Developer: Town Plaza CID falling far short of revenue expectations

The tax-funded Town Plaza Community Improvement District in Cape Girardeau has proved a poorer investment than the developer had hoped.

Greater Missouri Builders, based in St. Charles, Missouri, owns the Town Plaza shopping center. The company spent about $3.5 million fixing the former Sears building for use as a call center.

But in 2013, about six years after National Asset Recovery Services, or NARS, opened it doors, the call center closed.

The move made it harder for Greater Missouri Builders to recover its renovation costs, said Paul "Scott" Campbell, president of the development company and vice chairman of the Town Plaza taxing district, or CID board.

"It was a noble effort by everyone. It just didn't pan out in this case," Campbell said Tuesday.

The formation of the CID allowed a sales and use tax to be levied within the district, with the revenue designed to help the developer recover costs associated with renovating the expansive building for the call center.

The Town Plaza CID has received more than $1 million in sales-tax revenue from the creation of the tax from 2008 through 2015, according to the Missouri Department of Revenue.

The call center did not pay any sales tax, but the rent it paid -- about $12 to $13 per square foot -- provided additional money to aid the developer in recovering some of the construction costs, Campbell said.

When the call center moved out, Greater Missouri Builders saw a drop in revenue, he said.

The shopping center has lost other tenants, including Tuesday Morning. The retail store has moved to a site on Siemers Drive. The center's cinema closed years ago and remains vacant.

Campbell said the loss of tenants has added to the financial challenge. He has sought to interest other call-center companies to move into the former NARS facility.

But Campbell said the space is too large for other call centers.

"Other call centers just want desks and computers. It is basically just a white elephant as a call center," he said.

He said he is working to find new tenants for the shopping complex. Adding retail stores would increase the CID sales-tax revenue, which would improve the chance to recover their investment, Campbell said.

The Town Plaza CID is the first such taxing district used by Greater Missouri Builders. Campbell said his company likely wouldn't be a part of such a venture in the future.

The financial arrangement involved the issuance of a revenue note, which meant CID tax money was earmarked to "essentially pay yourself back," he explained.

But Campbell said the tax revenue is not even paying the interest on the note. Unlike bonds, revenue notes can't be sold to a third-party investor, he said.

Creation of a CID for the Town Plaza renovation project was suggested by local economic development officials, Campbell said.

Projections provided to the developer indicated it would pay off, he added. But that has not happened, Campbell said.

Still, he said the tax has provided some revenue that would not have been available otherwise.

Dan Barnard, who chairs the CID board of directors that manages the taxing district, previously led the Greater Missouri Builders.

But Campbell said Barnard now is leading a real-estate company and has indicated he would like to step down from the board.

mbliss@semissourian.com

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