Cape Girardeau officials approve portions of West Park Mall redevelopment; final action still to come

Cape Girardeau City Council members overwhelmingly supported most of a West Park Mall redevelopment plan at their meeting Monday, Oct. 2.

In a combination of final and initial action, the group endorsed River City Centre LLC's $104 million project to reconstruct the mall and develop several parcels around the 65-acre site's perimeter.

All of the votes were 5-1 in support of the measures, with Mayor Stacy Kinder and council members Shannon Truxel, Mark Bliss, Dan Presson and Nathan Thomas voting for the measures and Tameka Randle opposing.

The group took final action on three incentives for the project, approving a tax increment financing plan, Community Improvement District and Transportation Development District.

They read for the first time ordinances regarding a comprehensive development agreement and a measure to allow for the issuance of industrial revenue bonds for the project. Contained in those measures is another incentive, a waiver for sales taxes on $3 million in construction materials. Developers had also asked the city to waive municipal fees associated with the project, but such a waiver is not part of the agreement.

The TIF plan will allow developers to recoup up to $18 million in sales and property taxes over a specified time. Though the developers had asked for TIF reimbursement for the entire site, council members at a previous meeting voted to exclude four out-parcels from such reimbursement. That move did not change the amount of the possible TIF incentive but will restrict where the developers can use the funds.

CID will allow developers to receive proceeds from a 1% sales tax and $2-per-square-foot-of-leasable-space annual assessment and use those funds for the redevelopment. TDD will impose a 1% sales tax within the property boundaries to provide redevelopment funds.

Together, the incentives would be worth about $48 million in today's dollars (excluding financing costs).

Randle said she opposed the "unprecedented" incentives package. She contended the "corporate welfare" incentives won't achieve the goals of growing the city's tax base and could "suffocate" other businesses. She also contended developers of future projects will "line up at the doors" to seek such incentives.

"I'm not opposed to the mall but to the excessive incentives," she said.

Thomas countered that the mall has deteriorated in recent years with no turn-around in sight until the RCC proposal.

"We have 20 years worth of data on this property. We know where it is headed," he said. "What we can't do is, if I vote 'no' on this, it is a vote for a hope and a prayer that maybe somebody will reverse that trend of the past. I can't legislate on a hope and a prayer."

Bliss pointed to declining sales tax revenue at the mall as proof of its direction.

"Sales tax has declined over 40% in the last two years," he said. "If we do not do this, and the mall continues to decline, we will have less and less sales tax revenue."

John Hansen, a financial consultant representing RCC, outlined tax benefits to the city, protections against financial liability and ongoing oversight. He said the city could ultimately receive $1 million in annual increased tax revenue from the project and noted that only bondholders would have any risk associated with the industrial revenue bonds. He pointed to several municipal functions that will ensure proper accounting for all incentives-associated funds. Ultimately, he said the incentives amount to less than half of the potential investment.

"If we invest a dollar in the mall, we can earn up to 48 cents. If we earn $48 million, there would be $100 million invested in the mall," he said.

Kinder noted the owners' purchase of the mall for about $10 million and expected investment of $50 million in the project, proof, she said, of their "skin in the game".

RCC is a group of local real estate developers and strategic partners. It is owned and managed by Lucas Haley, Michael Williams and Ben Ressel, with additional investment from Matthew Mills, Natalie Riley and Steve Holden, through trusts and affiliates.