Novus promises 'high-end' tenants for proposed Main Street at Sunset
February 02, 2005 - By SCOTT MILLER
A proposed $163.9 million development in Sunset Hills is straddling the fence be-tween becoming a sales-tax boon or "a real problem," depending on the retailers that set up shop.
The Sunset Hills Tax-Increment Finance Commission met for the second time last week to ponder a request for $42 million in TIF assistance for the $163.9 million de-velopment on Watson Road and Interstate 44 near South Lindbergh Boulevard.
"Main Street at Sunset," as the Novus Development Co. calls it, would include "high-end" retail with restaurants, office space and "image" landscaping, according to company President John Browne.
With its proximity to the interstate and two major roads, Main Street at Sunset could attract high-end retailers unique to the area, said John Brancaglione, a city planning consultant from Peckham, Guy-ton, Albers & Viets.
But if existing businesses shift to the space, Sunset Hills will have exhausted consumers and depreciated an area with vast potential, he added.
"We don't doubt that (high-end) retailers are out there ...," Brancaglione said.
However, he added, "If you bring in something that could go further down on Watson Road, you've set up a real problem."
Browne said, "With this development's uniqueness it has the ability to pull (retailers and consumers) from the entire metro area ... This location meets all the qualities of those (high-end) tenants."
While names are not being released for confidentiality reasons, Browne insists roughly 80 percent of the proposed development has committed tenants, specifically high-end retailers.
Many haven't signed firm contracts, but have signed letters of intent, he said.
Brancaglione has seen the confidential list and is impressed with the number of commitments, particularly because "it is common for a developer not to have firm commitments at this stage of the process," he said.
Some also question whether the area can handle more retail, if consumers exist to support a high-end development and if the development would just strip revenue away from such neighboring cities as Crestwood.
"What about over-saturation?" asked commission member Pat Lanane, Lind-bergh School District chief financial officer and assistant superintendent for fi-nance. "How many commercial entities can we have in the Kirkwood, Watson corridor before we just run out of people without busing them in?"
Browne answered, "Today's retailers, particularly national retailers, it's a science of demographic study that determines their location. There is no such thing as build it and they will come. It is a very well thought out, substantiated need (for retailers)."
"But this is your feeling that there's no saturation as opposed to a market study," the assistant superintendent replied.
Browne said his high level of tenant commitment proves consumers exist for this development or the retailers wouldn't want to come. But he reminded Lanane that he couldn't divulge the names of those tenants because of confidentiality agreements.
Also, Novus still is negotiating contracts to buy out the area businesses to make way for the proposed TIF district.
Browne doesn't have contracts from any of them and commission member Bill Holland worried the proposed $42 million in TIF assistance may not be enough to offer those businesses a fair price for their property.
"That's a key constituency group," Hol-land said. "Those businesses have been here a long time and there is an impact to them ... That has to be taken into consideration."
Some homeowners of the Sunset Manor subdivision also haven't signed to sell their properties to Novus.
About 75 percent have though, and Browne has not ruled out requesting eminent domain if needed.
While Holland worries the TIF may not be large enough, Lanane worries it may be too large.
To obtain TIF assistance, Browne must demonstrate need based on extraordinary costs associated with the development.
Brancaglione said the proposed development area is not blighted, but does merit TIF assistance because of the age, deterioration and depreciation of the existing buildings as well as the inadequate utilities and a historical lack of growth and private enterprise at the site, among others.
So Browne wants TIF assistance for highway modification, utility relocation upgrades, demolition of existing structures, abatement of hazardous materials and land acquisition.
Under each of those categories and others, Browne would spend a portion of the TIF money if the project is approved.
Before approving any TIF project, Lanane wants Sunset Hills to cap the assistance given in each category so Novus couldn't shift finances from one category to another.
If costs exceed TIF support in that category, Novus Development would pay extra, not the city.
"I think what that would do is force a little more accountability," Lanane said.
"We'll make note of that as we go further down the road of this process," Brancaglione said.