Methods to improve Crestwood mall are wide open

City won’t rule out use of eminent domain at mall

By BURKE WASSON

As a request to redevelop the Westfield Shoppingtown Crestwood will be voted on this week by Crestwood aldermen, the methods to improve that property are wide open.

Language indicating the city would be open to a mixed-use redevelopment at the mall site was included last week in the proposed request for development proposals, or RDP. Aldermen were set to vote on that RDP Tuesday night — after the Call went to press.

Additionally, aldermen discussed during an Aug. 21 meeting various ways to handle the mall property, including eminent domain and condemnation.

While the city is prepared to send the RDP to 82 prospective developers and officials are open to various redevelopment methods, City Administrator Frank Myers said he would prefer to have the mall redeveloped in phases to maintain sales-tax revenue.

“It is not uncommon for a developer to take a property like that mall and develop a phased redevelopment process where they would take a portion of it and build something new and five, 10, 15 years out, plan to redevelop the whole site,” he said. “But phase it and transition it to where you still maximize your revenue from the tenants you’ve got over time …”

Revenue collected through the city’s 2.5-cent sales tax at the mall, which accounts for one-third of Crestwood’s overall sales-tax revenue, has dropped from $3.73 million in 2002 to $2.3 million in 2006.

And with news that Dillard’s will close by Oct. 20, Myers estimates the city will lose an additional $300,000 to $350,000 in sales-tax revenue this year.

But even with that loss of revenue, consultant John Brancaglione of Peckham, Guyton, Albers & Viets Inc., said the pending closure of Dillard’s could actually make it easier for a phased redevelopment of the mall.

“In some respects, while I recognize it’s not something that’s beneficial to the city, probably one of the best things that could happen to that mall was in fact for Dillard’s to go away,” Brancaglione said. “Because it allows for the end of the mall and the parking garage, which has issues as I understand it, significant issues, to be redeveloped without having to disrupt. In other words, the rest of the retailers can stay fairly intact and operate while that part of the project is being rebuilt.”

As for what kind of redevelopment will be included at the mall, Ward 2 Alderman Steve Knarr indicated last week that he does not want to rule out sustainable alternatives to retail at the mall site like a convention center, office buildings or even housing.

“When Crestwood Plaza was built and Northwest Plaza (in St. Ann) was built, they were open-air shopping centers that were reinvented as closed malls in the ’80s,” Knarr said. “And now we’re talking about reopening them again for lifestyle centers. And I guess I’m just a little concerned if we go down this road with a full redevelopment of the site as retail only that there will be another board sitting here in 15 or 20 years going through this same project again.

“So, for the long-term health and welfare of Crestwood in general, I guess my question is have you (Brancaglione) considered any other mixed-use concepts on the site that, number one, would not necessarily tie us into a fully retail development that is going to have to keep up with the Joneses, so to speak? Secondly, because we’re going to have to compete with more and more retail development that’s going on every day … everybody’s fighting to go for smaller and smaller slices of the pie. And I guess my concern is what about a combination of retail and maybe a convention hotel? I’d like to be able to give the Viking (Conference Center in Sunset Hills) some competition. What about housing? I think some new housing would attract younger people to the area. We also need some elderly housing for the folks we have reaching retirement age. What about office space?

“What about bringing in daytime population that can shop in this center, shop up and down Watson Road? Maybe generate some additional development along Watson Road because of the additional daytime traffic that it would draw to the site …”

While Brancaglione said the mall’s location does not lend itself to a residential nature, he would not rule out an office development at the mall’s site.

As Knarr pondered the various development options the city could have at the mall, Ward 4 Alderman Steve Nieder questioned the need to issue an RDP to developers and what would happen if the city did not.

“Let’s take the opposite scenario and let’s say we not do anything at all,” Nieder said. “We don’t need to go out and ask for any of these proposals. But our true fear is this impact that mall has on our revenue source. That’s what it’s all about. So what’s the harm in just letting this play out between Westfield, the marketplace and developers and us not interfere until that play has been made?”

“The revenue continues to decline and the condition of the mall continues to decline,” Brancaglione said. “I guarantee you that will happen.”

“OK,” Nieder said. “So we’d find other ways to negate the impact of the revenue decline at the mall or from the mall.”

“Well, yes,” Brancaglione said. “And the other thing you have to be cognizant of is it could decline enough or, in other words, what will happen is as tenants go, the property owners’ ability to maintain the property on a profitable basis goes … The net effect of that is that at some point in time it would become even more costly to redevelop it because there will be so many more issues to deal with …”

Ward 4 Alderman John Foote said because Westfield has neglected the mall for a period of time, he still would not rule out eminent domain.

“It would seem then that a part of the problem is neglect by the owner and not keeping up the investment within this area,” he said. “So if we’re talking about what the price of the mall is as it continues to decline, maybe the easiest way is condemn it and go for eminent domain and that would put a very low price on it.

“Now that’s a harsh, hardball tactic. But what we’re at here is a position where we want to see that mall brought back into viability. We’re willing to work with the entities and with developers.

“But we would like to do this at a reasonable cost because if we do not, the chances of our getting our money back over time are somewhat in doubt because of the high competitiveness of retail all throughout the areas. So I don’t think we should ignore any possible avenue to getting the best, lowest price on this for potential development.”