image
|
|
|
|
|
|
|
Phone: (314) 843-0102
|
Fax: (314) 843-0508
|
flag image

Sunset Hills amends pact with Novus; OKs TIF notes


ad
click to see advertisement
August 24, 2005 - The Sunset Hills Board of Aldermen on Saturday approved ordinances amending a redevelopment agreement with the developer of a proposed shopping center and authorizing the issuance of $22.5 million in tax-increment financing notes.

Aldermen voted unanimously to approve the two ordinances during the standing-room-only emergency meeting. Three aldermen were absent — Michael Sawicki of Ward 1 and Jan Hoff-mann and Robert Brockhaus, both of Ward 3.

The Board of Aldermen in May approved the Novus Develop-ment Co.'s request for $42 million in tax-increment-financing, or TIF, to help fund the $165.2 million shopping center at Interstate 44, Watson Road and South Lindbergh Boulevard. The pact with Novus also includes $20 million in transportation development district, or TDD, reimbursements.

The project will raze 254 homes and several businesses. Only the Hampton Inn and Denny's restaurant will remain.

Two days before Saturday's meeting, Novus learned its lender had withdrawn its funding for the development and the board's action will aid Novus in obtaining funding from a new lender. In a news release issued Saturday, Novus Presi-dent Jonathan Browne stated that the company will delay closings on its purchases of homes in the Sunset Manor subdivision until a new lender is secured.

Closings on more than 200 homes were scheduled to begin Monday. The Board of Aldermen last month authorized the use of eminent domain to acquire those properties Novus does not have under contract.

During Saturday's meeting, Mayor Jim Hobbs said Novus had 92 percent of the properties in the redevelopment area under contract and that Novus would be able to use the TIF notes as collateral to obtain funding from a new lender.

In the release, Browne stated, "Our lender informed us two days ago that it has withdrawn its financing for the development, which is necessary for the home purchases. They cited the existence of lawsuits against the city of Sunset Hills regarding the project, which we know to be funded and orchestrated by Westfield America, as the primary reason they no longer want to finance the project.''

Two lawsuits have been filed against the city by opponents of Novus' proposal.

One lawsuit was filed by 11 Sunset Hills residents and seeks to have the city's Board of Aldermen consider initiative petitions to repeal two enabling ordinances for the project. If the board fails to repeal the ordinances, the suit seeks a public vote to repeal the enabling ordinances.

The second lawsuit was filed by Sunset Hills residents and commercial property owners along with Missouri Residential I, an affiliate of Westfield America Inc. The lawsuit contends the city violated the state's TIF statutes and the U.S. and Missouri constitutions in approving the TIF assistance and redevelopment agreement.

Saturday's meeting was a heated affair as those in favor of Novus' proposal clashed verbally with those opposed to it. Speakers who addressed the Board of Aldermen were cheered or booed, depending on their respective points of view.

Proponents and opponents were easy to identify based on the signs they were waving. "Westfield Ruins Lives,'' "Boycott Westfield,'' "Stop the Sunset Hills Land Grab,'' "Sunset Manor Wants Justice,'' "We're Ready to Go'' and "We Want Full Disclosure'' were among the sign captions.

Before aldermen voted on the ordinances, Bob Ballsrud of Gilmore & Bell, the city's bond counsel, discussed the ordinances.

"Neither one of these ordinances in any way whatsoever increased the amount of financing that the city has agreed to provide for this project,'' Ballsrud said. "All along, this financing has had two components — a $42 million component for tax-increment financing and a $20 million component that will be funded through a transportation development district, TDD, which is payable from a 1-cent sales tax that Novus would elect to impose only within the boundaries of its shopping center. And so neither one of these ordinances alter that arrangement whatsoever.''

The first ordinance amends the redevelopment agreement approved by Board of Aldermen on July 12, Ballsrud said.

"At that time, there were conditions established that must be met by Novus prior to the issuance of any notes and one of these conditions was that 100 percent of the property within the redevelopment area must be acquired before a single dollar of notes would be issued,'' he explained. "That has proven since July 12, because some of these properties are being ac-quired through condemnation, to create a dilemma for Novus in its dealings with lenders who would finance land acquisition. And so Novus has requested a change to the redevelopment agreement that would allow TIF notes to be issued in the amount of $22,500,000 upon the acquisition by Novus of not less than 67 percent — by square footage — of all the property in the redevelopment agreement ...

The $22.5 million is 75 percent of the $30 million approved in the redevelopment plan for extraordinary land acquisition costs, Ballsrud said.

"The second ordinance could have been adopted all the way back at your May or July meeting, authorizing the issuance of TIF notes. It does nothing more than simply set up a framework pursuant to a trust indenture that's been entered into between the city and UMB Bank, as trustee. It simply sets up the framework for the issuance of TIF notes,'' Ballsrud said. "The really controlling document has always been the redevelopment agreement because it is the redevelopment agreement that sets out the conditions for which those notes will be issued ...''

Two attorneys representing residents opposed to Novus' proposal addressed the board — Gerard Carmody and Paul Ferber.

"... Mr. Mayor and members of the board, Gerry and I, Mr. Carmody and I, suggested to you on the night that you passed the ordinances that in doing so you were creating utter chaos and that you would create utter chaos,'' Ferber said. "Gerry spoke very adequately and sufficiently with reference to the lack of financing. I am astounded, absolutely astounded, that nobody knew before yesterday or this morning that financing was not in place. You and Novus have let these people, even the people and I want to speak for them, even the people who have signed and want to go forward, they are now in utter, utter chaos and limbo ...''

Sunset Manor resident Jason Dugger, said he supported city officials and blamed outside influences for disrupting the closing process.

"I have full faith in you guys. I think that you've done a great job to this point. Thank you for your service. I know it's trying times, but finally the spirit of the deal with Novus is the same based on this amendment. I understand that. I'm an educated person and all this is, is a tactic to delay the process to get these people discouraged and get them out of the deal. That's just unacceptable. So all I've got to say is don't let the delay in this deal rip apart our lives,'' he said.

  • Pitch It & Forget It
Site Search


Weather
Type in your zip code and click "Go" to get your 7-day forecast.
Visit www.crh.noaa.gov