TIF Commission recommends West Park Mall incentive

(Editor's note: This story has been updated to include ownership details of West Park Mall.)

After a two-hour public hearing about a proposal to redevelop West Park Mall, Cape Girardeau TIF commissioners overwhelmingly voted to recommend the TIF (tax increment financing) portion of the $104 million project to the City Council.

All but one commissioner voted in favor.

The TIF portion accounts for up to about $18 million in local property and sales tax incentives over the course of 23 years. TIF allows developers to retain 50% of increased property and sales tax revenue up to a capped amount, with the local taxing units receiving the other 50%, plus all of the predetermined baseline tax revenue. Once the TIF period ends or the maximum approved amount is reached, the tax units receive all of the tax revenue.

Mall owners, River City Centre LLC, a group of six area residents, are asking local taxing units for an incentive package that could amount to a bit more than $49 million, including the TIF portion. The package includes municipal fee waivers ($100,000), sales tax exemption for construction materials ($3 million) and tax benefits from a Community Improvement District and Transportation Development District.

Commission chairman Al Spradling explained at the outset of the meeting that the commission's role is to narrowly evaluate the TIF question. It is a matter for the City Council to determine other components, including whether to negotiate parameters of the TIF itself.

In discussion period before voting, commissioner Rob Gilligan, president and CEO of Cape Girardeau Area Chamber of Commerce, said he would have liked to see additional financial information about the project, but believes it meets the threshold for a TIF project — blighted property and that the project would not be feasible "but for" public incentives.

Further, he noted the city does not have well-developed rules and guidelines for such projects and encouraged municipal officials to work toward improving such guidance.

One commissioner, Adrienne Henry, voted against the resolution. After the group adjourned, Henry, noting she supports redevelopment at the site, said determining the entire mall property to be blighted could "open the floodgates" to many properties in the city being found as blighted.

More than 80 people attended the public hearing, and nearly 20 of them offered comments. Those comments were about equally split between supporters and opponents of the public incentives package, though nearly all noted their support for redeveloping the mall.

Supporters contended the project would spur economic activity by drawing more consumers to the city, employing construction workers over the six phases of the project and retaining and adding permanent workers to the redeveloped mall and additional retail outlets.

Steve Halter, president of Poplar Bluff (Missouri) Area Chamber of Commerce, pointed to a TIF project in that community he said has revitalized the area, including retail, educational, health care and municipal developments. He said retail sales in the city have increased 75% since the Eight Points development, which was a $123 million project with $35 million in TIF incentives.

Ally Ferrell of Cape Girardeau endorsed the plan.

"I love investing in my community and shopping locally when I can," she said. "It is so sad to drive by our own mall and see the parking lot empty — looking more desperate" as time moves on.

Ben Traxel, local developer, noted the TIF proposal would not take money away from the city.

"What a TIF really is, is a split of the profits," he explained. "With the new owner, there is a chance these tax proceeds will increase."

Opponents of the incentives package cited several reasons, ranging from what they termed a lack of due diligence on the commission's part to verify financial information provided by the developers to objections about the overall size of potential tax incentives.

Kevin Whitfield, president of Drury Southwest Inc., pointed to that company's developments that have been successful without any public incentives.

"We have proven that it's not necessarily needed in every instance," he said.

He also questioned the need for public financial help at the mall site.

"To approve, you must believe that 64 acres of prime real estate in Cape will never get developed," he told commissioners.

Scott Rhodes, owner of The Rhodes Group, called the tax incentives package "grotesque". He said developers have provided relatively little documentation of the project. He contended other TIF projects have included public benefit components, but this plan has not identified any.

"The public is getting nothing. They are getting a redevelopment project that is not owned by the public," he said.

Dan Drury, president of Midamerica Hotels Corp., contended the mall has fallen into disrepair because ownership over the years has not demanded regular investment in the way of "product improvement plans".

"The reason the mall has not stayed competitive is because of lack of investment," he said. "We need to see reinvestment from ownership because that's how it got here. That's not blight. That's lack of reinvestment."

He further challenged jobs projections and suggested once the redevelopment occurs the owners might "flip" the property to an owner or ownership group not based in the area, thus lowering the opportunity for local input on decisions about the property.

TIF commissioners are Spradling, vice chairwoman Marla Mills, secretary Jay Knudtson, Danny Essner, Gilligan, Henry, Neil Glass, Matt Welker, Charles Herbst, Roger Hudson and Katie Earnhart. Glass and Welker represent the public schools taxing district. Herbst and Hudson represent the county taxing district. Earnhart represents the public library taxing district. The remaining members are chosen by the City Council.

The issue now goes to the City Council.

River City Centre is a group of local real estate developers and strategic partners. The group is owned and managed by Lucas Haley, Michael Williams and Ben Ressel, with additional investment from Matthew Mills, Natalie Riley and Steve Holden, through trusts and affiliates. Combined, they have developed assets across 37 states with a portfolio that includes big box retail, grocery-anchored retail, triple-net retail, multi-family, hotels, health care, agriculture, renewable energy and historic rehabilitation. The group has extensive experience in large-scale developments and public-private partnerships, and are active investors in several early-stage companies, including multiple businesses based in Southeast Missouri.