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Tuesday, April 23, 2013
Mall Redevelopment Proposal is Big

City Manager Darin Atteberry has put a big, bold proposal on the table to support the redevelopment of the Foothills Mall. The price tag: $53 million.

In serious decline for nearly a decade, the Foothills Mall was purchased last year by Denver-based developer Alberta Development. Since then preliminary site planning has been underway along with tenant negotiations and recruitment. A serious obstacle to the envisioned plan was Sears, which owns its building and land at the mall. That matter has now been resolved with Sears agreeing to sell its existing site and having a self-standing building constructed near the perimeter of the developed mall site. While supportive of the mall redevelopment, the Chamber had opposed the use of eminent domain (government forcing the sale of private property) to secure the Sears site. We’re pleased to see the private parties resolve their issues without coercive government action.

A story in today’s Fort Collins Coloradoan by Pat Ferrier and Kevin Duggan provides an overview of the City’s proposal. The developer will invest $312 million - $230 million for the mall and $82 million for nearby residential.

The City’s financing package uses a combination of tools including a metro district, public improvement fee and tax increment financing. Using these mechanisms, the City’s ‘incentives’ are largely paid for from revenue made possible by the redevelopment project itself. In addition to getting a revitalized retail district in the center of town, the City is also asking the developer to build a youth activity center for $4.8 million and a pedestrian underpass under College Avenue to the Mason Corridor.

The City estimates that the revitalized mall will generate $117 million in new sales tax revenue over the next 25 years.

There are a lot of elements to this proposal and number of issues to consider. What happens to the Midtown Corridor (Prospect to south of Harmony) if the mall does not redevelop? Is this a proper use of the public-sanctioned financing tools like tax increment financing? What is the impact of these financing tools on other taxing districts? Is this fair to other retail areas in town that won’t benefit from these kinds of tools? Etc, etc.

A few quick thoughts:
• Some will argue that this is going to happen anyway so the City shouldn’t have to give up anything in terms of incentives. Maybe, but I don’t think so. The costs and obstacles for the developer are too high without significant financial relief. For decades the city government has demanded ‘high standards’ of developers in terms of high fees and very demanding design and construction standards. Now, for some projects to move forward, the City finds itself in a position of having to use various financing tools and / or waiving taxes and fees to mitigate some of its self-constructed obstacles.
• The Chamber has been supportive of ‘incentives’ for primary employers to attract or retain their payrolls in the community because of the huge economic benefit. Our approach on retail recruitment as been more hands off. In essence, our view has been that if there is disposable income in the community, retail will follow.
• The ‘however’ in this instance is that Fort Collins is the retail trade center of northeastern Colorado, southern Wyoming and the panhandle of Nebraska. Nearly 20 percent of retail sales in Fort Collins are made to people who do not live here. While not as important as the payrolls of primary employers, retail is still a significant source of outside income for the community. Furthermore, retail is an important amenity and generates the revenue necessary for important local government services. A declining or shuttered mall is an economic liability; a revitalized mall is an economic asset.
• The concern that a publicly-backed retail project is unfair to other retail areas is worthy of consideration. Is the city government picking winners and losers? Another angle on this is that a revitalized mall keeps shoppers in town and attracts nonresidents. People coming to the mall also shop in other parts of the city while they are here. But the key is they first have to be here. An attractive regional mall will keep and bring shoppers to Fort Collins.

The Chamber does not have a policy on this proposal yet. The Chamber’s Local Legislative Affairs Committee will take the issue up later this week. If you have thoughts on the City’s mall redevelopment proposal, call me at 970 482-3751 x 102 or send an email to davidmay@fcchamber.org.

The City Council will be hear the proposal at its meeting tonight at 6:00. You can attend in person at City Hall, 300 LaPorte Ave. or watch it on Channel 14.

 

Posted by: David May @ 11:00:00 am 
 
 
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