Saturday, May 13, 2006
Mall owner may receive incentives for District
Jenny Kincaid Boone
Jenny reports on the latest news on the Roanoke Valley retail industry.
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Valley View Mall's new lifestyle center may get some funding help from the city of Roanoke.
But the potential incentives infusion isn't as large as the $9 million chunk that the city has promised the developer of another Roanoke retail center that will include a Ukrop's Super Market.
On Monday, Roanoke City Council will vote on whether to give CBL & Associates Properties, the Chattanooga, Tenn.-based company that owns Valley View, $1 million in city incentives over a five-year period for construction and renovation costs. To get the $1 million, the District at Valley View, a 76,000-square-foot planned outdoor retail center, must generate more than $550,000 in tax revenue each year for five years. If the development exceeds the $550,000 annual target, the city will give CBL half of the revenue from that year, not to exceed the $1 million total.
The District at Valley View is planned for a portion of the mall's parking lot, near the entrance to the food court and stretching from J.C. Penney to Sears. It will include at least 10 retailers and restaurants. Carrabba's Italian Grill, Panera Bread, Abuelo's Mexican Food Embassy and Barnes & Noble, which will be located in the former spot of the mall's movie theater, so far are the only announced retailers that are a part of the lineup.
In exchange for the $1 million in incentives, CBL must complete demolition at the District site within 12 months from the time that the council approves the funding. CBL also has to have at least six retail establishments open within 18 months of the agreement, or by October 2007, to be eligible for the incentives.
CBL's total development costs are $17.4 million, according to a letter from Darlene Burcham, Roanoke city manager, to council members about the incentives agreement.
Brian Townsend, the city's planning, building and development director, said CBL asked the city for the additional funding for the project, and the company came up with the $550,000 revenue projection.
"Our response [to CBL] was to show us. ... Show us who you're bringing here and what the projection is for revenue," Townsend said.
A CBL project manager for the District, Marc Munago, did not return calls for comment about the incentives.
The $1 million is a far cry from the $9 million in incentives that the city plans to give IMD Investment Group, the developing company for Ivy Market, a retail center that is being constructed in the area of Wonju Street and Franklin Road in Roanoke. It would include Ukrop's, a grocery chain based in Richmond, and a Walgreens drugstore.
Both Walgreens and Ukrop's must be open for business by Nov. 18 to qualify for the incentives. In the agreement, the city would give Bland Painter III, the owner of IMD, $600,000 annually for 15 years once Ivy Market produces $600,000 in property and sales taxes.
The development's timetable for meeting its November deadline could be tight. Construction and other delays have set back the project on more than one occasion, and completion schedules have changed several times, with the current projection being for an opening in the fall.
Townsend and Bev Fitzpatrick, Roanoke's vice mayor, have said they are confident that Painter's project will meet its deadline.
But IMD can receive more incentive money than CBL because of development costs and challenges at the Ivy Market construction site, Townsend said. There are some environmental challenges at the site, including its location in a flood plain. The area also was undeveloped and involves building a structured parking garage, Townsend said, adding that the two retail projects cannot be compared.
To decide on incentive amounts, "we look at what are the costs that are extraordinary, and what makes their development costs different from when they are building on an undeveloped field," he said.
The District, on the other hand, is being built on already developed land, but that land is underutilized and still has some infrastructure challenges, Fitzpatrick said.
With some of the most recent incentives that the city has given to retailers, "the common theme has been taking unusable land and making it usable and taking land and intensifying its utilization," Townsend said.
Fitzpatrick said he was in favor of incentives for the Valley View project.
"Generally speaking in order to promote the kind of development you need in the 21st century, more of your prospects will ask for some form of incentive," he said.
A copy of the performance agreement between the city and CBL lists the areas of construction work that are planned at the new retail center. It lists Maggie Moo's Ice Cream near other tenants in the build-out.
But more details about whether this ice cream shop will be located at the District were not available.
There is a Maggie Moo's location at Townside Festival Center on Franklin Road in Roanoke.
