Signs of life downtown? Redevelopment slows

Work on Heer’s Tower has slowed noticeably since last month’s announcement that Jefferson City developer Vaughn Prost missed his second deadline to secure financing for the $32 million project.

And just west of Heer’s, ground has yet to be broken on the much-anticipated College Station – a $22 million mixed-use development originally set to open this fall with a 14-screen first-run movie theater complex. A year ago, developer Scott Tillman announced he had signed a contract with Oregon-based Wallace Theater Holdings Inc. to operate the 46,000-square-foot, stadium-seating theater.

So what’s holding up the two projects that center-city visionaries say are integral to downtown’s renaissance?

Heer’s deadline looming

For Prost, it’s money.

Mary Lilly Smith, the city’s economic development director, said the developer has until Aug. 22 to obtain financing for the Heer’s project. Should Prost miss the deadline, the city would terminate its contract with him and select another developer to finish refurbishing the former department store, she said.

An optimistic Prost said he’s been in touch with several interested banks but still lacks firm commitments for roughly $23 million in equity needed to move the project forward.

“We are going to continue to work on it until we get it done or until the city says, ‘We’re going to work with someone else,’” he said.

Brownfield remediation work inside Heer’s, such as asbestos and lead paint removal, is ongoing, but exterior construction work won’t begin in earnest until financing is in place, Prost said.

Most of the seven-story building is slated for retail and office space, with 23 presold luxury condominiums occupying the top four floors of the nearly 150,000-square-foot building. The city also has agreed to build an adjoining 530-space parking deck at the southeast corner of Campbell Avenue and Olive Street. That $7.5 million to $8 million project is behind schedule, too, but still in the works, Smith said.

Although he had hoped Heer’s would be much further along by now, Prost doesn’t have any regrets about buying downtown’s biggest eyesore and initiating its metamorphosis.

“Developing is full of many risks,” he said. “If it was easy, I guess there would be a lot more developers.”

Investor takeover?

One developer who invested in downtown nearly 30 years ago said the inertia of various revitalization efforts would ensure completion of the Heer’s project – with or without Prost at the helm.

“The Heer’s project will get done,” said a confident Jim Shirato, who recently sold the Vandivort Center on East Walnut Street to Trolley’s co-owner Aaron Buerge. “Maybe not under its current structure, but it will get done. I can say there will be someone who steps up and does that or a group that steps up and does that.”

But what about financing?

“As long as there’s money to be made, the money is there,” Shirato said, hinting that there may be a consortium of investors waiting in the wings.

Shirato wouldn’t elaborate further, but Smith acknowledged that there has been renewed interest in the Heer’s project. She declined to discuss details about the inquiries.

“There have been some folks who have toured the building, looked at the documents,” Smith said. “It’s very important for the community to see that building rehabilitated, so we’re confident it will happen.”

A year behind schedule

As for College Station’s apparent delays, the city is taking the blame.

Engineers are redesigning a parking garage to be built in conjunction with College Station after bids came in earlier this year about $2 million above budget, Smith said. The goal is to start construction on the structure, which will have between 350 and 425 spaces, this fall when ground is broken for College Station.

“From our understanding with the city, the redesigned deck should be out for bid shortly, and we are very optimistic the new costs will be on target,” developer Tillman said in an e-mail.

The deck will be built on what is currently a public parking lot bounded by College and McDaniel streets and Market Avenue, and its ground floor will comprise 35,000 square feet of retail space. The theater and another 42,000 square feet of retail space will be built on a vacant city block immediately north of the new deck, where a faded sign promoting the project now stands.

Tillman said he has financing commitments to construct the mammoth project, provided the second round of bids for the parking deck doesn’t exceed the city’s estimates.

Tillman also said he has several letters of intent from businesses that are planning to lease storefronts near the theater, but he declined to name any of them.

There’s a possibility some national franchises may be interested in leasing space at College Station, said Rusty Worley, executive director of the Urban Districts Alliance.

Worley pointed to Lawrence, Kan., as a good example of a downtown area with a healthy mix of national chains and local businesses.

Worley said the theater will be a “huge traffic-driver” for downtown, and he’s hopeful moviegoers will be able to catch a flick downtown by next year’s holiday season.

“Here in the Show-Me State, we want to see bulldozers moving dirt and pillars going in for the parking deck,” Worley said. “And moving from concept to reality will really take the excitement to another level.”

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