TIF Commission considers redevelopment plan in downtown Cape

Restaurants, retail stores and apartments could soon replace vacant buildings in the 400 block of Broadway in Cape Girardeau as part of a plan to redevelop several parcels of property between Broadway and Bellevue Street.

The plan, known as The Rialto Retail and Residential development, was presented Wednesday to the Cape Girardeau Tax Increment Financing (TIF) Commission,

The commission has scheduled a follow-up meeting to discuss the project June 3 and a public hearing June 24. The commission will then decide whether to recommend it to the Cape Girardeau City Council for its consideration and potential approval.

Properties in the plan area — bordered by Broadway to the south, North Middle Street to the west and Bellevue Street to the north — are owned by Rust Communications Inc., parent company of the Southeast Missourian.

The project calls for a complete renovation of vacant buildings at 418, 420 and 430 Broadway — collectively referred to in project plans as 430 Broadway — to accommodate two restaurants and two retail tenants on the first floor, six upscale apartment units on the second floor and tenant storage on a lower level. Potential tenants of the retail and restaurant spaces have not been named at this time.

At one time, 430 Broadway was the home of the Bulletin-Journal newspaper and Concord Publishing House. Before that, it was occupied by a Montgomery Ward store beginning in 1928, followed by Bartles Department Store, Rust & Martin, Craftsman Office Supplies and Advanced Business Systems.

Most recently, the building housed The United Way of Southeast Missouri and Horizon Screen Printing & Promotional Products. Parts of the building have been vacant for more than a decade and it has been completely unoccupied for at least two years.

In addition to the renovations and repurposing of 430 Broadway, the redevelopment plan includes:

• Removal of a structure at 222 N. Middle St.
• Addition of outdoor patio seating at 440 Broadway adjacent to The Bank of Missouri branch there, which will be used for outdoor seating by one of the restaurants at 430 Broadway.
• Renovation of the structure at 260 N. Middle St. to accommodate a behavioral and therapeutic services company.
• Addition of approximately 80 off-street parking spaces within the boundaries of the 1.73-acre redevelopment area.

According to documents presented to the TIF Commission, the project’s total cost will be just under $5 million. Rex Rust, managing member of The Rialto development project and co-president of Rust Communications, said work could begin this summer and be completed in early 2021.

A recent study by the Southeast Missouri Regional Planning and Economic Development Commission has determined the parcels in the project area are “blighted,” which qualifies the project for TIF development funding.

“The benefit of TIF is it facilitates the redevelopment of property that otherwise wouldn’t get developed,” said Cape Girardeau assistant city manager Molly Mehner. “TIF assistance allows the developer to capture incremental increase in property value that his investment creates and recoup some of this investment costs.”

The current assessed value of the five parcels within the redevelopment project is $195,460. Once the project is completed, the assessed value of those properties is expected to be $1,441,418.

“Typically, vacant properties bring down property values of surrounding properties, so not only do we get property redeveloped, which is good for that particular property, but it helps conserve or bring up the property values of the whole area,” Mehner said.

According to the project application, project developers would receive a maximum reimbursement of $2,962,500 to cover a portion of the development costs even though they would be eligible for a reimbursement amount of more than $3.2 million. Under the TIF plan, reimbursement would be made over a 23-year period only if and when retail sales are generated and incremental property taxes above the existing base property taxes are paid. Without property improvements, property taxes generated by the parcels will likely decline as the properties deteriorate, the assistant city manager said.

“You’re taking a property that’s hardly generating any property tax or sales tax and, once the developer’s reimbursement is satisfied, all of the taxing entities benefit from that increased assessed value,” she continued. “So the school district will get more than its getting now, the county will get more than its getting now and the city will get more than its getting now from a vacant property.”

The overall project takes its name from the Rialto Theatre, a cinema that operated at 420 Broadway from 1940 until the early 1980s. Rust Communications founder Gary Rust acquired the building in 1983, renaming it Concord Theater, and it was the home of live theater productions before it closed for good a few years later. The theater roof collapsed during a heavy rainstorm in June 2010, which led to demolition of the building’s auditorium.

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