Cape mayor says plan wasn't last-minute

Supporters of the proposal to use tax incentives for much of the renovation of the NARS call center in Cape Girardeau say this week's unveiling of the plan is not a case of asking for money late in the game.

"If it has the appearance of being something occurring after the fact, that couldn't be farther from the truth," said Cape Girardeau Mayor Jay Knudtson. "They just let this project out for bid four weeks ago. So there was not even a range of numbers to deal with. This isn't unusual at all for something like this to evolve this way."

The call center for National Asset Recovery Service will be in the 40-year-old Sears building in Cape Girardeau's Town Plaza. The plan also calls for 25,000 square feet of retail space to be added.

At Tuesday's city council study session, Kent Evans of Greater Missouri Builders, which owns the Town Plaza, and company attorney James Mello laid out a plan that could collect as much as $2.5 million for the improvements. The center will bring between 400 and 500 jobs to the area.

The plan asks the city council to approve Town Plaza's designation as a "Community Improvement District," allowing the city to increase the sales tax on businesses in the district by up to 1 percent. This money, estimated at $1.5 million, would then go toward the NARS building and other improvements approved by a district board.

Other money would come from separate tax breaks including a Chapter 353 tax abatement. That tax status would allow GMB to freeze its property tax at the current rate for 10 years. After that, GMB would pay only half of the tax on the increased value of the property for another 15 years.

GMB did not release an estimate of the total cost of renovation work but said there is a $4 million gap between what it will recover from its lease agreement with NARS and the improvements it proposes to the building.

Both Knudtson and Evans said there was a "handshake" agreement last fall between the city leaders and the builder to pursue available tax incentives.

"It was nothing more than a handshake. They can't promise anything, but they can promise to work on it," Evans said.

Knudtson said the city council and staff were aware incentives were part of the NARS recruitment effort from the beginning. GMB "trusted that we were going to look at these incentives. With the negotiations that take place as mayor, I sometimes have to make decisions that I am hopeful I can get a council to come on board with. In my opinion, if you look at all the projects done with public assistance I don't think you could have a better example of an area that could be helped through public assistance than this one," Knudtson said.

Evans agrees. He said the two-block area around the NARS building now has about 200,000 square feet of vacant building space. The current project, he said, has the potential to bring the area back or solidify its decline.

"It's like the broken window effect. This could just be another vacant building right there at a prominent corner. We could take the other options where we take the easy road out and lease it to lower-end third- or fourth-tier tenants and just say we'll let somebody else work on fixing the overall problem," he said.

Evans said NARS will bring an influx of $15 million per year to the area. He declined to say how long NARS' lease at the building is or whether the company has the ability to opt out if improvements are not to its liking.

Town Plaza retailers had mixed reactions to the plan, which could force them to raise taxes on customers.

Lynn Shipman, assistant manager at Hastings, said improvements are needed to keep the Town Plaza afloat. "I'm really looking forward to seeing this place shape up. Something needs to be done if they want to keep stores in here," she said.

Shipman said Hastings and other stores have leases that expire in 2007 and thinks improvements are needed to keep some from leaving. She doubts most customers will notice the added tax, which would be no more than $1 for every $100 spent.

Penny Johns, owner of Guy's Big and Tall, worried about losing customers. "I don't think anybody's ever happy to see an increase on their taxes. And it sounds to me that it's only going to benefit the landlord," she said.

Another player with interest in the proposal is the Cape Girardeau School District. Knudtson said rough estimates indicate the tax breaks will cost the school district between $20,000 and $65,000 dollars annually.

Knudtson and other city officials will appear before the board of education at 5 p.m. Monday to discuss the proposal.

tgreaney@semissourian.com

335-6611, extension 245