Mayor puts his ‘cards out there’on Centrum’s proposal for mall

Economic assistance of $26.6 million for first phase too much, Schlink says

By Kari Williams

The Crestwood Board of Aldermen’s rejection of a resolution selecting Centrum Properties as the developer for the redevelopment of Crestwood Court begins the negotiation process with the mall’s owners, according to Mayor Jeff Schlink.

Aldermen voted 5-3 against selecting Centrum, which owns Crestwood Court, as the mall’s developer last week.

Ward 2 Aldermen Tim Trueblood and Bob Deutschmann, Ward 3 Aldermen Paul Duchild and Jerry Miguel and Ward 4 Alderman Dan Tennessen voted against the resolution selecting Centrum.

Ward 1 Aldermen Darryl Wallach and Mimi Duncan and Ward 4 Alderman John Foote voted in favor of selecting Centrum.

Schlink told the board he agreed with comments made by Sol Barket, of Centrum Properties, at a town-hall meeting earlier this month that this is a negotiation process.

“We’ve been pitched a deal, an offer, but we haven’t negotiated back,” Schlink said, “and I see that’s what we’re starting to do now, so that’s why I’m starting to put my cards out there.”

Schlink said though he is not opposed to the redevelopment or economic assistance, the amount being asked for — roughly $26.6 million for the first phase — is too much.

The proposed $102 million redevelopment calls for tax-increment financing, or TIF; a 1-percent sales tax from a transportation development district, or TDD; and 1-percent sales tax from a community improvement district, or CID.

The TDD and CID would raise the sales tax at the development — tentatively called the District at Crestwood — to 10.425 percent.

“I don’t like the idea of breaking the 10-percent sales tax barrier on this piece of property in the city of Crestwood,” Schlink said.

Resident Martha Duchild, wife of the ward 3 alderman, said the development will not attract people from outside the “immediate area of Crestwood” with a 10.425-percent sales tax.

“If you want to attract from the outlying areas, you need to be competitive …,” Martha Duchild said.

Paul Duchild also said he has an issue with Crestwood having the “highest tax-rate in the county.”

Pildes said it would be a piece of property with the tax rate, not the city. Paul Duchild said while he understood, “perception is reality.”

Schlink also noted city officials have to keep Lindbergh Schools in mind.

“The bottom line is that the impact is going to be felt by people not only within the Crestwood area, but the Lindbergh School District area,” Schlink said.

Chuck Triplett, assistant superintendent of finance for Lindbergh Schools, told the board school district officials would like to see commitments from Centrum for tenants and private financing that will take the project from an idea to completion.

“Right now, I don’t know that they have anything that they would guarantee us that they would not sell this property, or if they got the TIF, turn around and sell the property with the TIF, which makes it very, very attractive,” he said.

Triplett said the school district is committed to the “well-being and prosperity of Crestwood,” and what is good for the city is good for the school district.

“I can’t imagine coming before my board with a plan that does not have details, asking for millions of dollars in commitment and somebody saying, ‘Trust us. We’re going to do what’s best for you, just trust us with that,'” Triplett said.

Martha Duchild also noted Centrum’s partner for the mall redevelopment is Angelo, Gordon & Co., the majority investor for the project.

“(Angelo, Gordon & Co. has) $13 billion in property investments. This is their business. They buy and sell properties,” Martha Duchild said. “Their investors want to make money. They are not interested in the long-term success of this development.”

Paul Duchild also questioned the long-term commitment of Centrum and Angelo Gordon.

Pildes noted Barket’s family roots in the area, but also said he could not say how long the current owners will own the property.

“… Angelo Gordon’s goal is to create value for their investors,” Pildes said. “Nothing creates value in real estate like a development that is well built, well attended, is seen as being a desirable place by the customers, which is the community, which has long-term leases with credit tenants.”

Aldermen have made concerns about a lack of definitive tenants known at previous meetings, but Paul Duchild said last week if a business had interest in coming to Crestwood, they would be willing to publicly state their interest.

However, Pildes said Centrum had a “very successful” conference in Chicago, where they met with “several tenants” interested in the development. Pildes personally drafted three term sheets as a result of the conference.

“They’re large, national tenants that would anchor the development,” he said.

Pildes also said national tenants who will occupy a development like the District at Crestwood sign leases contingent to the developer “committing to a possession date for the buildings,” with penalties to the developer if that date is not met.

“So, clearly, we could not sign a lease today because it would have those penalties …,” he said.

Additionally, Jim Mello of Armstrong Teasdale said concerns about the quality and type of tenants are “legitimate,” but those issues are fleshed out in the redevelopment agreement.

Schlink said he can “get past” not having definitive tenants, but has a hard time getting past “the fact that phase two is more of a question mark than even the question marks we have for phase one.”

“The way I sum it up, it’s a gamble,” Schlink said.

Mello said there are no “definitive plans” for the second phase of the development at this point, but Centrum’s redevelopment agreement notes the possibility of eminent domain to obtain property on Watson Road — Firestone and City Music.

Mello said Centrum officials felt it was “absolutely transparent” to be clear if the right circumstances occurred, they could use eminent domain because if it is not in the plan, they cannot “exercise that at a later date.”

The “fundamental issue” to be decided, according to Mello, was whether there was enough vision presented that it was worth going to the next step. He also said the proposal is not set in stone and concerns about the proposal can be vetted in the next step of the process.

Miguel agreed about moving to the next step, but disagreed on what the next step could be, suggesting work sessions.

“I’d like to see more on this project than we have at the present time before moving it to a TIF commission,” Miguel said.

Mello said they will have as many work sessions as the city would like, but does not know why work sessions and the TIF process cannot occur simultaneously.

“I think we can do both at the same time and do both productively,” Mello said, “and I think our proposal, again, was as thorough as any proposal as you’re going to see as a starting point for going forward on a TIF proposal except for the rare instance where you have a single user that’s committed to the site …”

Paul Duchild said he views the redevelopment process as buying a car.

“You don’t take the first offer from the dealer. Some people might, but I don’t, and I think most people don’t,” he said. “I would like to find out what the developer can do with this property without tax subsidies. I think we deserve that much.”

The board also voted 7-1 to postpone the second reading of an ordinance approving Peckham Guyton Albers & Viets Inc., as the planner for Crestwood Court’s redevelopment. Duncan was in favor of approving PGAV.

Centrum Properties and Angelo Gordon purchased the mall from the Westfield Group in 2008. Redevelopment plans have been on hold due to the economy.