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Novus still working to obtain financing


August 31, 2005 - By LAURA UHLMANSIEK

Staff Reporter

The Novus Development Co. announced last week that it will close on all contracts in Sunset Manor by Sept. 30, but company officials still are working to secure a loan to finance the contracts.

Novus' announcement may bring some relief to the property owners who are waiting to close on their homes, but residents told the Call that since Novus announced Aug. 18 that it lost its financial backing, tensions have been rising in the neighborhood. The proposed development has pitted the Westfield Corp. against Novus and has divided the neighborhood, residents told the Call.

"When the lender fell through, it put a dividing line between those who are against and those that were for," said Tina Dlugos, a resident of Sunset Manor who has signed a contract with Novus.

Novus officials say they learned Aug. 18 that their lender, Regions Bank, had withdrawn its funding for the development.

Closings on more than 200 homes were scheduled to begin last week and many residents who had signed contracts with Novus had to put their lives on hold. Many residents had already moved into another house or were in the middle of packing when they heard word from Novus that the company would have to delay closing on the homes until a new lender is secured.

The Sunset Hills Board of Aldermen voted at an emergency meeting Aug. 20 to approve ordinances amending the redevelopment agreement with Novus and authorizing the issuance of $22.5 million in tax-increment financing notes. The board's action will act as collateral on a loan and help Novus obtain funding from a new lender, said Craig Work-man, a spokesman for Novus.

Novus announced last week that property owners who already had signed contracts now must sign an extension agreement that states Novus will close on the properties no later than Sept. 30.

Novus also had agreed to pay property owners with contracts up to $1,000 to cover any additional financial costs, such as mortgage payments or interest on bridge loans, that were incurred by the property owner because of the contract extension.

Novus has turned the heat on Westfield, saying the two lawsuits against the city that Westfield is financing caused Regions Bank to pull out their financial support.

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 or submit it to the public for a vote.

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.

Novus and the May Department Stores Co. also announced Aug. 25 that a 160,000-square-foot Famous-Barr department store will be the development's first anchor tenant at MainStreet at Sunset. Because of the merger between May and Federated De-partment Stores Inc., Famous-Barr department stores will be converted to a Macy's beginning in fall 2006.

"By far the main significance is it's going to greatly benefit us in securing a new lender in the land acquisition part of the project ... And along with that it adds credibility with this development," Workman said.

The agreement would leave the West-field Shoppingtown Crestwood with one less anchor tenant.

"The lease for the Famous-Barr store ex-pires in two years (at Westfield), so the store will just be relocated at the Main-Street at Sunset at that time," said Sharon Bateman, spokeswoman for May Depart-ment Stores Co.

Westfield also made its own announcement Aug. 25 that will offer competition to the movie theater planned for Novus' development. Westfield and AMC Entertainment officials announced their plan to build a megaplex AMC Theater, which will be built at the front of the Westfield Shoppingtown Crestwood near Watson Road, according to a press release. The shopping center already includes a 10-screen AMC theater, but building a new theater is just the first step in a project that could make the shopping center more competitive with the proposed No-vus development down the street.

"The brand new, state-of-the-art theater is the beginning of a more comprehensive redevelopment and reinvestment designed to offer our customers the area's most ex-citing and convenient shopping, dining and entertainment destination," stated Tim Lowe, Westfield executive vice president of development, in the press release.

Westfield also is facing pressure from a group of residents who have signed contracts with Novus whose motto is "We're ready to go" and "Westfield ruins lives" and are organizing a boycott of Westfield Shoppingtown Crestwood.

"Our goal is to get Westfield Corp. to drop its lawsuits," Jason Dugger said, who created the Web site werereadytogo.com. "We see this as the factor that is holding this whole process from moving forward and for Novus to get the lender in to get financing done on our homes so they can exercise their options and we can move on."

The Board of Aldermen in May approved the company's request for $42 million in TIF assistance to help fund the $165.2 million shopping center at Interstate 44, Wat-son Road and South Lindbergh Boulevard. The board also approved giving Novus $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.

The Board of Aldermen in July authorized the use of eminent domain to acquire properties Novus did not have under contract. Workman said that 230 residential property owners have agreed to the buy out offer and 25 properties have not yet signed.

Of the 10 commercial properties in the buyout area, seven have not signed contracts with Novus, Workman said.

  • Pitch It & Forget It
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