Crestwood Point TDD board tries to resolve ’02 property-sale issues

THF Realty seeks reimbursement, city envisions parking-lot improvements


Before the Crestwood Point Transportation Development District Board can issue bonds to reconstruct the city’s Government Center parking lot, it has to resolve some issues related to the former Crestwood Swim Club property sold in 2002.

THF Realty, the developer that bought the former Swim Club property from Rosebrook Real Estate for $850,000 in 2002 toward the development of Kohl’s at Watson and Sappington roads, is seeking reimbursement for part of that property now used as the Government Center’s back parking lot. The reimbursement of those funds would come from TDD monies generated from a one-cent sales tax levied on purchases at Kohl’s. That TDD sales tax originally was projected to be three-eighths of a cent, but was raised to a 1-cent tax in 2003 by the Crestwood Point TDD Board.

To determine exactly how much THF Realty will receive, the Crestwood Point TDD Board of Directors last week unanimously adopted a resolution to perform an appraisal of the back parking-lot area, which is roughly two-thirds of an acre. That appraisal figure would be based on market conditions when the lot was sold in December 2002.

Although the Board of Directors has reached a consensus to engage McReynolds Von Trapp Daniel-Gentry to perform the appraisal, the final approval of that agreement rests with the city’s Board of Aldermen.

As proposed last July, the city’s project to refurbish its entire parking-lot area would include the back lot to be appraised and enhance the lot with new pavement and lighting. Director of Public Services Jim Eckrich said at a July 11 Board of Aldermen work session that he likely would ask for approval of the $631,719 estimate reached in 2003 as a TDD cost toward the project. Although his project estimate was $599,000, Eckrich indicated that approval of more than $631,000 would provide some breathing room and, if any funds are left over, help pay down the bonds that would be used toward the project.

City Administrator Frank Myers said at the Feb. 1 Crestwood Point TDD meeting that before any parking-lot reconstruction could take place, officials must first determine exactly how much THF Realty will be reimbursed for its purchase of former Swim Club property that was conveyed to Crestwood as the city’s back parking-lot area.

“We need an independent, separate appraisal reflective of one, not the full property, but the piece of property that’s (TDD) eligible for this board to then make an approval of some amount of money that is justifiable and defendable for that parcel of property,” Myers said. “Because we then have to go out for bonds for the long-term financing of this project. And until we get that one piece resolved, we cannot do the long-term financing. So we need to move beyond this point. We need to come up with a number that is publicly defendable. We’ve done our due diligence as a board.

“And then that’s going to have to be defended to the Board of Aldermen, who are ultimately going to have to amend the intergovernmental agreement allowing for the issuance of the bonds and the other steps that are going to take place, including the rehabilitation of our parking lot.

“So that’s where we’re heading. We need an appraisal to determine the appropriate value of this parcel of property that will determine the amount of the bond issuance or one piece of the bond issuance so that we can bring closure to this project and get the city’s parking lot restructured for the agreement or refurbished for the agreement and pay THF this remaining debt that is owed to them.”

Robert Klahr, an attorney with Armstrong Teasdale and a member of the Crestwood Point TDD Board, said that THF Realty originally requested that the TDD board approve an $800,000 reimbursement.

But he further noted that because THF acquired property necessary for the Kohl’s development and the Swim Club conveyed the property now known as the city’s back parking lot directly to the city, the Kohl’s property is not eligible to be reimbursed through the TDD.

“There are two parcels of property in question that were acquired from Rosebrook Real Estate,” Klahr said. “One is a parcel of property that’s approximately one acre in size that is now part of the Kohl’s site that is owned by THF Crestwood Point Development. The other is approximately two-thirds of an acre parcel that is what I think what we commonly refer to as sort of the back parking lot of the city of Crestwood that was owned by Rosebrook Real Estate but is now owned by the city and at some point was acquired by the city for various reasons because they were planning some improvements to the police station and so forth.

“Ultimately, from a TDD standpoint, the eligible costs are for the acquisition of the back parking lot of the city because that is what TDD has identified as part of its project is to reconstruct the city parking lot on property acquired and existing property that it already had. That is one of the eligible TDD projects. But there is nothing in the TDD documentation that would suggest it could fund the property that is now on the Kohl’s back parking lot. And so parsing out what the value is of the back parking-lot property versus what was paid for the Kohl’s back parking lot is what we’re trying to accomplish through the engagement of an appraiser so we can say we are only reimbursing for the piece that is the back parking lot of the city parking lot.”

“Which is clearly eligible under the statute?” Myers said.

“Correct,” Klahr said. “In any event, the idea is the appraiser will be engaged to look at the value of both parcels as of December 2002, which is when they were originally conveyed by Rosebrook, to provide the appraisal with respect to each of those in relation to what was paid and in relation to the fact that they were acquired in both instances as part of an assemblage of property that was a larger piece — THF’s property for the Kohl’s development and the back parking lot for the larger Government Center piece.”

Myers questioned a provision in the proposed contract with McReynolds Von Trapp Daniel-Gentry that states that the appraisal report shall not be “disseminated to the public through advertising media, public relations media, news media, sales media, or any other public means of communication, without the prior written consent and approval of the author.”

It was agreed that Myers would not direct aldermen to amend the intergovernmental agreement with the Crestwood Point TDD Board by allowing the appraisal unless its contents are made public.

“I would assume that this report and information is going to be public information,” Myers said. “Does this prohibit this information from being public information?”

“It would if Mr. McReynolds and his firm decided that it should not be published,” Klahr said. “You can certainly, before approving it, declare clarification from him that he would consent to dissemination of it.”

“Good point,” said Mayor Roy Robinson. “Most certainly, that will be the consideration that he’ll have to understand before he takes the job.”

Klahr said an additional reason for the appraisal is because the manner in which Rosebrook sold both pieces of Swim Club property to THF for $850,000 contradicted a 2002 Board of Aldermen memo.

“This gets to the crux of the matter,” Klahr said. “Had everything gone according to that board memorandum where THF was to acquire all the property for $750,000 and then conveyed the parking-lot piece to the city for $650,000, we probably wouldn’t be here today worrying about all this. Ultimately, it’s my understanding that THF was actually not aware of that board memorandum that was presented and that the intention was to run it all through THF as far as title of both parcels … Having said all that, it doesn’t necessarily mean that $850,000 is the appropriate market value to apply to both of those pieces of property as a whole, which is frankly more the reason why we’re looking to have an appraisal done now to sort of look back in time as to what they were valued at in 2002.”