Heer's plans rise before City Council

City Council’s July 19 meeting, where Jefferson City developer Vaughn Prost’s redevelopment plans were considered, served as affirmation. But a majority vote is needed at council’s Aug. 2 meeting to move forward on the historic renovation that calls for retail, restaurant and Class A office space and a city-owned and -operated parking garage.

Prost’s company, Prost Builders Inc., is under contract to buy the 150,000-square-foot Heer’s building from Warren Davis, owner since 1995, for an undisclosed price. Prost considers council approval a final step in getting a deal done, though a financing hurdle also remains for the estimated $20 million project.

Council members, elated by plans for the building that one member called “the heart of the city,” all but passed it through.

“We want to do our part to make it happen,” Mayor Tom Carlson said.

Councilman Ralph Manley, a former residential developer, also sang Prost’s praises. “I must admire your speculative ability here ... (for) turning this white elephant into something economically feasible. This is the heart of the city,” Manley told Prost. “(A vacant Heer’s) has plagued us for too many years.”

Council considered two separate bills, one approving the redevelopment agreement and one adopting a Chapter 353 state urban redevelopment plan, which entitles tax abatement and authorizes development of a blighted area.

The city is involved on two fronts: financing the approximate $6.5 million, 540-space parking garage and acquiring 30,000 square feet on the lower level for $388,500 for a city traffic management center in partnership with Missouri Department of Transportation.

To offset the city’s costs, Prost plans to cover the debt service on 300 parking spaces for tenant use. In return, city officials have agreed to freeze Heer’s property taxes for 25 years at the current rate, and allow formation of two tax districts within Heer’s. A Community Improvement District and a Transportation Develop-ment District would add a total 2 percent tax on retail sales inside Heer’s. The city also plans to dedicate 1 percent of the general sales tax generated within Heer’s for the parking deck.

The city has earmarked $2.5 million in level property tax revenue – as identified in ballot-approved language – to fund the remainder of the parking garage cost.

It also plans to lease 5,000 square feet on the first floor for city government Channel TV23 studios.

Springfield City Manager Tom Finnie and Prost have said the project could not get done without the city’s help in financing the parking garage.

“That is traditionally a city function,” Finnie said. “There is no way to bring 500 jobs to the Heer’s, and the retail we’d like to see on the first floor, without more parking.”

A question on everybody’s mind is what it will cost to park there, Councilwoman Shelia Wright said.

“Zero,” Finnie said. “For the foreseeable future, we must provide free parking for retail customers.”

Heer’s office tenants would pay for parking as part of their lease packages, Prost said.

City staff said they liked Prost’s track record.

“This developer has a done a number of older buildings across the state,” Finnie said, including the governor’s mansion, Mark Twain’s boyhood home in Hannibal and the former Marquette Hotel in Cape Girardeau. “He is highly thought of by the state government. He rents space to the state.”

Prost can add Springfield’s Heer’s building to his list of properties with space leased to state government.

Heer’s leasing agents Larry Grover and Skip Liebman of CJR Commercial Group learned July 21 that state offices would occupy 13,500 square feet in Heer’s. Gov. Bob Holden was slated to announce the plans and sign a lease at a ceremony outside Heer’s July 23.

“We had been waiting for this to happen,” Grover said. “It shows that the state is behind this thing, too.”

Prost is working to secure lenders for the estimated $20 million project and expects multiple banks to be involved.

“This is a very large project. It is larger than any one local bank can handle,” he said. “There will be several banks coming together in financing this particular project.”[[In-content Ad]]