Public hearing Wednesday to consider mall project

The next step for Cape Girardeau municipal officials considering a tax incentive package for a proposal to redevelop West Park Mall will occur in a few days.

A public hearing is set for 3:30 p.m. Wednesday at Osage Centre for the project put forth by River City Centre LLC.

The mall ownership group has outlined a $107 million project to redevelop the mall and surrounding out-parcels, hoping to use a combination of financial incentives from the city and county. The incentives include fee waivers from the city (valued at about $100,000), sales tax waivers for construction materials (estimated at $3 million) and tax increment financing (maximum potential of $18.2 million over 23 years). Developers noted they want to take advantage of not only the TIF incentives -- which allow a developer to recoup half of local increased property tax and sales tax revenue -- but also Community Improvement Districts and Transportation Development Districts. The TIF funds would not be available unless the project demonstrably grows tax bases and would result in the developers receiving 50% of increased tax revenues, with the other 50% going to the local taxing districts.

Al Spradling, chair of the city's TIF Commission, which is holding Wednesday's hearing, noted the mall incentives package would not take money away from the taxing bodies.

"it doesn't cost the city a penny in terms of revenue it would have to expend," he said. "What the City is getting is a piece of property back up in working order, where it can be used again, and then we get 50% of any increase in sales tax or 50% in any increase in appraised value of the real estate taxes."

Spradling said the hearing will hopefully answer any questions members of the public and/or commissioners have before the group decides whether to recommend the TIF portion of the proposal to the City Council, which will ultimately decide on the complete incentives package. He speculated that commissioners may not decide on their recommendation Wednesday but in the following days.

Spradling said municipal officials have approved a number of TIF proposals that have gone on to be successful. He pointed specifically to the Courtyard by Marriott hotel on Broadway, while noting that other projects -- such as the Sportsplex and Southeast Missouri State University's River Campus -- aren't TIF projects but are cooperative ventures in which the city approved financial incentives.

"Without those projects, we don't know where we would be," he said. "We certainly would not see new hotels going up. ... You see the benefits to the city, the county. They all get benefits from this."

Blight

A criterion for a TIF project requires the property in question meet "blight" conditions. Spradling said the mall itself appears to clear that bar.

"It's really gone into disrepair," he said. "It's really not in good shape."

However, he noted the redevelopment proposal includes most of the mall property, including parking lots.

"The parking, the drives, the lighting -- that is part of the blight? That's a legitimate question. Why all of the property as opposed to just the mall?" he questioned.

Lucas Haley, one of the property owners, said the mall's age and infrastructure are among the reasons the property meets the blight threshold.

Another criterion for TIF projects is a "but for" test, meaning the project would not happen without the incentives.

Haley said the project meets that criterion as well.

"We've crunched the numbers. We know what the tenants are willing to pay, and we know what it costs to build this project. It's not feasible, it's in the red, it's a money loser without an incentives package that includes the TIF. We are here sort of by necessity. If we could do this another way, we would do it, but this is the only way it happens," he noted.

'Cannibalization'

At the TIF Commission's most recent meeting, the group discussed the potential for a redeveloped mall property with additional retailers to "cannibalize" sales from already existing businesses, though such a concern is not among the criteria for a TIF project.

Haley contended a redeveloped retail-focused mall property would serve as a catalyst to drive economic growth.

"Cannibalization would assume that we do this project and not a single new consumer shows up in our market and spends not a single new dollar in Cape," he explained. "It's saying that the 'pie' stays the same size and we are just dividing it up among the existing people already here. We just flat out disagree with that approach. ... We think there are large parts of the market that haven't been served in recent years. We have retailers that want to be here that have done their own independent studies showing that this market will support a store, even with other people who are arguably in the same business -- 'We want to be here, and we are not coming just to take a slice of someone else's business.' We believe the whole pie can grow."

Haley said expanding consumer choices attracts more consumers.

"If you go to a thriving metropolitan community, you look at the amount of choices that consumers have to shop at -- consumer choice drives dollars, period," he said. "Our opinion, and I think this has been borne out by any other community that is our size and larger, the more choices there are, the more consumers come to your market. That seems pretty clear to us."

Regarding specific retailers lined up for a redeveloped West Park Mall, Haley said the developers can't release that information.

"Our job would be so much easier if we could tell you, 'Here is our tenant lineup, and here is who we have committed to come.' We have confidentiality clauses with every one of the tenants, and they have marketing programs of when and how they want to announce they are coming," he explained. "What we can tell you is we have listened to feedback from citizens of the area."