'Blighted' Esquire a 'textbook' case for TIF, Mehner says at meeting

A proposal to renovate the vacant Esquire Theater in Cape Girardeau for use as a concert and event venue offers a "textbook example" of the type of project that warrants tax-increment financing, Cape Girardeau Chamber of Commerce president John Mehner said Thursday.

Mehner, who serves on Cape Girardeau's Tax-Increment Financing (TIF) Commission, offered his support at the first meeting of the commission in nearly three years.

The former movie theater at 824 Broadway has been vacant for decades, is generating barely more than $1,000 a year in property taxes and nothing in sales taxes, he said.

Restoring the building and transforming it into a viable business could generate sales tax revenue and increased property taxes, Mehner said. "This is a huge potential win," he said, adding the project would be funded largely with private investment.

The commission met at the Osage Centre to review a proposal by TAG (Together Always Giving) Development and Cape Theaters LLC.

The front of the auditorium in the old Esquire Theater.Fred Lynch

Developer Cara Naeger of Bloomsdale, Missouri, told the commission her development group plans to buy both the Esquire and the nearby, vacant Broadway Theatre. But the proposed project deals only with the Esquire Theater, she said.

"We will restore it," Naeger said, adding when the facility is renovated and expanded it will encompass about 8,800 square feet.

Naeger said the proposed $2.7 million project is not feasible without TIF assistance. "It is a high-risk project," she said.

The snack bar in the foyer of the old Esquire Theater is seen Thursday, May 24, 2018 in Cape Girardeau.Fred Lynch ~ Southeast Missourian

The building has deteriorated significantly over the years, she told commissioners.

The roof leaks. Rain "just pours into the building," Naeger said.

Marla Mills, executive director of the Old Town Cape downtown revitalization organization, said "historic theaters are some of the most expensive properties to rehab."

The structures can't readily be repurposed for non-theater uses, she told commissioners. "There aren't really a lot of other options."

Naeger said TIF financing would be crucial in securing a bank loan to fund the development.

Under the proposal, TIF funding would not exceed $565,000 plus interest and costs associated with issuing notes, bonds or other financial obligations.

A TIF, as spelled out in state law, allows a developer to receive the increment gained in property taxes between the current value and the improved value, and 50 percent of the sales tax revenue generated above the base year level for up to 23 years.

Attorney Mark Grimm, with the Gilmore and Bell law firm which specializes in public finance law, said TIF assistance could end sooner, depending on the project finances.

Grimm's law firm was hired by the city to conduct a cost-benefit analysis for the proposed TIF project. The analysis shows the project would increase tax revenue for the city, Cape Girardeau County and other taxing entities.

A study by the Southeast Missouri Regional Planning and Economic Development Commission found the project site to be "blighted," a key condition to securing a TIF designation. The study found the brick exterior of the building is crumbling, exterior doors are rusted, and windows are broken and/or boarded over.

Commission chairman Al Spradling III said without such a redevelopment project, the deteriorating Esquire Theater likely would have to be razed. The end result, he said, would be a vacant lot or a parking lot.

Under state law, the commission must hold a public hearing before making a final recommendation to the Cape Girardeau City Council. Commissioners set a public hearing for 5 p.m. July 19 at the Osage Centre.

The final decision about whether to grant TIF assistance for the project rests with the council.

mbliss@semissourian.com

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