Heer’s building owner Kevin McGowan has cleared a significant hurdle in the redevelopment of the downtown Springfield landmark.
The Missouri Development Finance Board on Sept. 21 unanimously approved a preliminary resolution for a $1 million loan funneled through the city and up to $5 million in historic tax credits to restore the vacant structure.
“This is a mighty step forward for the Heer’s building,” McGowan said.
Each year, the state board approves funding and tax credits to more than two dozen projects, according to annual reports posted on www.mdfb.org
. In fiscal 2009, which ended June 30, 2009, MDFB authorized $622 million toward 27 projects. In fiscal 2008, the board authorized $432 million toward 31 projects, and in fiscal 2007, it approved $279.5 million for 23 projects.
Other financing in hand for the $29.3 million Heer’s Tower project is a $2 million small-business development loan from the city of Springfield. City Council approved that loan Aug. 23 but not without concerns.
“I really wanted it done without the input of city money,” said councilwoman Cindy Rushefsky, who ultimately supports the effort. “If this is what it takes, fine.”
Still, Rushefsky has doubts that McGowan will receive the remainder of the project financing, which she calls “on the edge.”
Next up is McGowan’s application for an $11.8 million U.S. Housing and Urban Development-backed loan, the project’s largest single method of financing.
Federal tax credits are slated to bring in $5.2 million and McGowan is contributing $4.4 million.
McGowan said he believed it noteworthy that the project finally is starting to gain ground during what he called the toughest time for real estate development since the Great Depression.
“It’s a testimony to all the good people to help make it happen,” said McGowan, who is developing the building property under Heer’s Building LLC with his wife, Erin, and her father, St. Louis Cardinals broadcaster Mike Shannon.
The day of the board’s vote, Springfield City Manager Greg Burris, Mayor Jim O’Neal, city Economic Development Director Mary Lilly Smith and McGowan presented to the board the Heer’s Tower plan.
“It’s a real shot in the arm for the project because this brings the state into the project,” Burris said.
Burris said the board will send requests for proposals to Springfield-area banks for the $4.9 million bridge loan.
MDFB Chairwoman Marie Carmichael said the state support, while a small piece overall, was vital to project completion.
“We set out a term sheet. We approved our participation in the project,” said Carmichael, one of two board representatives from the Springfield area and co-owner of Affordable Homes Development Inc.
Carmichael said the board was solidly behind the project because of the historic significance for Springfield and the redevelopment factor.
“Our board has participated in projects like this in other communities,” she said. “Our participation is key to taking it over the top.”
Danette Proctor, co-owner of D-4 Investments LLC in Willard, is the other local MDFB representative among its 12 voting members.
“If it wasn’t for what we put in, the project probably wouldn’t go. We’re just tickled to death to help,” said Proctor, who worked at the Heer’s department store in women’s retail sales during the early 1970s while attending Missouri State University.
McGowan now faces an Oct. 6 application deadline for HUD financing, one he realizes he’ll have to work hard to meet.
“HUD has to receive the application by then or else some of the numbers will need to change, and we’ll have a gap again that we’ll have to cover,” McGowan said.
McGowan bought the eight-story, 150,000-square-foot building from the city for $3 million in November 2007.
His plans call for a Mike Shannon’s Steak & Seafood restaurant, bowling alley, indoor pool and fitness center and 61 apartments.[[In-content Ad]]