Developer wants incentive deal

A developer rehabilitating the old Sears building in Town Plaza wants $2 million to $2.5 million in redevelopment incentives to cover the cost of improving the building for a call center that is expected to bring 400 jobs to Cape Girardeau.

The Cape Girardeau City Council voted Tuesday to set a March 5 public hearing on the issue.

Kent Evans, vice president of Greater Missouri Builders, the developer that owns Town Plaza, and company attorney James Mello addressed the council for more than an hour during its 5 p.m. study session. Evans acknowledged his company does not have much bargaining power with the council because National Asset Recovery Services signed a lease two months ago, but he asked council members to envision the added benefit to Town Plaza brought by the tax breaks.

"We're betting that this is going to help it turn the corner," Evans said. In addition to improving the 40,000 square feet where NARS will move in, the plan would help GMB create an additional 25,000 square feet of retail space.

GMB says it has a $4 million "gap" between what it will recover from NARS and others in rent and the cost of upgrading the 65,000-square-foot building.

To make up the difference, GMB is proposing three financing mechanisms.

The first would designate Town Plaza a "Community Improvement District." This would allow the city to increase sales tax on businesses in the district by up to 1 percent. The resulting money, estimated at $1.5 million, would go toward rehabilitating the new NARS building and other district improvements. The city council must vote to endorse the plan, but merchants in Town Plaza are forced to abide by the decision and cannot directly influence the proceedings.

"Their vote will be whether they choose to renew their lease or not," said Evans, who added he's optimistic stores and restaurants would benefit from the move.

In addition to the CID status, the developer is asking the city to approve its use of a Chapter 353 tax abatement. That would freeze the developer's payment of property tax at its current rate for 10 years. After that time, GMB would pay only 50 percent of what it would otherwise pay in property tax on improvements to the property.

This means GMB would not be fully taxed for 25 years on the significant improvements it plans to make to the building.

GMB is also asking the city for 50 percent of any newly generated sales tax money aside from the 1 percent increase in the 16.4-acre CID district.

In total, GMB expects to recover as much as $2.5 million from the incentives over the next 25 years.

'In the neighborhood'

Representatives say this is only a portion of what it will cost to upgrade the building and the district.

"It doesn't get us to where we need to be, but it does get us to what I would call in the neighborhood," Mello said.

Evans said though he does not have any real bargaining power with council, he was given assurances by city leaders prior to signing the lease with NARS that the council would be responsive to his needs.

"We received assurances that everybody would do their utmost and that they understood the gap, but basically we've walked out on a plank at this point," he said in an interview.

Mayor Jay Knudtson believes the move will have a domino effect on Town Plaza.

"I'm going to ask people to squint their eyes just a little bit and have a vision of what Town Plaza could become," he said.

Evans said the overall economic impact of bringing NARS to Cape Girardeau will be as high as $15 million. He said workers at the call center, which will operate 20 hours per day, will likely eat and shop in Town Plaza.

He said Town Plaza lies at the heart of the city and the measure will help revitalize it. He was convinced to accept the NARS offer because after Sears left more than a year ago, he was worried other tenants would soon follow.

"Even though it looks like the center is full, we've only gone through a year and a half without Sears. So we don't know if all these tenants are going to renew their leases, we don't know if there will be a domino effect," he said.

tgreaney@semissourian.com

335-6611, extension 245