The city of Springfield is stepping in to offer a resolution to the Heer’s Tower project.
City Manager Greg Burris said yesterday a resolution and term sheet would be considered at Monday’s City Council meeting that includes a $2 million loan to St. Louis-based development company Blue Urban LLC.
The money would come from the city’s small business development loan program, established to lend money to small-business owners, nonprofit organizations and real estate developers.
If the resolution is approved, the project would be submitted to the U.S. Department of Housing and Urban Development, according to Kevin McGowan, Heer’s owner and president of Blue Urban.
“If council agrees to do that Monday, that will put together the final components of the financing package to make the deal possible,” Burris said.
McGowan is seeking $12 million in HUD funding, a $3 million bridge loan from a St. Louis bank and the $2 million loan from the city, with the balance of the $27 million project funded by historic preservation tax credits and local incentives.
If approved by HUD, McGowan said, closing on the deal could come shortly after the first of the year, with construction to follow. Current Heer’s Tower plans call for 63 market-rate apartments and amenities including a weight room, pool, library and atrium with open-air patio.
“This is a vital step toward the completion of the funding,” McGowan said yesterday via cell phone. “Obviously, we need help from the city of Springfield. We’ll find out what happens on Monday.”
One of the roles of the city’s small business development program, which has been in place for more than 30 years, is to eliminate slum and blight, according to Mary Lilly Smith, the city’s economic development director.
McGowan bought the iconic eight-story, 150,000-square-foot Heer’s building from the city for $3 million in November 2007. A year later, he revealed renovation plans for a Mike Shannon’s Steak & Seafood restaurant and condos.
The economy and limited access to capital has stalled the plan, he said.
“I’ve said it all along that Heer’s is really one of the most exciting projects that we’ve had the opportunity to develop, and we’re very much looking forward to developing it,” McGowan said. “Our commitment remains very strong, but in this environment, it’s kind of like stealing the spots off a leopard; it’s really hard.”
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