Source: Call Newspapers

Centrum reduces request for economic assistance
‘We have busted our ass to come up with something unique ...,’ Barket says

by Kari Williams

November 14, 2012

Centrum Properties officials reduced the requested amount of public assistance for the redevelopment of Crestwood Court to keep the tax rate less than 10 percent for the proposed open-air entertainment and retail venue.

Sol Barket, of Centrum Properties, told the Board of Aldermen during a work session last week that Centrum listened to the board and community’s concerns about the proposed tax rate and reduced the request for both a community improvement district, or CID, and a transportation development district, or TDD, sales tax to 0.75 percent from 1 percent.

“We really took that comment to heart and we pulled that back,” Barket said.

With the reduction, the development’s sales-tax rate would range from 8.4 percent to 9.9 percent, Vic Pildes, also of Centrum Properties, told the board.

However, Barket said the requested amount for tax-increment financing, or TIF, was not reduced.

“I’m all for negotiation when I’ve over-asked,” Barket told the board. “We haven’t over-asked.”

Barket also said the board’s rejection of a resolution to select Centrum as the developer for the mall’s redevelopment came as a shock.

Centrum, the owner of Crestwood Court with Angelo, Gordon & Co., submitted the only development proposal, and was rejected as the developer with a 5-3 vote Oct. 9. The board voted 6-2 Oct. 23 to reconsider that resolution.

“I didn’t come in (to St. Louis) because I thought it was a formality,” Barket said. “I thought we were going to get approved ... The last hearing, when we got turned down, we lost one of our most important tenants, which was Toby Keith.”

Toby Keith’s Bar & Grill, according to Barket, made it “very clear” it would not be a part of the project, the District at Crestwood, unless a 2014 opening could be guaranteed.

“I’m making this point because, again, I’m not telling you, you should give us our TIF. I’m telling you if the development is going to happen, we need that TIF and we need every dollar of it,” Barket said.

However, he noted if aldermen believe Centrum is “putting money in our pocket that we don’t need,” the board should not approve the TIF.

“I am totally against giving people a handout, and I’m not asking for that,” Barket said. “... We have a plan after five years. We have busted our ass to come up with something unique, something that is viable, something that is conscious of the environment that doesn’t hurt your competition ...”

John Brancaglione, of Peckham Guyton Albers & Viets, the city’s planner for the redevelopment, said there is “no question” the redevelopment of the mall will need TIF assistance “at some level.”

“The number will be significant. Whether it’s the number that’s been requested at this point’s debatable,” he said.

Centrum’s original proposal called for the use of tax-increment financing and a 1-percent sales tax from a TDD and a CID. The economic assistance for the first phase originally totaled roughly $26.6 million.

The original concept presented in June was to be developed in two phases, with phase one, on the west side of the site, consisting of a cinema, a bowling concept and full-service and fast-casual restaurants. Macy’s would be the only remaining building from the existing site. The second phase, which was elaborated on last week, could include “prospective home-improvement tenants,” according to Pildes.

Brancaglione said PGAV would “feel a lot better” if “the recycling of the Macy’s building” on the west side of the development and the “big-box user that I have reason to believe would want to be on the other end” were constructed first, as opposed to the two-phase concept.

“The initiation of those things might also change the mix of who winds up being there,” he said.

The restaurants, to PGAV’s understanding, will be “heavily related” to the entertainment users to survive, according to Brancaglione.

“It’s not to say they can’t be there or wouldn’t be there,” he said, “but if we had two sort of significant things going on here, then we’d like that approach as opposed to a phase one, phase two that’s currently in (Centrum’s) proposal.”

The project is “just two separate phases,” according to Barket, and the previously stated second phase could occur before the first phase, though the leasing focus has been on phase one.

“We split it up because we have a plan that we know, without knowing specific tenants, is a really viable plan because it’s been proven ...,” Barket said.

But Brancaglione told the board because Centrum’s proposal “heavily emphasizes entertainment and restaurant uses,” it raised some questions.

“It’s a bit unusual and something for which there isn’t at least a direct model that we are aware of,” he said. “If there is one, we’d be more than willing to look into it.”

However, Barket said the District at Crestwood concept is being modeled after the Park at Rosemont in Chicago.

Ward 2 Alderman Bob Deutschmann reiterated the board’s concern about a bowling concept in the redevelopment with Crestwood Bowl near the mall site on Watson Road.

Barket said the bowling concept — more corporate and party driven — is “entirely different” from a traditional bowling alley and will not have leagues.

“I don’t think we will take one dime of revenue away from that facility down the street,” he said, “and you’re right to question these things and protect your existing people that have made their livelihood in Crestwood. We don’t want to hurt them.”

Ward 4 Alderman Dan Tennessen, who made the motion to reconsider the development agreement, said one concern that caused him “great reluctance” to vote “yes” initially the was the large restaurant focus.

However, Brancaglione said not to fixate on the restaurant aspect because “it’s only one piece of the overall pie.”

Mayor Jeff Schlink said there is concern that dollars may just move from one Crestwood establishment to another with the redevelopment, specifically citing grocery stores.

Some shifting will occur, according to Brancaglione, which is temporary.

“What happens is the nearest mainline grocers, the Schnucks, the Dierbergs, the Shop ’n Saves of the world take a 20-percent hit for a period of time, then it winds up settling back out,” he said. “So over a 12- to 18-month period, there’s some shift, but the balance usually settles in because there’s a certain amount of loyalty that plays into it.”

Brancaglione also said the development would bring people from outside Crestwood into the city.