Answers to a Developer’s Questions

Have a center built in the 60’s and until two years ago the only game in town.  Lost one anchor last year and the other is threatening not to renew unless we make a lot of concessions.  Trouble is the revenues don’t justify a lot of investment at this time.

How is your relationship with the City? Have you looked into  some kind of public/private partnership? Like TIF or sales tax rebates? Sounds like you would be  doing a redevelopment of the existing center and a lot of the costs might be covered by TIF or sales tax sharing. Is there any reason the City might want to help out on this?

Well, yes there is.  Two years ago a brand new center came on line in a neighboring town and that center is stealing our sales.

That new center is also taking sales tax revenue away from the City and that’s a good reason to approach the City on helping out with your redevelopment project. Economic development is a good thing. If the City can help you revitalize your center and the locals return to shopping there the City wins and so do you.

I didn’t think you could get TIF for retail …What kind of costs do they pay for?

Well, you definitely can, what kind of costs do you think you will have?

We need to demolish some in-line so that we can expand the remaining anchor by tearing down a wall and pushing into the parking lot…so we have demo and re-surfacing and re-lighting the parking lot…all new hvac on the anchor…they want some green system to reduce costs and they have some national program to “green “ their stores. We have to do some new curb cuts and some work on the intersection, add a signal and turn lane, due to the anchor expanding into the parking lot. We want to clean up the interior mall common areas.

Well it sounds like a lot of those renovation costs may be eligible for redevelopment incentives but usually the City will say, “you front the costs and we will reimburse you from the new sales and real estate taxes the center generates.” Generally, especially in this economic climate, they won’t do a bond deal where they sell bonds to pay you up-front for the renovation. Still, it sounds like you might be able to work with the City and more costs will be covered because you are renovating an existing center rather than coming out of the ground with a new one.

How long does it take to arrange something like this?

Depends. For TIF, three to six months depending on the City and the political climate and you have to meet certain qualifying criteria under the statute but your center is more than 35 years old so that shouldn’t be a problem and there is a political process…public hearings.   For sales tax it is a much faster process.

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