City Beat: Developers seek city incentives

Developers aiming to breath new life into old properties are seeking tax breaks to move along their plans.

At Springfield City Council’s Nov. 19 meeting, council considered tax abatement for the vacant former Solo Cup plant and historic Vandivort Center, while the $9 million redevelopment plan of the historic Landmark building was unanimously approved on second reading.

Shopping Solo
Warren Davis Properties is seeking $16 million in projected property tax abatement tied to the former Solo Cup plant and two adjacent buildings that comprise nearly 1.3 million square feet in central Springfield.

Through Solo Redevelopment Corp., property owner Davis Properties submitted a $36.6 million investment plan to attract tenants to the former Solo space and keep tenants at its adjacent properties.

Davis Properties is seeking a declaration of blight on the 80-acre site comprising the 735,000-square-foot former Solo Cup plant at 1100 N. Glenstone Ave., a 408,000-square-foot warehouse occupied by John Deere Reman at 2065 E. Pythian St., and a 230,000-square-foot warehouse occupied by Springfield Redevelopment Corp. at 1926 E. Chestnut Expressway.

Approval of the plan would grant 100 percent property tax abatement on improvements at the three facilities for 10 years, as well as 50 percent tax abatement on improvements for the following 15 years.

Springfield Economic Development Director Mary Lilly Smith said many blighted conditions could be found at the former plant site, a 48-year-old facility she described as functionally obsolete – one of the characteristics of blight. She said other blighted conditions include a gutted interior, broken windows, signs of vandalism and a parking lot overgrown with weeds.

Under state statutes, property owners who redevelop properties in blighted areas are eligible to receive tax abatement on improvements for up to 25 years.

Councilman Jeff Seifried said the former plant was a textbook case of a blighted property.

“If you ever need to see a good example of a blighted building, you ought to take a tour of this,” Seifried said.

In December 2011, council unanimously approved a resolution of intent to issue up to $65 million in Chapter 100 industrial revenue bonds for improvements to the plant-area properties and to subdivide the former Solo Cup building to make it more attractive to potential tenants. Patrick Harrington, the listing agent for Warren Davis, said at the time prospective tenants typically seek between 75,000 square feet and 250,000 square feet.

Missouri statutes allow local governments to issue bonds to finance industrial development projects. Once issued, the developer transfers property ownership to the local government, and the bond proceeds are then used to fund construction of the redevelopment. The developer buys the bonds and repays them during a set time period.  Once the bonds are repaid, the city would release the title back to the developer.

“All the bond structure does is provide property tax abatement. It doesn’t provide financing,” Smith said after the meeting. “The developer still has to go out and provide financing because he buys the bonds.”

Smith said the city has not yet issued the industrial revenue bonds for the Solo Cup site, and Davis Properties is first seeking Chapter 353 tax abatement. The Chapter 100 industrial revenue bonds would likely be issued for equipment improvements once Davis Properties has tenants in place, she said, noting the developer does not plan to seek at a later date revenue bonds for real property tax improvements.

The tax abatement, according to Smith, would give the developer incentive to move forward with improvements, including subdividing the Solo property into 16 to 20 units for office, warehouse or manufacturing use, ranging from 15,000 square feet to 420,000 square feet. The planned improvements, which are expected to take four to six years to complete, also include dock additions on the Chestnut Expressway building and the construction of a 6,000-square-foot office building.

In March 2011, Solo Cup ceased its Springfield operations that had employed 1,200 at its peak, according to Springfield Business Journal archives. In August 2010, two months after Solo announced plans to close its doors, Davis Properties purchased the building. Davis Properties officials could not be reached for comment by press time.

No members of the public addressed council on the redevelopment plan. The bill’s second reading and vote is expected at council’s Dec. 17 meeting.

Vandivort hotel
Through MBH LLC, brothers Billy and John McQueary are working to open a 45-room boutique hotel in the historic Vandivort Center. On Sept. 12, the McQuearys purchased the 44,000-square-foot office and theater property at 305 E. Walnut St. from downtown property owner Scott Tillman.

Smith said the developers want to transform the four-story building – constructed in 1906 as a Masonic Temple – with the help of property tax abatement and up to $10 million in industrial revenue bonds.

At the Nov. 19 meeting, council voted unanimously to approve a resolution of intent to issue the bonds to the McQuearys when needed.

In addition, the developers submitted a plan that requests tax abatements consistent with a blighted property. The request was for 100 percent tax abatement for 10 years and 50 percent for another 15 years on improvements to the building. Smith said city staff members do not feel the property meets the definition of blight.

No speakers addressed council about the plans. The bill is scheduled to receive its second reading and vote at the Dec. 17 meeting.

Landmark approval
Developer Matt Miller of Matt Miller Co. and his wife Stacy Jurado-Miller unanimously received the go-ahead from council Nov. 19 on their $9 million redevelopment plan for the historic Landmark building, 309 N. Jefferson Ave. Council declared the building blighted and put its stamp of approval on 100 percent property tax abatement for 10 years and 50 percent abatement for the next 15 years on improvements to the site.

The Millers’ development company, Vecino Group LLC, plans to turn the office building into The Frisco apartments, an 86-unit complex with universal design for people with mobility issues.[[In-content Ad]]