February 15, 2020

Mallory Herrmann

The Southside Plaza Shopping Center, a retail area at SW Blue Parkway and Third Street that is located within the 50 Highway Urban Renewal District, could soon be seeing some redevelopment.

The city council heard a presentation last week for a conceptual economic development incentive request for a community improvement district (CID) that would generate a 1% sales tax to help fund about $4.7 million in improvements. The CID request is for $1.4 million, or 29% of the total project cost, to be recaptured by the developer through the added tax over a period of 30 years.

Another recent blighted CID project, the Pine Tree Plaza retail area near 50 Highway and 291 South, was approved by the city with a term of 20 years for an approximate 25.9% of the project cost.

The Southside Plaza has 18 retail units with a combined total of 54,378 square feet of leasable space, and the average age of the structures there is 54 years. Five of the units, including two of the largest spaces, are currently vacant. The CID’s proposed boundaries do not include Johnny Ray’s, also located in the area.

In need of new roofing, sidewalks, parking, retaining walls and other repairs, Brain Dev 3, LLC, is proposing a series of improvements they hope will boost the occupancy rate, rental rates and tax revenues for the city.

Councilmember Bob Johnson was concerned about some of the soft costs included in the request, such as snow removal, landscaping, security and insurance. He suggested that those should be a function of ownership, not expenses to be funded by taxpayer money.

Mayor Pro Tem Lopez agreed, adding that 30 years seemed like too long for the size of the project and suggesting that the term of the CID and the approved expenses should be negotiated.

Mark Dunning, assistant city manager, reminded the council that it’s the developer’s responsibility to certify the costs of the redevelopment and to ensure they’re attracting shoppers in order to generate that additional sales tax funding.

“The risk is on the developer to get the tenants into the space to generate the revenue to reimburse themselves,” Dunning said.

Dunning also noted that because this project is largely limited to the façade of the buildings, the developer may not be required to submit a preliminary development plan and go through the public hearing process. Unless the proposed design plans, which have not yet been finalized by the developer, require modifications of the city’s design standards or include substantial changes (such as an increase in total floor area by greater than 25%), the plans would be submitted only for administrative approval.

Mayor Bill Baird stressed how important the 50 Highway corridor is to the council and that it’s a big priority to ensure it looks good.

Councilmember Diane Forte agreed: “We’ve got to realize how important redevelopment is.”

As a conceptual request, the developer hoped to get feedback from the council before pursuing a formal application for the development incentive. City staff will work with them to adjust their request, likely regarding the term length and the inclusion of eligible expenses, before returning to the city council for a public hearing and formal consideration.

The council voted unanimously to proceed with the request. All councilmembers were present for the Feb. 4 meeting.