating to the Bonds will, in many respects, be dependent upon judicial actions, which are often subject to discretion and delay. Under existing constitutional and statutory laws and judicial decisions, including the United States Bankruptcy Code, the remedies specified in the Indenture, and other legal documents may not be readily available or may be limited. The various legal opinions to be delivered in connection with the issuance of the Bonds will be expressly subject to the qualification that the enforceability of the Indenture and other legal documents is limited by bankruptcy, reorganization, insolvency, moratorium and other similar laws affecting the rights of creditors generally and by the exercise of judicial discretion in appropriate cases. Early Redemption of the Bonds Pursuant to the Indenture, funds on deposit in the Revenue Fund, in excess of the amount required to pay rebate, if any, to the United States of America, to pay interest and principal on the Bonds as and when due, to restore any deficiency in the Debt Service Reserve Fund, to pay certain fees and expenses and to make Pass- Through Payments, are to be used to redeem the Bonds prior to maturity pursuant to the redemption provisions described in this Official Statement. It is anticipated that a portion of the Bonds will be redeemed prior to their stated maturity. Purchasers of the Bonds should bear in mind that such redemption could affect the price of the Bonds in the secondary market. See THE BONDS Redemption and PROJECTED NET PROCEEDS AND NET DEBT SERVICE. Changes in Economic and Market Conditions The assessed values and revenues contained in the Projections and used in determining the projected average life of the Bonds are based on the current status of the national and local business economy and assume a future performance of the real estate market similar to the historical performance of such market in the metropolitan St. Louis area. Changes in real estate market conditions in the St. Louis area, as well as changes in general or local economic conditions, could adversely affect the value of the property and the level of economic activity in Sub-Area 2A and, consequently, the amounts of PILOTs, EATs, Municipal Revenues and TDD Revenues generated in Sub-Area 2A and collected for deposit into the Special Allocation Fund or the TDD Account, as applicable, for payment of debt service on the Bonds

40 Factors Affecting EATs, Municipal Revenues and TDD Revenues EATs, Municipal Revenues and TDD Revenues are contingent and may be adversely affected by a variety of factors, including economic conditions within Sub-Area 2A, and the surrounding area, competition from other retail businesses, rental rates and occupancy rates in Sub-Area 2A, suitability of the Redevelopment Project for the local market, local unemployment, availability of transportation, neighborhood changes, crime levels in the area, vandalism, operating costs and interruption or termination of operation of the Redevelopment Project as a result of fire, natural disaster, strikes or similar events, among many other factors. As a result, it is difficult to predict with certainty the expected amount of EATs, Municipal Revenues and TDD Revenues that will be available for appropriation and available to pay the principal of and interest on the Bonds. The retail sales industry is highly competitive. Retail businesses outside of Sub-Area 2A that are currently existing or which are developed after the date of this Official Statement will be competitive with retail businesses in Sub-Area 2A and could have an adverse impact on the available amount of EATs, Municipal Revenues and TDD Revenues generated within Sub-Area 2A. In addition to the foregoing, the partial or complete destruction of the Redevelopment Project as a result of fire, natural disaster or similar casualty event, or the temporary or permanent closing of one or more retail establishments in the Redevelopment Project due to strikes or business failure, would adversely affect the EATs, Municipal Revenues and TDD Revenues derived from Sub-Area 2A and thereby adversely affect the revenues available to pay the Bonds. A casualty event may also adversely affect the amount of PILOTs derived from Sub-Area 2A. Any insurance maintained by owners or tenants of the Redevelopment Project for such casualty or business interruption is not likely to include coverage for property or sales taxes that otherwise would be generated by the establishment. Projections The forecasted annual PILOTs, EATs, Municipal Revenues and TDD Revenues contained in the Projections and included or reflected in this Official Statement are based on various assumptions concerning facts and events over which the City and the Developer have no control. No representation or warranty is or can be made about the amount or timing of any future income, loss, occupancy, valuation, increased assessment or revenues, or that actual results will be consistent with the Projections or with the forecasts contained therein. The information in the Projections is based on various assumptions, estimates and opinions. The actual results will vary from the Projections and the variations may be material. There is no assurance that actual events will correspond with the Projections or the assumptions, estimates and opinions on which they are based. Availability of Debt Service Reserve Fund At the time of issuance of the Bonds, the Debt Service Reserve Fund will be funded from proceeds of the Bonds in the amount of the Debt Service Reserve Requirement for the Bonds. There can be no assurance that the amounts on deposit in the Debt Service Reserve Fund, if needed for payment of the Bonds, will be available in the full amount of the Debt Service Reserve Requirement, because (1) the market value of the securities in which such funds are invested may have declined or (2) funds may previously have been transferred from such Fund to the Debt Service Fund; and in any such case sufficient amounts may not be available in the Revenue Fund to replenish the Debt Service Reserve Fund to the Debt Service Reserve Requirement. See APPENDIX C: DEFINITIONS AND SUMMARIES OF THE INDENTURE AND THE CONTINUING DISCLOSURE AGREEMENT. Determination of Taxability Failure to comply with certain legal requirements (see the section herein captioned TAX MATTERS ) could cause the inclusion of interest on the Bonds in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. In such event, the maturity of the Bonds may be

41 accelerated, in the discretion of the Trustee or at the request of the owners of a majority of the aggregate principal amount of the Bonds then outstanding. The Indenture does not provide for the payment of any additional interest or penalty in the event of the taxability of the interest on the Bonds. In the event of the taxability of the Bonds, if the maturity of the Bonds is not accelerated by the Trustee, Bondholders would continue to be entitled to receive payments of principal and interest as and when due, but would be required to include the interest payments in their gross income for federal income tax purposes. LITIGATION The City. There is no litigation, controversy or other proceeding of any kind pending or, to the City s knowledge, threatened in which any matter is raised or may be raised questioning, disputing, challenging or affecting in any way the legal organization of the City or its boundaries, the right or title of any of the City s officers to their respective offices, the Redevelopment Plan, the Redevelopment Project or the Redevelopment Area, including Sub-Area 2A, the constitutionality or validity of the TIF Notes, the legality of any official act taken in connection with the issuance of the Bonds, the constitutionality or validity of the Bonds or the legality of any of the proceedings had or documents entered into in connection with the authorization, issuance and sale of the Bonds. The District. There is no litigation, controversy or other proceeding of any kind pending, or to the District s knowledge, threatened in which any matter is raised or may be raised questioning, disputing, challenging or affecting in any way the legal organization of the District, or its boundaries, the right or title of any of the District s officers to their respective offices, the Cooperation Agreement, the constitutionality or validity of TDD Sales Tax, the legality of any official act taken in connection with the imposition of the TDD Sales Tax or the legality of any of the proceedings had or documents entered into in connection with the authorization and implementation of the TDD Sales Tax and the execution of the Cooperation Agreement. TIF Litigation. On August 9, 2000, St. Charles County, Missouri ( St. Charles County ) filed a petition against the City of St. Peters, Missouri (St. Charles County v. City of St. Peters, Circuit Court of St. Charles County, case no. 00CV ) challenging the constitutionality of various provisions of the TIF Act in connection with a redevelopment project in St. Peters. St. Charles County subsequently voluntarily dismissed this petition without prejudice, but filed a new lawsuit on October 4, 2001 against St. Peters and Costco Corporation (St. Charles County, et al. v. City of St. Peters, et al, in the circuit court of St. Charles County, case no. 01CV ). The Missouri Attorney General s office has intervened in this litigation and will take a role in defense of the TIF Act in the on-going court proceedings. The second lawsuit is currently pending. It alleges, among other things, that portions of the TIF Act violate the Missouri Constitution by authorizing the lending of public credit and granting of public moneys in aid of a private corporation. The basis for this allegation is that St. Peters used tax increment financing to aid Costco Corporation s development. The lawsuit further alleges that portions of the TIF Act relating to the capture and use of PILOTs and EATs violate the Missouri Constitution. It is not possible to determine the outcome of this litigation. However, if St. Charles County is successful on certain of the allegations, portions of the TIF Act may be declared unconstitutional. If such a holding were to become applicable to Sub-Area 2A, the PILOTs, EATs, and Municipal Revenues may not be available to pay principal of and interest on the Bonds and the validity of the Bonds and the Indenture could be adversely affected. There would be a similar effect on other existing and pending tax increment obligations and projects throughout the State. Based on consultation with counsel, the City believes that under existing law, as currently interpreted by Missouri courts, the outcome of the St. Peters litigation will not have any material adverse effect on the Bonds. The City cannot, however, guarantee the outcome of any litigation

42 LEGAL MATTERS Legal matters incident to the authorization, issuance and sale of the Bonds by the City are subject to the approving legal opinion of Armstrong Teasdale LLP, St. Louis, Missouri, Bond Counsel, whose approving opinion will be delivered with the Bonds. A copy of the proposed form of such opinion is attached hereto as APPENDIX D. Certain legal matters will be passed upon for the City by its counsel, Polster, Lieder, Woodruf & Lucchesi, St. Louis, Missouri, for the District and the Developer by The Stolar Partnership, St. Louis, Missouri, and for the Underwriter by its counsel, Thompson Coburn LLP, St. Louis, Missouri. The legal opinions to be delivered concurrently with the delivery of the Bonds express the professional judgment of the attorneys rendering the opinions as to the legal issues explicitly addressed therein. By rendering a legal opinion, the opinion giver does not become an insurer or guarantor of that expression of professional judgment, of the transactions opined upon or of the future performance of parties to such transaction, and the rendering of an opinion does not guarantee the outcome of any legal dispute that may arise out of the transaction. Opinion of Bond Counsel TAX MATTERS Federal and Missouri Tax Exemption. In the opinion of Armstrong Teasdale LLP, Bond Counsel, under existing law, the interest on the Bonds (including any original issue discount properly allocable to an owner thereof) is excluded from gross income for federal and Missouri income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. It should be noted however, that for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings. The opinions set forth in this paragraph are subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code ), that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal and Missouri income tax purposes. The City has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal and Missouri income tax purposes retroactive to the date of issuance of the Bonds. The Bonds have not been designated as qualified tax-exempt obligations for purposes of Section 265(b) of the Internal Revenue Code. Original Issue Discount Bonds. In the opinion of Bond Counsel, subject to the conditions set forth above, the original issue discount in the selling price of each Bond sold in the initial offering at a price less than the principal amount thereof (hereinafter referred to as the OID Bonds ), to the extent properly allocable to each owner of such OID Bond, is excludable from gross income for federal income tax purposes with respect to such owner. Original issue discount is the excess of the stated redemption price at maturity of an OID Bond over the initial offering price to the public (excluding underwriters and intermediaries) at which price a substantial amount of the OID Bonds were sold. Under Section 1288 of the Code, original issue discount on tax-exempt bonds accrues on a compound basis. For an owner who acquires an OID Bond in this offering, the amount of original issue discount that accrues during any accrual period generally equals (i) the issue price of such OID Bond plus the amount of original issue discount accrued in all prior accrual periods, multiplied by (ii) the yield to maturity on such OID Bond (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period), less (iii) any interest payable on such OID Bond during such accrual period. The amount of original issue discount so accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period, will be excluded from gross income for federal income tax purposes, and will increase the owner s tax basis in such OID Bond. Any gain realized by an owner from a sale, exchange, payment or redemption of an OID Bond would be treated as gain from the sale or exchange of such Bond. Owners of OID Bonds should consult with

43 their individual tax advisors to determine whether the application of the proposed original issue discount federal regulations will require them to include, for State and local income tax purposes, an amount of interest on the OID Bonds as income even though no corresponding cash interest payment is actually received during the tax year. Bond Counsel expresses no opinion regarding other federal tax consequences arising with respect to the Bonds. Other Tax Consequences Prospective purchasers of the Bonds should be aware that there may be tax consequences of purchasing the Bonds other than those discussed under Opinion of Bond Counsel, including the following: (a) Section 265 of the Internal Revenue Code denies a deduction for interest on indebtedness incurred or continued to purchase or carry the Bonds or, in the case of a financial institution, that portion of such institution s interest expense allocable to interest on the Bonds; (b) with respect to insurance companies subject to the tax imposed by Section 831 of the Internal Revenue Code, Section 832(b)(5)(B)(i) reduces the deduction for loss reserves by 15 percent of the sum of certain items, including interest on the Bonds; (c) interest on the Bonds earned by certain foreign corporations doing business in the United States could be subject to a branch profits tax imposed by Section 884 of the Internal Revenue Code; (d) passive investment income, including interest on the Bonds, may be subject to federal income taxation under Section 1375 of the Internal Revenue Code for Subchapter S corporations that have Subchapter C earnings and profits at the close of the taxable year, if greater than 25% of the gross receipts of such Subchapter S corporation is passive investment income; and (e) Section 86 of the Internal Revenue Code requires recipients of certain Social Security and certain Railroad Retirement benefits to take into account, in determining gross income, receipts or accruals of interest on the Bonds. Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Bonds should consult their own tax advisors as to the applicability of these tax consequences. CONTINUING DISCLOSURE The City will execute a Continuing Disclosure Agreement in accordance with the Rule 15c2-12 promulgated by the Securities and Exchange Commission, pursuant to which the City will agree to provide disclosure of certain financial and operating information on an ongoing basis, including (a) audited annual financial statements and certain annual operating information pertaining to the City and the District and (b) notice of the occurrence of certain specified events, if material. A summary of the Continuing Disclosure Agreement is contained in APPENDIX C. CERTAIN RELATIONSHIPS The Stolar Partnership represents the District and the Developer in connection with the Bonds and the Redevelopment Project and represents both the District and the Developer (and entities related to the Developer) on an on-going basis in other matters referred to it

44 UNDERWRITING The Bonds are being purchased from the City by A.G. Edwards & Sons, Inc., as Underwriter, pursuant to a Bond Purchase Agreement between the City and the Underwriter. The Underwriter has agreed to purchase the Bonds at an aggregate purchase price of $19,521, (which is equal to the principal amount of the Bonds less an Underwriter s discount of $351, and less original issue discount of $226,836.95), plus accrued interest, if any, from the date of the Bonds to the date of payment and delivery. The Bond Purchase Agreement provides that the Underwriter shall purchase all of the Bonds if any are purchased, and that the obligation to make such purchase is subject to certain terms and conditions set forth in the Bond Purchase Agreement, the approval of certain legal matters by counsel and certain other conditions. The City has agreed in the Bond Purchase Agreement to indemnify the Underwriter for certain liabilities, including certain liabilities under federal and state securities laws, to the extent permitted by applicable law. The Underwriter intends to offer the Bonds to the public initially at the offering prices set forth on the inside cover page of this Official Statement, which may subsequently change without any requirement of prior notice. The Underwriter reserves the right to join with dealers and other underwriters in offering the Bonds to the public. The Underwriter may offer and sell Bonds to certain dealers (including dealers depositing Bonds into investment trusts) at prices lower than the public offering prices. MISCELLANEOUS The references herein to the TIF Act, the TDD Act, the Indenture, the Redevelopment Plan, the Redevelopment Agreement, and the Cooperation Agreement are brief outlines of certain provisions of such documents and do not purport to be complete. Reference is made to the TIF Act, the TDD Act and such documents for full and complete statements of their provisions. Copies of such documents are on file at the offices of the Underwriter and the City Clerk (see the section herein captioned INTRODUCTION Definitions, Summaries of Documents and Additional Information ) and following delivery of the Bonds will be on file at the office of the Trustee. The agreements of the City with the owners of the Bonds are fully set forth in the Indenture, and neither any advertisement of the Bonds nor this Official Statement is to be construed as constituting a contract or agreement between the City, the Trustee, the Underwriter or the purchaser or Owners of any Bonds with the purchasers of the Bonds. Any statement made in this Official Statement involving matters of opinion or of estimates, whether or not expressly so stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the information presented herein since the date hereof

45 The execution, delivery and use of this Official Statement have been authorized by the City. CITY OF BALLWIN, MISSOURI By: /s/ Robert E. Jones Mayor

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47 APPENDIX A INFORMATION REGARDING THE CITY OF BALLWIN

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49 INFORMATION REGARDING THE CITY OF BALLWIN The Bonds are not a general obligation of the City and are payable solely from the revenues described in this Official Statement. The following general information regarding the City has been furnished by the City in order to provide relevant demographic information regarding the area in and around Sub-Area 2A and should not be construed as an indication that the Bonds are payable from any source other than such revenues described in this Official Statement. See SECURITY AND SOURCES OF PAYMENT FOR THE BONDS and THE REDEVELOPMENT PROJECT in this Official Statement. General ORGANIZATION AND GOVERNMENT The City of Ballwin (the City ) is a political subdivision and a fourth-class city of the State. The City is located in St. Louis County, Missouri, approximately 20 miles from downtown St. Louis. The City has a population of approximately 32,000. Over 300 businesses are located in the City. Government The City was incorporated as a fourth-class city in The City operates under the Mayor-Board of Aldermen-City Administrator form of government, and is divided into four wards served by two aldermen per ward who are elected in alternating years for two-year terms. The Mayor is elected at large for a four-year term. The City Clerk and the City Administrator are appointed by the Board of Aldermen. The current Mayor is Robert E. Jones, first elected as Mayor in The current members of the Board of Aldermen, elected for staggered two-year terms, are: Name Date of Initial Election Term Expires Bruce Anderson April 2002 April 2004 Kenneth W. Buermann April 1995 April 2003 Kay L. Easter April 1994 April 2004 Charley Gatton April 2002 April 2004 Ray Lembke April 2002 April 2003 Press McDowell April 2001 April 2003 James Robinson April 1999 April 2003 Jane Suozzi April 1996 April 2004 The City Administrator is the chief administrative official of the City and has general supervisory control over the administration and management of government business and the officers and employees of the City, subject to the direction and supervision of the Mayor. The Board of Aldermen sets policies, rules and regulations and fixes the annual budget. City Officials Robert Kuntz, City Administrator. Mr. Kuntz has been the City Administrator since Prior to coming to the City, Mr. Kuntz was employed by the City of Trotwood, Ohio, for 10 years in various capacities. He is active in the International City Management Association, Missouri City Manager s Association, St. Louis County Managers Association, Lafayette Area Mayor s Organization, Missouri Municipal League and the West County Chamber of Commerce. A - 1

50 Mr. Kuntz received his bachelor of arts degree in political science from Miami University in Oxford, Ohio. He received his master of public administration degree from the University of Dayton in Dayton, Ohio. Glenda Loehr, Finance Director. Ms. Loehr joined the City of Ballwin in 1985 as an Accounting Clerk, was promoted to Senior Accounting Clerk, Assistant Finance Director and then Finance Director in June Prior to joining the City, Ms. Loehr held various positions in accounting. She attended Northeast Missouri State University in Kirksville (now Truman State). Thomas Aiken, Assistant City Administrator/City Clerk/Planner. Mr. Aiken joined the City in 1979 as City Planner and became Assistant City Manager in Prior to joining the City, Mr. Aiken was in private industry. He received his bachelor of arts degree in sociology from Illinois State University in Normal, Illinois, and has attended Southern Illinois University at Edwardsville in the masters program of city and regional planning. Employees and Employee Relations The City currently employs 154 full-time employees, 90 part-time employees and 46 part-time seasonal employees. All employees of the City are at will employees. Under Missouri law, employees do not have the authority to bargain collectively. The State is a meet and confer state whereby public employers have the duty to meet and confer with public employees but do not have a duty to reach an agreement. The City has had no work stoppages or significant employee disputes since its incorporation in Municipal Services The City provides its residents with a full range of municipal services. These services include administrative, judicial, and police services, as well as planning and public works. The City Administrator is selected by and serves at the pleasure of the Mayor and Board of Aldermen. He supervises the day-to-day operations of the City and is ultimately responsible for City employment and preparation of the City s annual budget. He also directly supervises the Chief of Police, Director of Administration/City Clerk, Director of Public Works, Director of Parks and the Finance Director. The Finance Department is responsible for the City s financial and accounting functions, budget preparation and monitoring, cash management and investment, purchasing and licensing of businesses within the City. The Administration Department oversees the Information Systems Division, which is responsible for the development, installation and maintenance of office automation systems. The Police Department oversees the Municipal Court, which is the judicial branch of City government. Traffic violations and other City ordinance violations are tried in Municipal Court. The Police Department consists of 55 commissioned officers and 2 reserves. The Police Department provides comprehensive law enforcement and prevention services 24 hours a day. The Police Department participates in a county-wide task force focusing on narcotics offenders and an area-wide major case squad to provide rapid response of investigative personnel at major crime scenes. Utilities Storm water and sewage collection and disposal facilities for the City are operated by The Metropolitan St. Louis Sewer District, a separate taxing authority that is financed by ad valorem taxes and user fees. The City s electrical service is supplied by AmerenUE and water is supplied by Missouri-American Water Company. Fire protection and emergency medical services in the City are provided by the Chesterfield Fire Protection District, West County Fire Protection District and Metro-West Fire Protection District, which are independent of the City and have their own elected officials, administrators and budget. The fire districts are empowered to levy taxes, separate and distinct from those levied by the City, sufficient to finance their operations. A - 2

51 Educational Institutions and Facilities The City is served by the Rockwood School District and the Parkway School District. These districts are independent of the City and have their own officials, budgets, administrators and taxing powers. In addition, several post-secondary educational institutions are located in the area surrounding the City. These include both public and private colleges and universities such as St. Louis Community College, University of Missouri-St. Louis, Washington University, St. Louis University, Maryville University and Webster University. Housing The City s residents dwell in some of the St. Louis area s finest single-family homes, apartments, and condominiums. Residential resales range from $120,000 to well over $350,000. New homes range from $200,000 to more than $500,000. Recreation and Cultural The City operates five parks with lakes, tennis courts, game fields and other amenities. The City offers a 9-hole golf course, a state of the art community center with a double gymnasium, leisure pool, fitness center and other facilities and an outdoor community swimming pool. Transportation The City s geographic location provides easy access to all areas of metropolitan St. Louis via Interstates 270, 64 and 44. A railroad station is located less than 10 miles from Ballwin in Kirkwood, Missouri. Charter and commercial air service is available at the Spirit of St. Louis Airport, which is the second busiest airport of its kind in its FAA region (Missouri, Iowa, Kansas and Nebraska). Regularly scheduled air passenger and freight service is available at Lambert-St. Louis International Airport located approximately 20 miles northeast of the City. [Remainder of page intentionally left blank] A - 3

52 ECONOMIC AND DEMOGRAPHIC DATA Population According to the U.S. Census Bureau, 31,283 people resided in the City in However, the current population is over 32,000 and growing. Age Distribution The following tables indicate the percentages of population of the City, County and State by age categories based on the 2000 census. Population Age Distribution City of Ballwin Age Number Percentage Under 20 9, % years 1, % years 9, % years 7, % Over 65 years 3, % Total 31,283 Source: U.S. Census Bureau, 2000 Census. Population Age Distribution St. Louis County Age Number Percentage Under , % years 57, % years 440, % years 92, % Over 65 years 143, % Total 1,016,315 Source: U.S. Census Bureau, 2000 Census. Population Age Distribution - Missouri Age Number Percentage Under 20 1,594, % years 369, % years 1,626, % years 1,249, % Over 65 years 755, % Total 5,595,211 Source: U.S. Census Bureau, 2000 Census. A - 4

53 Major Employers and Retailers There are over 300 businesses in the City, employing approximately 5,500 people. The City s proximity to other industrial, commercial, residential and educational centers within the St. Louis metropolitan area facilitates cross-over employment patterns for residents of the area. Olde Towne Plaza is providing some of Ballwin s top employers in Listed below are the top ten employers within the City s geographical boundaries in Company Product/Service No. of Employees 1) Target Retail Store 206 2) Schnucks Retail Supermarket 183 3) Value City Retail Store 125 4) Meadowbrook Country Club Country Club & Golf Course 125 5) Elco Chevrolet Automobile Sales 118 6) Archway Pool Management Swim Pool Management 111 7) Applebee s Neighborhood Grill Restaurant/Bar 90 8) Longhorn Steakhouse Restaurant/Bar 65 9) McDonald s Fast Food Restaurant 60 10) Dean Team of Ballwin Automobile Sales 52 Source: City of Ballwin. The following chart lists the current top ten businesses in the City based upon square footage. Retailer Type of Business Square Footage 1) Lowe s Home Centers Inc. Retail Hardware Store 135,197 2) Target Stores Retail Store 131,862 3) Value City Department Stores Retail Store 81,440 4) Schnucks Markets Inc. Retail Supermarket 61,783 5) Meadowbrook Country Club Country Club & Golf Course 57,140 6) Bed Bath and Beyond Retail Store 43,000 7) Plunkett Furniture Co. of MO Retail Furniture Store 40,000 8) Rothman Furniture Stores Inc. Retail Furniture Store 38,800 9) Ultimate Electronics Retail Electronics Store 33,500 10) Stein Mart Inc. Retail Store 31,000 Source: City of Ballwin. Unemployment The following table sets forth unemployment figures for the City, St. Louis County, the State of Missouri and the United States City of Ballwin 1.7% 1.5% 1.6% 1.4% 1.4% 1.9% St. Louis County State of Missouri United States Source: Missouri Division of Economic Development. A - 5

54 Economic Condition and Outlook The City s economy continues to grow. In addition to the Redevelopment Project (see the section in the text of this Official Statement captioned THE REDEVELOPMENT PROJECT ) several additional development and construction projects have recently been or will be completed in the City. Since the beginning of 2000, the City has continued to experience growth in both the residential and commercial sectors of the community. In this time, the City has approved the creation of 22 additional single family residential dwelling units and over 50,000 square feet of additional commercial floor area. This is in excess of the approximately 283,000 square feet of commercial floor area that were built in the Redevelopment Project. Retail Sales The following table sets forth the estimated annual taxable retail sales in the City for the last five years (exclusive of certain areas annexed in 1997 which are not a source of the City s distribution from the St. Louis County 1% sales tax). Year Retail Sales Source: City of Ballwin $399,844, $414,690, $434,473, $458,026, $462,686,194 Building Permits The following table sets forth the number of building permits issued in the City in the last five years. New Construction Additions/Alternations Year Number of Permits Value of Construction Number of Permits Value of Construction $10,940, $4,681, ,378, ,455, ,396, ,975, ,652, ,040, ,744, ,513,952 Source: City of Ballwin. Tax Rates There is no real property tax levied by the City. A - 6

55 Net Assessed Valuation for the City Real Property Personal Property Railroad and Utilities Assessed Value 1 % Increase $253,777,410 $55,270,519 $7,993,381 $317,041, % 1998 $257,765,450 $56,574,449 $8,005,107 $322,345, $277,516,330 $60,013,778 $6,992,580 $344,522, $328,074,050 $72,353,119 $7,649,420 $408,076, $365,570,490 $80,476,858 $9,242,108 $455,289, Assessments are determined by the Assessor of St. Louis County. Property is assessed as of January 1. Assessments are based on a percentage of estimated actual values. Real property is classified as residential, agricultural or commercial. Residential property is assessed at 19%, agricultural is assessed at 12% and commercial is assessed at 32%. All railroad and utilities property is assessed at 32%. All personal property is assessed at 33-1/3%. Real property is reassessed biannually in odd-numbered years. Source: St. Louis County Collector and City of Ballwin. * * * A - 7

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