West Park mall developers ask Cape County industrial board to support bonds

The Cape Girardeau County Industrial Development Authority Board (IDA) tentatively approved the issuance of bonds to help finance the first phase of the West Park Mall redevelopment plan at their Tuesday, July 9 meeting.

The decision was made subject to review of a project financial analysis by the Raftelis consulting agency and a bond marketability study between investment banking firm Stifel and West Park Mall owners River City Centre LLC. It does not obligate the IDA to final action, but does allow RCC to proceed with Stifel and keep their schedule for the overall redevelopment project.

John Hansen, managing director of the Westwood, Kansas-based Integra Realty Resources (IRR), and River City Centre representative Lucas Haley presented the redevelopment project’s financing and vision to the IDA board during the meeting. After the presentation, the board queried them on various financial aspects of what the redevelopment would entail for more than an hour.

Hansen said the total investment in Phase 1, consisting of the east wing of the mall, would be $40 million, with $22 million of that in private capital and $18 million in estimated net bond proceeds. The bond finance team had been assembled, with the exception of an issuer, and Hansen asked that IDA act as the issuer for bonds.

If IDA ultimately supports issuing the bonds, neither they nor any other local entity would assume liability. All risk would be with the bond buyers themselves.

Raftelis was brought onboard as an expert third party to provide their opinion on what revenues would be likely for the first phase of mall redevelopment, Hansen said.

“Their job is to do the best job they can on predicting what those revenues are going to be. Raftelis has been engaged and they are currently working on a first draft of that bond revenue study,” he said.

The draft would be available in the coming weeks, he added. Raftelis had primarily been waiting on an issuer being named.

Hansen said the general bond structure envisioned would be for a tax increment and special district revenue bond. They would be pure revenue bonds only, with no issuer or city backstop or credit enhancement. He said they would have a par amount of no more than $30 million and estimated it would be $23 million, producing the $18 million in net fund proceeds.

These bonds would likely be tax exempt with fixed interest rates, marketed to accredited investors and qualified institutional buyers by Stifel, he added.

Bonds of this type might have one to two maturities, and every dollar of revenue would go to repay the bonds as quickly as possible, Haley said. He called them “super sinkers”.

River City Centre is a group consisting of Haley, Michael Williams and Ben Ressel, with Matthew Mills, Natalie Riley and Steve Holden providing additional investment. Haley said they all grew up patronizing West Park Mall. The group acquired the mall at auction in June 2021 with a total price tag of more than $9.9 million.

The IDA board’s seven members are appointed to six-year terms by the Cape Girardeau County Commission for the purpose of developing agricultural, commercial, industrial and manufacturing facilities in the county. Its current members are Adam Kidd, Kathy Bertrand, Rex Meyr, Kim Moore, Skip Smallwood, John Voss and Southeast Missourian publisher and Rust Communications president Jon K. Rust.