The company that owns Deer Creek Center plans to seek tax-increment financing and hopes to establish a community improvement district to redevelop the property and attract businesses to the mostly-vacant strip mall.
Two representatives from Summit Development presented preliminary plans to Maplewood City Council during a meeting on Tuesday night. The plans call for the demolition of roughly 40,000 square feet from the western portion of Deer Creek Center. The remaining 200,000 square feet from the western side would be divided into seven stores, ranging in size from 3,500 to 28,000 square feet.
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Summit also hopes to improve lighting, parking, signage and landscaping. The eastern part of the building would face renovations too.
It's too early to calculate renovation and demolition costs, said Scott Reese, principal and president of Summit Development.
What is tax-increment financing and what's a community improvement district?
Tax-increment financing (TIF) essentially means using public tax dollars to pay for private redevelopment on properties that would otherwise remain eyesores. TIF projects vary in size and, in some cases, procedure.
In the example of the Deer Creek Center, Summit Development would finance the project in the beginning. Summit would then sell bonds to the bond market.
Meanwhile, the City of Maplewood would act as a collection agency. Half of the sales tax revenues collected in that TIF district would enter a special fund to pay off those bonds, and all property tax revenues resulting from an increase in property value would be funneled into the fund.
If all goes according to plan and the bonds are paid off (after several years, depending on the size of the project), then Maplewood—and other taxing bodies, like the Maplewood Richmond Heights School District, for example—would receive their tax revenues as normal.
But the City of Maplewood doesn't lose any money if the project fails, City Manager Marty Corcoran said. And the city requires developers to pay for costs associated with implementing a TIF, like legal fees.
A community improvement district (CID) is similar to a TIF, where revenues collected in the district (whether that's sales or property taxes or business license costs, for example) can be used to pay for infrastructure projects, like parking, lighting or signage.
Why use a TIF?
Reese said the building, which has sat vacant for 12 years, faces too many challenges for redevelopment without the help of a TIF. The building is located on a flood plain and Reese talked about environmental concerns.
"Without any doubt, this shopping center is the epitome of a blighted property,” said Reese to city council members.
Summit Development acquired the property in 2002. The site was home a Venture discount store until 1996 before Kmart filled the property for two years. It's been vacant since 1999.
But Ward 3 Councilman Shawn Faulkingham questioned the need to use TIF dollars to attract businesses to Maplewood.
"Not to toot Maplewood's horn, but we're a pretty good spot for retail," Faulkingham said.
Potential effect on the city
The project would be beneficial to Maplewood, said Corcoran in an interview after the meeting.
Not only would the city receive additional sales and property tax revenues from the site over time, but a retail destination would draw additional shoppers to Maplewood.
Those shoppers would also visit Maplewood's other stores, he said.
During the meeting, Reese estimated the retail sales totaling $25 to $35 million per year in the spot.
But TIF projects have been criticized in the past. If retailers abandon their current locations in other cities to follow the TIF money to Maplewood, then the former location that's left vacant could become another Deer Creek Center-like site for several years before that city authorizes another company to redevelop the property. And the cycle continues.
Plans for the space
Clothing retailers have expressed interest in moving to the space, Reese said.
He couldn't specify which retailers because negotiations are ongoing, but he offered some details:
- One potential tenant, an apparel department store, doesn't have a location in St. Louis yet.
- Three other potential tenants—"Soft goods and apparel users," Reese said—have stores in the St. Louis area but none in adjoining communities, like Richmond Heights or Brentwood.
Summit would also renovate the spaces on the eastern half of Deer Creek Center that are currently occupied.
Summit aims to complete the project before the back-to-school shopping season next summer.
But several things must happen before redevelopment can begin. Summit must present a proposal that outlines and justifies its need for a TIF to Maplewood City Council, which must then authorize the plan. The property requires rezoning, too.
All told, the project is still in its conceptual phase and we'll likely wait several weeks before anything is submitted to city council.