Heer’s buyer submits desired incentives

On Aug. 27, Springfield City Council approved an agreement for the city to sell the downtown landmark to McGowan|Walsh – doing business as Heer’s Building LLC – for $3 million. The sale must close by Oct. 27.

In a Sept. 27 letter to Springfield City Manager Bob Cumley, St. Louis attorney David Richardson of Husch & Eppenberger LLC outlined the incentives McGowan|Walsh plans to request for the Heer’s project.

The list covers three areas: special taxing districts, tax credits and tax abatement programs.

Specifically, the developer is seeking the establishment of tax increment financing, and community improvement and transportation development districts. Tax credit programs requested include neighborhood preservation, brownfield, New Markets, and state and federal historic tax credits. Tax abatement available under three Missouri statutes is also cited in the letter.

McGowan|Walsh also plans to pursue an incentive through the Missouri Downtown Economic Stimulus Act, or MoDESA, which diverts a portion of new state and local taxes created by a project to pay for public infrastructure and related costs for up to 25 years.

The letter does not mention the diversion of half the revenue from Springfield’s original hotel-motel tax levied in 1979 – an incentive McGowan previously pitched that was met with opposition from the Springfield Hotel & Motel Association. McGowan, however, has reserved the right to formally request the tax break from the Springfield Convention & Visitors Bureau Board.

McGowan|Walsh must provide a detailed list of requested incentives to the city by Nov. 1, said Mary Lilly Smith, the city’s economic development director. The city will enact agreed-upon incentives by Jan. 1, according to the agreement.

Under the agreement, lead developer Kevin McGowan has until Sept. 1, 2008, to begin redeveloping the building into either a boutique hotel or condominiums. McGowan has agreed to pay the city $1,400 for each day of inactivity after the deadline, with a maximum penalty of $250,000.

See SBJ’s Oct. 8 issue for more about requested incentives for the Heer’s project.[[In-content Ad]]