Crestwood aldermen eye request to redevelop city’s mall

Sale price of Crestwood mall could be as low as $21 million

By BURKE WASSON

In an effort to revive the struggling Westfield Shoppingtown Crestwood, Crestwood aldermen were set this week to decide whether to send a request to redevelop the mall to more than 80 developers.

The Board of Aldermen was scheduled to vote Tuesday night — after the Call went to press — on City Administrator Frank Myers’ recommendation to authorize an RDP, or request for development proposals, for the Crestwood mall.

The mall has suffered in recent years with average annual declines in sales-tax revenue of 13 percent per year. In turn, the revenue declines at the mall have weakened the city’s overall sales-tax revenue, which city officials report that one-third of which is collected from the Westfield Shoppingtown Crestwood.

Revenue collected at the mall from the city’s 2.5-cent sales tax has dropped from $3.73 million in 2002 to $2.3 million in 2006.

And as recently as July, an estimated one-third of the 48-acre mall’s total retail space was vacant. Another vacancy will hit the mall by Oct. 20, when Dillard’s — one of the mall’s three anchor stores along with Macy’s and Sears — is scheduled to close.

Because of that loss, Myers estimates the city will lose an additional $300,000 to $350,000 in sales-tax revenue this year.

With many of these factors in mind, the administration in January retained the services of consultant Peckham, Guyton, Albers & Viets Inc., to form a request to redevelop the Crestwood mall.

PGAV consultant John Brancaglione, who has consulted with the city since the early 1980s, told aldermen last week his firm’s services to develop the RDP will cost no more than $7,000 to the city.

Additionally, if aldermen decide to issue the RDP to developers, the city will pay an estimated $2,500 to legal counsel Gilmore & Bell for its review.

While the administration has not ruled out any possibilities to redevelop the mall area, officials would consider an open-air, town-center style and are open to offering certain incentives to interested developers.

Within the RDP, city officials are open to using available economic-development tools like tax-increment financing, a transportation-development district and a community-improvement district.

The RDP also indicates that city officials are open to using eminent domain to ac-quire the mall property from Westfield.

Crestwood Economic and Community Development Manager Tryla Brown told aldermen last week that while Westfield officials recognize the city’s need to issue an RDP, they would challenge condemnation of the mall property.

The RDP also contemplates an initial investment by the city to assist developers with potential project costs. Myers told aldermen last week that he expects the city to pay from $10,000 to $20,000 up front for a redevelopment project of the board’s choosing. That money, he added, would be recovered through sales-tax revenue at the mall collected from a TIF, TDD or CID.

While the Crestwood mall is the only shopping center in the St. Louis area that the Westfield Group still fully owns, Westfield officials have indicated they still are trying to sell the Crestwood center.

In August, Westfield announced the sale of four area malls to CBL & Associates Properties Inc. While Westfield sold the Chesterfield Mall outright to CBL, its officials agreed to start joint ventures with CBL at the West County Center in Des Peres, the Mid Rivers Mall in St. Peters and the South County Center.

The Westfield Group previously came close to selling the Crestwood mall in May 2006 to California-based Somera Capital Management, but the sale was not completed. The Crestwood mall’s assessed valuation is $31,012,190. Last year, it was $28,765,700.

Though the assessed valuation of the Crestwood mall totals more than $31 million, Brancaglione speculated last week that the shopping center actually could be sold for much less.

Based on its conditional similarities with Westfield’s former St. Ann mall, Northwest Plaza, which was sold in 2006 to Somera, Brancaglione said the Crestwood mall might sell for as low as $21 million.

Because Northwest Plaza, which sits on 103 acres, sold for $45 million, the prorated value of the 48-acre Crestwood mall would be roughly $21 million.

Despite that potentially low sales price, Brancaglione said the cost to redevelop the mall could be as high as $250 million.

“The proposal request process is one that cities throughout the country use and the endeavor you’re attempting to embark upon here,” Brancaglione told aldermen last week. “And it is a mechanism that I think is what you have to do to let the development community out there — and I would point out, the right members of the development community … That is everybody throughout the country that, in our opinion, is the kind of entity that could undertake a project like this. If you look at what is involved in a typical situation of this nature, it’s very large dollars. The total cost of the project in St. Ann, for example, exceeds $250 million …

“It’s not likely, in our opinion, that anyone would undertake a project of a magnitude that’s quite likely to be involved here absent of providing some sort of incentive simply because, at the end of the day, no matter who the developer is, they can’t eke out enough lease revenue in today’s retail market to cover the costs that are associated with something of this order of magnitude.

“It would not surprise me that if there were an attempt to redevelop this property somewhat along the lines of the kind of redevelopment that is to occur at Northwest Plaza that, in fact, the cost would be similar. It is a major undertaking.”

Of the 82 developers that would receive the RDP if aldermen approve its issuance this week, 20 are in the St. Louis area, including Crestwood developer G.J. Grewe, THF Realty, Pace Properties and the Sansone Group.

Among the criteria detailed by the city in the proposed RDP is that city officials will award preference to any developer that can attract new retailers to the mall.

“Prior to the execution of any redevelopment agreement, the city is going to want clear and verifiable demonstrations of interest by potential retailers,” Brancaglione said. “Preference will be given to a developer that can show an ability to attract newer, expanding retailers and businesses.

“Preference will be given to proposals that provide for the addition of lifestyle building elements to the property. There will be a favorable consideration to propose a redevelopment program that leads to a higher generation in sales tax. You’re going to expect high-quality urban design and architecture. You’ll give a preference to plans that demonstrate improved accessibility to the site and improvements to the parking.”