Curse might be too strong a word, but following 2010, Springfieldians must be wondering how many more developers the Heer’s building can chew up and spit out before real estate professionals stop thinking of it as a viable project.
In 2010, St. Louis-based developer Kevin McGowan became the latest to scrap plans for redevelopment with no real progress made. He seemed to come the closest to making redevelopment of the historic downtown building, but ultimately, the outcome was the same for him as it was for Springfield’s Warren Davis and Columbia’s Vaughn Prost before him.
After three years of attempting to secure financing for his $29.3 million Heer’s Tower plan, McGowan said the risk outweighed the reward.
Despite claiming to have a deal in place with his loan company to meet the Nov. 30 deadline for an $11.8 million U.S. Department of Housing and Urban Development-insured loan to help redevelop the Heer’s building, McGowan said he made an 11th hour decision not to submit the application the weekend before it was due. His reasoning: the risk outweighed the reward.
McGowan’s term sheet laid out these funding sources and their terms for the $29.3 million project:
- $11.8 million HUD loan at 6.35 percent interest for 40 years;
- $5.2 million federal historic tax credit at 7.5 percent interest, not to exceed three years;
- $4.9 million state historic tax credit bridge loan at 7 percent interest for 18 months or until the project is complete;
- $4.4 million from the developer;
- $2 million city small business development loan at 5 percent for 23 years; and
- $1 million Missouri Development Finance Board loan through the city at 5 percent for 23 years.
McGowan’s plans for the eight-story, 150,000-square-foot building called for a Mike Shannon’s Steak & Seafood restaurant, bowling alley, indoor pool, fitness center and 61 apartments.
While he wouldn’t rule out a return to the Heer’s project, that won’t happen until the economy improves. “We’ll go back to the drawing board at some point,” McGowan said. “The economy’s got to change. Can it be done in this environment? I don’t know. We don’t have a next step.”
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