The new Crestwood mall redevelopment plan was taken by courier to the members of the Crestwood TIF Commission Friday, giving the public both a price tag and concrete financing from a bank.
Developer Dierbergs proposes a $67 million redevelopment of half the 46-acre site with $17 million in tax incentives, including $13.5 million in tax-increment financing and $3.5 million in a 1-percent Community Improvement District sales tax.
Past developers of the site have struggled with financing, but First Bank — which is owned by the Dierberg family — wrote a letter to the city included in the plan that guarantees financing if the TIF is granted. Three would-be developers have come and gone since 2013, when the mall closed.
Dierbergs has partnered with McBride Homes since December to redevelop the site — half as a shopping center anchored by a Dierbergs grocery store and the other half a new McBride subdivision of single-family houses. The two St. Louis-based companies have the now-demolished mall under contract from current owner UrbanStreet Group, based out of Chicago.
The $67 million plan is outlined in a 67-page proposal with a 32-page cost-benefit analysis. That number does not include the cost to build the 81-home McBride subdivision, which is not part of the TIF.
Aside from the $17 million in TIF, the other $50.5 million cost for the Dierbergs development would be privately financed. The letter from First Bank promising financing said that a TIF is “necessary” for the project to move forward.
With the proposal in the hands of the 11-member TIF Commission, the panel is slated to meet virtually at 7 p.m. Thursday, May 27 to go over any questions. A public hearing is slated for June 17 either virtual or in person at Crestwood City Hall. The site will have to be rezoned for the development, and that zoning would likely come in August or possibly sooner at a special meeting, City Administrator Kris Simpson told The Call. So far, the developers have not officially submitted plans to the city.
A representative of Dierbergs did not immediately respond to a request for comment Tuesday morning.
The former mall, known at various times as Crestwood Plaza and then Crestwood Court, is located off Watson Road, just east of Sappington Road. For decades it housed an outdoor mall, then an indoor one. But the mall’s last stores closed in 2013. The site at the center of the city has been vacant ever since.
Three plans to develop the site have been proposed and dropped in the last seven years.
For comparison, past proposals for the site have ranged from a $104.3 million project planned by UrbanStreet that was granted $25 million in economic assistance, including TIF, that was never paid out because the mall was demolished but no other redevelopment milestones were met; and a $300 million plan from developer Walpert Properties that fell through last year that never made it to the TIF stage; and the $102 million redevelopment that was proposed by then-owner Centrum Properties in 2013 but rejected for $27 million in TIF assistance by the Crestwood Board of Aldermen. All of those projects were large multi-use proposals that would have been built on the entire 46-acre site.
To qualify for a TIF, an area has to be declared blighted. Brent Beumer, director of real estate for Dierbergs, gave a preview of the argument for a TIF at the last commission meeting in April. The property appears to be shovel-ready looking on from Watson Road, but when UrbanStreet demolished the mall in a yearlong process in 2016 and 2017, the chunks of concrete that were brought down were placed into the underground parking garage that had existed under the indoor mall, then dirt was trucked in and placed on top of that.The dirt itself does not appear to be useable and would have to be remediated. Instead of being a shovel-ready site, construction will require millions of dollars of preparation before the ground would be ready to build.
As proposed by Dierbergs, the TIF bonds for the project are estimated to retire in 15 years, although they could take up to 23 years by law. The calculation on the CID only counts funds from the sales tax during the first half of that 15 years, since the back half of the sales tax could be used to help retire the TIF bonds.
According to numbers in the report, which was compiled by PGAV Planners, the assessed valuation of the Dierbergs half of the site would increase by $7.6 million after redevelopment, above the $10.75 million of the 2020 assessed valuation. The report notes that the estimated assessed value for 2021 at the site has declined by 20 percent, but the report does not use that number since it’s preliminary.
Other than Dierbergs, no specific tenants are named yet. The redevelopment proposal lists up to 13 outlots that could be part of the redevelopment, including two outlots that UrbanStreet does not own and Dierbergs does not yet have under contract: The current site of City Music and Calvert’s Auto Express, both fronting Watson Road by the mall. Representatives of Dierbergs told the TIF panel that the company is in talks with the owners of those two sites and hopes to add them to the overall redevelopment plan.
The estimated costs to build the project are: $35.8 million in new building construction and $600,000 in marketing and leasing fees, which are not TIF-eligible expenses. The expenses eligible for TIF are: $9.83 million in land acquisition; $1.69 million in off-site development such as road improvements and traffic signals; $1.12 million in demolition and removal; $13.3 million in site work — parking lots, sidewalks, lighting, stormwater sewers and detention; and $5.16 million in professional fees and development overhead such as architects, engineering, surveying, legal, permits, planning, consulting, bond/financing costs and insurance.
That combines for the total estimated project cost of $67,537,000.
Simpson has been supportive of the Dierbergs/McBride plan for the site since the December announcement and said the redevelopment proposal solidified his confidence that this is the plan that will finally redevelop the long-vacant site.
“Even setting aside the impact that COVID has had and the changes it’s made on the market, we’ve obviously had going on 15 years of attempts to get this site developed — we’ve heard from numerous different entities how complex the site is and what a challenge it is to make it work,” Simpson said. “I’m really happy that we’ve got two local partners with the financial wherewithal and the capacity to carry this project out.”
See renderings of the past redevelopment plans for the mall in the gallery below:
