Plaza Galleria may have a buyer

The long-vacant Plaza Galleria at 2001 Independence St. in Cape Girardeau may soon have a new owner.

Greater Missouri Builders has signed a purchase contract on the 6.85-acre property. The site has been on the market since May 2004. Mayor Jay Knudtson said the city asked GMB to buy the property during last year's negotiations that put National Asset Recovery Service in the old Sears building owned by GMB nearby.

The asking price on the building and its surrounding real estate is $2.2 million, but Tom Foote of GMB's commercial division said the final price will likely be "a little less than that." The contract does not force GMB to buy the property but gives it the option to do so if an interested tenant is found. That courting process can go on for months.

Foote said GMB will try to find a "big box" retail tenant for the property and will likely raze the 56,450-square-foot building.

"Basically, we have no interest in the building itself. Our interest is in the land. We would like to see that developed for either a big -ox store or possibly a couple of medium-box stores. Whoever it is will probably wind up tearing down the galleria," Foote said.

GMB already owns the adjoining Town Plaza shopping center and the former Sears building directly east. National Asset Recovery Service will move into the former Sears building in May. Knudtson said the deal was part of a handshake agreement with GMB last fall where the city agreed to do whatever it could to support tax credits for the redevelopment of the Sears building if GMB would try to buy the Plaza Galleria.

GMB is seeking two tax incentives to make up an estimated $4 million gap between the money they will recover from a lease agreement with NARS and the cost to rehabilitate the 40-year-old Sears building.

Knudtson thinks this type of tradeoff is good for Cape Girardeau.

"Frankly, I don't think there's anything immoral or unethical about that. Saying from the city's perspective we're willing to support the public improvement to support the Sears building, and I'm asking you to do whatever you can do to get the Plaza Galleria under contract, I don't see anything wrong with that at all," he said.

Knudtson stressed that none of the projected $1.5 million to be raised from the proposed Community Improvement District in the Town Plaza can be used for improvements at Plaza Galleria. "Those cash flows and paper trails are above reproach," he said. The district would require merchants to charge an additional 1 percent in sales tax to fund improvements.

Hoping to reverse a trend

The immediate area of the Town Plaza has about 100,000 square feet of vacant retail space. Both Knudtson and GMB officials hope NARS coupled with a Plaza Galleria tenant will reverse a long-term trend that has seen retailers migrate toward Route K and Interstate 55.

"Basically because of the location there is still a lot of traffic [on Independence and William streets]. For the majority of Cape's residents it is still easier to get to than going all the way to the other side of the interstate," Foote said.

Plaza Galleria, though, has steadily watched tenants leave since the 1980s. Kroger Family Center closed in 1984. The galleria's skating rink, which opened soon after Kroger left, shut down in 2003. The last tenant, Pockets, a pool hall and bar, closed in 2005.

Knudtson is optimistic GMB will succeed in recruiting a retailer where Lorimont Place Ltd., representing current owners C.R. and Betty Talbert, didn't. The Talberts have owned the property since 1983.

"Anytime you have the ability to negotiate directly with a landowner, that allows you to create some synergies there," the mayor said. "If the developer can directly contact the tenant and negotiate terms and take a look at what the proposal is as it pertains to the overall footprint of the land, that often allows for successful discussions."

Tom Kelsey, a broker with Lorimont Place who has shown the property in the past, declined to name retailers that have shown interest but said Lorimont has been active in marketing Plaza Galleria. He said he does not resent Knudtson or the city leadership deciding the property is more likely to sell under GMB ownership. "If somebody else feels they have a better inside track with anybody to get a contract, then that's great," he said. "I think we're in a situation where, in our market, we've got to all work together."

Foote said GMB is starting to send out letters and marketing brochures to hundreds of prospective tenants. He did not name possible tenants but said a sporting goods store, a specialty store or a "higher-end-type department store" are all possibilities.

Knudtson said any big-box retailer will require better access to both Independence Street and Kingshighway. He added, "It'll be a challenge, but my goodness, what a good challenge to have."

tgreaney@semissourian.com

335-6611, extension 245