Developers of two vacant but very different Springfield properties introduced proposals at the April 22 Springfield City Council meeting calling for approval of tax incentives to make their multimillion-dollar plans a reality.
One group is working to transform a long-standing piece of the downtown skyline, while the other looks to break new ground at the edge of town to meet a localized need for restaurant, retail and office space.
Springfield Plaza Real Estate LLC officials are asking City Council to sign off on a $9.6 million tax increment financing district to reimburse infrastructure costs on a planned $78.5 million mixed-use development.
The developers – led by commercial real estate brokers Tom Rankin and Jeff Childs – intend to build the complex southwest of the Walmart Supercenter at 3520 W. Sunshine St., with new streets serving as entrances designed to connect to West Bypass and Sunshine.
Rankin said the plans have been in the works for two years and investors – which include the families of Springfield businessmen Charlie O’Reilly and Bill Darr – are now ready to move forward. He said the taxing district is critical to the development’s feasibility.
“There is really no risk to the city of Springfield. We have all of the financial risk,” Rankin told council.
He said the developers have worked with city staff to ensure their plan – which would include the creation of a 1/2-cent community improvement district to speed up the reimbursements – conforms to the city’s comprehensive plan for economic development.
In making his pitch to council during the public hearing, Rankin said the length of the CID would be limited to 18 years, five less than the maximum allowed under state statutes. While 100 percent of taxable improvements could be abated by law for up to 10 years, Rankin is asking the city for 75 percent abatement on annual tax increases.
Rankin said Springfield Plaza would be built in two phases, with 182,500 square feet of retail to come first on the north side of the property, followed by 250,000 square feet devoted to office space on the south side. Rankin noted no tenants have committed to the project.
“The west side of Springfield is underserved from a retail standpoint,” Rankin said, adding the property is five miles from what he called the city’s most popular retail corridor – South Glenstone Avenue between Battlefield Mall and Independence Street.
Springfield-Greene County Library District Executive Director Regina Cooper was one of three speakers not tied to the development who spoke in favor of the plans.
“I generally do not get excited when I hear the word ‘TIF’ because our primary financing comes from property taxes, but I do live in the southwest and drive by this property frequently, and it looks pretty bad,” Cooper said, referring to the overgrown brush and weeds and evidence of illegal dumping on the property. “There’s not a lot of taxes coming from this property, so the possibility of something happening in the future is very positive.”
Residential developer Tom Kissee said the west and southwest sections of town are in need of more restaurant options, in particular.
“Many residents have no where to go eat that isn’t at least two to three miles away,” said Kissee, who has developed 1,300 residences in the area.
Speaking in opposition, Battlefield Mall General Manager Erik Fjeseth cautioned council on tax-supported developments.
“In its essence, TIFs are a scheme,” said Fjeseth, adding that Simon Properties did not seek a TIF district when it developed the mall. “If the developer wants to develop the land, it is nice to have the developer pay for all the infrastructure. Generally, they do.”
Council is expected to vote on two bills related to the TIF proposal at its May 6 meeting.
Springfield Plaza Real Estate LLC plans a $78 million retail and office development at West Sunshine Street and West Bypass if the city reimburses $9.6 million in infrastructure costs.
Sky Eleven at WoodruffTim Roth, a commercial real estate adviser and Woodruff co-owner, introduced to council a $13 million redevelopment plan for the century-old Woodruff building downtown. The plans include securing long-term tax abatement on improvements to the property – a move that requires council determination that blighted conditions exist on the property, according to Springfield Economic Development Director Mary Lilly Smith.
“The abatement would go for a period of 25 years. For the first 10 years, there would be 100 percent abatement on the new improvements. The property owner will pay (payment in lieu of taxes) that is equal to taxes currently being paid, so there is no reduction to the taxes currently being paid to the taxing jurisdictions,” Smith said. “For years 11 through 25, 50 percent of the taxes to the land and improvements being made would be abated.”
According to a city estimate, if approved, the abatement would save the developers $1.1 million in property taxes during the 25-year period. According to a tax impact study submitted with the redevelopment plan, without redevelopment, property taxes would amount to $337,088 during that period, but with the improvements and the abatement plan in place, the developers would pay $708,397 during that period.
Smith said blighted conditions on the property, which has been vacant for three years, include broken windows, mold, water damage, graffiti, drug paraphernalia, the presence of lead paint and asbestos.
Roth and business partner/developer Matt Miller of Matt Miller Co. and The Vecino Group LLC plan to create 96 apartment units and rename it Sky Eleven, after the year the 10-story building opened, 1911. The complex would have an exterior pool on the north side of the property, doorman service, a theater room, fitness area, restaurant and office space on the first floor.
The developers purchased the 103,000-square-foot building in November for an undisclosed amount through Woodruff Historic Building LLC. Roth told Springfield Business Journal the developers also are pursuing plans for renovations at the adjacent four-story McDaniel Building, though he declined to disclose details. Miller received council approval in November for a $9 million renovation of the Landmark building across the street to the north.
The Woodruff redevelopment plan is scheduled for a second reading and vote May 6.
