MainStreet at Sunset still viable, Browne says, but city’s mayor disagrees

Novus president attempts to convince Hunzeker project still viable

By BURKE WASSON

Nearly a year after the Novus Development Co. lost funding for the proposed MainStreet at Sunset shopping center in Sunset Hills, company President Jonathan Browne still believes it is a viable project.

But as Browne discovered last week in a meeting with Sunset Hills Mayor John Hunzeker, a majority of the city’s elected officials — notably Hunzeker himself — disagree.

Hunzeker said he and the city’s aldermen are unlikely to make any significant improvements to the quality of Sunset Manor until a condition assessment of the subdivision is completed. The mayor said last week that the report — essentially an inventory of the Sunset Manor subdvision — is expected to be finished by Sept. 1.

The city’s Board of Aldermen did, however, take steps last month to improve the condition of 15 of the more than 250 homes in Sunset Manor by agreeing to participate in a grant program. Aldermen voted 6-1 on June 27 to approve an ordinance for a Municipal Housing and Community Development Cooperation Agreement set forth by the U.S. Department of Housing and Urban Development and administered by St. Louis County.

The grant funds will provide $5,000 each to five homes in 2007, five homes in 2008 and five homes in 2009. Only homeowners who earn less than $50,000 per year for a family of four qualify for the federal grant funds.

Rosanne Stein, who has lived in her Sunset Manor house for 14 years, said while she believes aldermen still have plenty of work to do in Sunset Manor, the block grants are at least a step in the right direction.

Stein herself will benefit from the program, as she said she expects her $5,000 grant in 2008.

But besides the general maintenance work like plumbing and electric improvements that the grant funds will go toward, Stein said she and other residents would like to see aldermen change zoning in Sunset Manor to get rid of some blighted homes in the subdivision while also keeping the neighborhood residential.

“They (aldermen) are also well on their way to changing some zoning ordinances to make this possible for if someone wants to buy the shack across the street from me, tear that puppy down and build a new one,” Stein said. “But the zoning laws need to be changed, and they’re in the process of taking care of that. So I think that they’re doing everything that they legally can at this point.

“They could also — once this is fixed up — they could help promote the neighborhood to outside people so we feel safe again. You know what I’m saying? This is a great place to live. It’s affordable and one of the only affordable neighborhoods left,” she added.

But Browne said he does not believe the mayor or aldermen have adequately addressed residents’ concerns, which is why he met with Hunzeker last week to try to convince him to have Novus go forward with the project.

“I think that the mayor and the board, if they collectively support him, are being very insensitive to the well-stated, well-documented needs and wishes of the people over there (Sunset Manor),” Browne said. “Instead, they choose to focus on one person — me, the developer, and how I’m always going to make millions. I love it when they say that. I wish I could be so guaranteed. But there are 300 property owners over there that have a voice in this thing, and I think they’ve been ignored.”

Browne’s plans for the MainStreet at Sunset shopping center at Sunset Manor’s site essentially died in August 2005 after Novus learned that its lender had withdrawn funding for the development.

The Board of Aldermen in May 2005 approved Novus’ request for $42 million in tax-increment-financing, or TIF, to help fund a $165.2 million shopping center at Interstate 44, Watson Road and South Lindbergh Boulevard. The pact with Novus also included $20 million in transportation development district, or TDD, reimbursements. The project would have razed 254 homes and several businesses.

The Board of Aldermen also authorized the use of eminent domain to acquire those properties that Novus did not have under contract.

In late January, St. Louis County Circuit Judge Gloria Clark Reno ruled that the Board of Aldermen did not comply with state law in May 2005 when it adopted the two ordinances related to the Sunset Manor redevelopment project. Aldermen voted unanimously Feb. 14 to adopt an ordinance repealing six ordinances related to the redevelopment project.

Now that the city has a new mayor and four new aldermen in place after the April election, Browne said he hoped he could convince them that Sunset Hills still could benefit from Sunset Manor’s redevelopment with Novus.

But as he found out last week, Browne said even though he remains optimistic that Novus can complete its work at Sunset Manor, he does not believe Hunzeker shares that feeling.

“I will tell you if I had to put one word on the meeting (with Hunzeker), it was punitive,” Browne said. “He wanted to tell me that I didn’t know what I was doing, I could have never done it, what was I thinking to even try? And I don’t know if that’s his own insecurity being in the same business. I don’t know.

“Maybe he could never conceive of trying to do something like this. So since he couldn’t do it, who was I to think that I could do it? And I was like, you know, man, what’s that have to do with anything? That’s why I’m here to show you that we have commitments from tenants. It’s not about me. It’s about the tenants. I’m not going to build an empty center and put a for-lease sign on it. You have to have those people lined up ahead of time.

“And I kind of thought being in the business, or that’s what he claims is that he’s a developer … Quite honestly, I think he’s a broker that bought some properties. And that’s different. But it was like he wanted to prove that he was right. ‘Well you can’t do this, and the way that I prove that I’m right is make darn sure you never do it. See? I’m right.’ And I thought: ‘You know, you’re running a city. You need to get yourself down about three notches and put the interests of your constituents and the economics of the city ahead of your own personal feelings.’ So I didn’t come away feeling like I’d met a great man or resolved any problems.”

Hunzeker has said that he knows there is much more work to do in Sunset Manor and that he and aldermen plan on addressing those issues after the condition assessment of the subdivision is done by September.

But the mayor also said that after his “incredible meeting” last week with Browne, he is confident that the Novus president was not the right developer to choose for Sunset Manor.

“It just took a lot of hutzpah for the guy to come in and say: ‘Hey, let’s go back to where we were before,'” Hunzeker said. “And he blamed everybody but himself for what had occurred a year ago. And I thought: ‘You are a fool.’

“The city did everything that they said that they would do. I mean, they passed the ordinances, they established … got the TIF deal set up, got bond counsel review, had everything done that they had to do. He was the only guy that didn’t do what he was supposed to do and yet he can’t stand up and say: ‘I screwed up.'”

Browne repeatedly has said that he had enough funding for the project set aside, but that the city of Sunset Hills essentially bailed out on him and caused the project’s demise.

“You can’t say it’s not viable or we don’t have the money,” Browne said. “You can’t say that. What you can’t do — and I don’t care if you’re Bill Gates — you can’t take $60 million out of a $200 million project and it still work. So what was missing before was the TIF and TDD contribution. That’s why it collapsed. I had my construction loan. I had a $108 million construction loan. What we didn’t have was the TIF/TDD portion.”

However, Hunzeker said that he asked Browne last week how much more money he would have needed for the project and concluded that the Novus president was not right for the job.

“I said: ‘Jonathan, how much money did you need for that first phase of the land acquisition?'” Hunzeker recalled. “And he said $22 million. And I said: ‘Jonathan, that’s why you are the wrong guy for this project because you couldn’t even come up with $22 million.

“You know? Everybody thought you were a big boy. But you’re not.’ If you’re going to do a deal of $180 million and you’re stumbling over $22 million and you can’t put $22 million on the table and he had 60-day notice because he knew in June, then he’s a lightweight.”

Browne said he regrets the outcome of Sunset Manor, but also believes that the media have unfairly criticized him for the project’s failure. He points to current projects, including a development he is heading in Rock Hill, as proof that he runs a quality development team.

“What’s the media doing?” Browne said. “The media is just dying to see this happen again. And I want to say: Why? You want the whole economy to go to hell in a handbasket? Who’s going to advertise in your paper? How are you going to pay salaries? That’s the connection that I get that they don’t get.

“I’ve enjoyed trumping the media and saying: ‘You know, you guys wrote all these stories of I don’t have financing. Here. Look. Here’s the commitment. Go write an article about that.’ Of course, they won’t say anything. They’re not going to print good news … It (negative media coverage) had everybody overly concerned about scrutinizing documents over securitizing their position. Yes, it’s had an impact. I think I probably put twice as much cash into the Rock Hill project than I should have ever had to under normal circumstances. But it’s just the mood. ‘OK, we’re going to make the loan, but gosh, didn’t he garner up some nasty articles? We better ask for more collateral.’

“That was aggravating, quite honestly. But we just sat down and said: ‘We’re going to do it and build a project and there it is right back in your face. You were wrong.’ Yes, we are successful. We can do it. It was happening. And this very thing could have happened in Sunset Hills. My biggest, you know, I-told-you-so will be doing a great job in Rock Hill and saying: ‘Look there, Sunset Hills. That could have been you.'”

Hunzeker remains optimistic that Sunset Manor will flourish again and that he and the board will improve the subdivision. At the same time, he said he wants to be fully educated before he makes a decision, which is the reason for the condition assessment.

“I don’t think it’s fair to the residents in terms of their property value for the entire city,” Hunzeker said. “I don’t think it’s fair to the city. I think it screws up our reputation and our brand. And that’s not right. I don’t want to make such a big deal out of it that it’s me vs. (Browne). But at some point, there’s going to be a day of reckoning about that property.”