Board kills Grewe’s Crestwood Square proposal, then revives it

Aldermen set to vote Tuesday on CID for project

By BURKE WASSON

For nearly two hours last week, plans for a community-improvement district at Crestwood Square were dead.

But Crestwood aldermen revived the project by reconsidering a denial of that CID and eventually passing a first reading toward approval of a one-cent sales tax at the shopping center for up to 20 years.

After realizing that the board’s Nov. 28 “no” vote on the CID killed plans to bring Ace Hardware to Crestwood, Ward 3 Alderman Gregg Roby called for a motion to reconsider that denial. That motion was seconded by Ward 4 Alderman Pat Duwe. The vote to bring the matter before the board a second time was approved 6-2, with board President Jerry Miguel of Ward 3 and Ward 4 Alderman Steve Nieder opposed.

The second proposal for the first reading of the CID then passed with five of eight aldermen in favor. Miguel and Nieder again were opposed, and Ward 1 Alderman Richard Bland abstained. Bland originally had cast the deciding fifth vote to deny the CID to developer Gary Grewe of G.J. Grewe Inc.

On the board’s first vote for a first reading of the one-cent sales tax, the measure was defeated 5-3. Bland, Miguel, Nieder, Roby and Ward 2 Alderman Chris Pickel all voted no on the CID the first time.

Ward 1 Alderman Richard Breeding, Ward 2 Alderman Jim Kelleher and Ward 4 Alderman Pat Duwe voted to support the CID each time the board voted.

As proposed, the CID would use an additional one-cent sales tax at Crestwood Square to reimburse Grewe for up to $2 million in costs that he will pay for the project. But some aldermen have questioned some of Grewe’s desires for the project, which include having a majority vote on the CID board that would be created with the one-cent sales tax. Grewe has also declined to say how much money he will be spending on the project, which has also raised concern among aldermen.

Aldermen last week also approved first readings for two other ordinances for the project. The board voted 4-3 to approve the first reading of a development contract for the project between the city and Grewe. Miguel, Nieder and Pickel were opposed while Roby abstained. The board also voted 5-2 on the first reading of an ordinance to designate Crestwood Square as a blighted area. Miguel and Nieder were opposed, and Roby again abstained.

Grewe has told aldermen that West Lake Ace Hardware would move into a 30,000-square-foot store at Crestwood Square and that four other retail spaces would then be divided from the currently vacant building that once housed Office Depot and the Sports Authority. Grewe has said that Ace Hardware representatives would like to begin the renovation in early 2007 and is asking aldermen to approve the CID by no later than the board’s last meeting of the year on Tuesday.

Grewe told aldermen before they voted last week that he would not be comfortable with the city having a majority vote on the CID board, which would approve which of those improvements are reimbursable.

“There’s so much discretion with where the walls go and what the CID funds are used for in here that the board can just continue to say no, no, no,” Grewe said. “And the recourse of the property owner is to sue, and you’ve delayed things even more.

“It’s a function of control and how it’s developed. And you’re turning it over to the CID authority. This isn’t just when the board decides the sell the bonds if they’re sellable. This is where to put a wall, where to distribute funds, where is the best place to appropriate the $2 million in this overall development.”

Nieder responded to Grewe’s argument against the city having control of the CID board by saying that the board is not necessarily opposed to him and would do its best to work with Grewe. However, he also said that relinquishing the city’s control of the CID board is not negotiable because city officials also have to ensure that taxpayers’ money is well spent.

“Well, first of all, number one, I think this board as well as I think everybody in the city wants to be a partner with you,” Nieder said to Grewe. “But right now, you’re not being a very good partner. First of all, the board wants to help you as much as possible. But you’re already saying or predicting the future that they’re going to be against you. And I don’t believe anybody here is going to be against you. They’re all to help you. So I don’t understand why you have a problem with control of the board by the city.

“Number two, that is taxpayers’ dollars. So we do have an interest and a responsibility to the citizens and the taxpayers to make sure their money is spent wisely. That is a duty that we have taken as elected officials. So I don’t think that’s a negotiable point.”

Bond counsel Mark Grimm of Gilmore & Bell told aldermen that despite Grewe’s concerns, the CID board would not have the power in design phases like walls.

“I disagree with Mr. Grewe’s interpretation of the document that the CID board would have the discretion to dictate where walls are supposed to be located,” Grimm said. “I don’t know where he reads that in the document. It says that the district can just approve a cost that is not permitted under this agreement or the CID act. And, as I just read, the list of what is specifically permitted is fairly lengthy and broad and the CID board would not have discretion.”

Grewe also objects to a tenant-selection provision in the draft of his development contract with the city that prohibits specific low-revenue producing businesses at Crestwood Square. The types of business not permitted at the shopping center include, but are not limited to, taverns or bars, nightclubs, bowling alleys, billiard halls, arcades, movie theaters, live-performance theaters, service stations, automotive repair shops, pawn shops, automobile dealerships, day-care facilities, hotels, storage facilities and veterinarian offices.

The provision further stipulates that the following business projects are permitted but would not be be CID-eligible — health clubs, gyms, training and education facilities, buy-out or liquidation businesses and “retail stores featuring general merchandise closeouts or factory closeouts similar to Big Lots and Value City.”

But City Attorney Robert Golterman countered Grewe’s objection by saying that any of those business types could be approved by aldermen with a vote on a specific project.

Aldermen have also been concerned with Grewe’s timeline for the project, and Bland told Grewe last week that he would not be pressured to make a decision.

“There is a perception in the community that these economic-development tools — TIFs, TDDs, CIDs — are abused and just tossed out there,” Bland said. “I believe we need to be judicious about how we use these.

“With all due respect, Mr. Grewe, I don’t appreciate being told how to do what we’re doing up here. I think we’ve got a timeline, too. And in terms of making decisions that are going to impact this city, not just from a business standpoint because businesses are fickle, but from a residents’ standpoint, I take exception at being told: ‘This is the timeline, this is how we’re going to do it, this is when we’re going to do it, this is the way we’re going to do it.’ This is negotiation. There are things that do need to be negotiated. And I would be willing at this point to let the city staff and you and your staff work those issues out and then bring it back before the board. But make no mistake. I do not feel bound by your arbitrary time limits. And if these issues that are out there that are not resolved right now aren’t resolved to my satisfaction, I won’t support the project. Plain and simple. Now, I’m one of eight. But I won’t support the project,” he added.

Mayor Roy Robinson defended Grewe’s need for a timeline and told aldermen that without it, the project as a whole would be in jeopardy.

“We knew the timeline that he needed,” Robinson said. “I’m not saying that he dictated it. You may perceive it as dictate. He just told you what we needed to get done in a time period in order to be able to get the businesses that want to come in available.”