Thursday, April 22, 2010

Truman Corners to get New TIF Deal

By Seann McAnally

The developer for Truman Corners Shopping Center walked into the public hearing to prove that a struggling tax increment financing plan shouldn’t be taken away. But instead of losing the TIF, the developer walked out with the promise of a brand-new deal.

Some officials say it’s not just good news for the developer, but for Grandview as well. 


The Grandview Board of Aldermen on April 13 had a public hearing on the future of the Truman Corners tax increment financing plan. The developer – UMB Bank – was required to show cause why city officials should not void the 13 year-old TIF plan for Truman Corners, which has lost value and sales since the TIF began. The developer has also not completed the second phase of promised improvements to the shopping center.


The board voted 4-2 to renegotiate the TIF to give the developer more favorable terms. 


Aldermen Tony Prior, Steve Dennis, Annette Turnbaugh, and Joe Runions voted in favor of renegotiation. Aldermen Leonard Jones and Jim Crain voted to void the TIF plan. 


“We’re all frustrated by the lack of growth,” Dennis said. “We’re all tired of the promises. But we all want to hold out hope. Unfortunately we have to dangle these carrots for any potential suitors.” 


Joe Lauber, an attorney for the city, showed evidence that the TIF plan has failed.


He said the purpose of the TIF plan was originally to cure blight at the center – that is, to enhance its appearance and attract tenants.


 Despite some minor road work, few improvements have been made and the vacancy rate is higher at the shopping center.


“It’s still basically a sea of asphalt,” Lauber said. 


The developer has already been reimbursed some $2.8 million for initial improvements, primarily involving road work around the site. 


Lauber also showed proof that the owner of the shopping center has successfully appealed real estate assessments of the property’s value, lowering it by as much as $800,000.


“There’s nothing illegal about that, but it’s also true that doing so seems contradictory to the purpose of the TIF, and it has limited funds available to make improvements,” Lauber pointed out. 


What TIF money has come in over the years – less than $3 million – has mostly been from two completely separate TIF projects (Sam’s Club and Truman Farm Villas) that were attached to the project in 1997. Only 24% of the revenues from the TIF are from Truman Corners itself.


Major improvements to the shopping center were supposed to kick in when the developer found an anchor tenant for the old Montgomery Wards building. The deadline for that came and went in 2007. 


Attorney Bill Moore, with the King Hershey law firm, represented the developer. He blamed the economy and Grandview’s demographics for the shopping center’s decline. 


“Obviously there has been a glitch somewhere or we wouldn’t be here today,” Moore said. “We hope you will modify the TIF to make it more reasonable and flexible.” 


Moore said the city should change the TIF plan so that a “major anchor tenant” can be smaller than 150,000 square feet. He said there are only a few retailers of that size, such as Wal-Mart, Best Buy and Home Depot, and those retailers are already well represented in Lee’s Summit, Belton, and other neighboring communities. 


He said the TIF plan should be modified to allow the developers to seek a smaller retailer such as Burlington Coat Factory, Gordman’s, Marshalls, or other stores in the 25,000 to 50,000 square foot range. 


The current TIF plan doesn’t prevent the developer from pursuing such tenants, but it doesn’t allow the developer to reimburse the costs of improvements unless the Wards building is occupied by a 150,000 square foot tenant. 


He said if the current plan was voided, he hoped the board would be open to another TIF in the future, once a tenant could be secured. 


Carl LaSala, a commercial realtor who has been trying to find tenants for the property, said it’s not easy. 


“Grandview has been passed over,” he said. “Retailers have a herd mentality. They want to locate around other retailers.” 


LaSala said Wal-Mart wanted to occupy the old Montgomery Wards space, but Price Chopper has a clause in its lease that prevents any other stores that sell groceries from locating at Truman Corners. 


He said “retail follows rooftops,” so they tend to go to cities where new homes are being constructed. He noted that Wal-Mart was interested in the site, but that Price Chopper officials said they would move their store if Wal-Mart opened at Truman Corners. 


In the end, Alderman Dennis said, offering to renegotiate the TIF plan was a pragmatic decision, not an emotional one.


“We realize there hasn’t been much movement there, but I wouldn’t want to take a tool out of their hands,” Dennis said. 


Alderman Runions agreed. 


“Just negotiate it and see what we get,” he said. “If we don’t like it, we can reconvene and say no.” 


Crain said it would be difficult to modify the TIF plan without having a better idea of the specific clients the developer will try to attract. 


“We don’t know how to modify it, and I don’t think you do, either,” Crain told the developers. 


Mayor Bob Beckers said the board’s decision was preliminary, and that it would formalize the renegotiations within a few weeks. 


Dennis said that once the International House of Prayer campus is completed, retailers will be more likely to want to locate at Truman Corners. 


“All six of us up there (the aldermen) know that it’s still a very difficult economy, and that property is a real challenge to market,” he said. “But I honestly see better times ahead for Grandview. That’s not just political rhetoric. What we basically did was to buy ourselves some time.” 


Crain said he just wants people who live in Grandview to be able to shop here.


“They’re spending their money somewhere else,” he said. “They want to spend it here.”

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