Mall Owners Seek Tax Increase To Raze Portion of Vacant 4-Year Old Anchor Location
In the late 1990s Australian based Westfield Group got a dandy TIF (nearly $30 million) to rebuild West County Mall — claiming it was outdated and unable to compete with newer malls. The suburban community of Des Peres, with well heeled residents, agreed and blighted the old mall.
Reopening in September 2002 the expectations were high but a year later in September 2003 sales were under projections. From the Post-Dispatch of September 14, 2003:
…a year after reopening to much hype, West County Center is yet to prove whether it can prevail in a high-stakes battle for the affluent shoppers of west St. Louis County.
In its first year, West County Center has struggled to capture the sales expected of it, according to figures from the city of Des Peres.
Analysts and retailers say the 1.3 million-square-foot mall, the area’s third largest, has been hurt in the struggling economy and by stiff competition from established high-end malls, namely the St. Louis Galleria and Plaza Frontenac.
Sales for 2003 will be down about 26 percent from original projections, according to the city.
In 2006 Federated closed numerous Lord & Taylor locations, including the one at the Galleria and West County Center (Biz Journal). Earlier this year Westfield and Tennessee based CBL formed a partnership that included a number of area malls, including West County Center.
So now this new partnership wants to create a community improvement district. From today’s Post-Dispatch:
CBL Properties, the new owners of the shopping center, plan to demolish half the building to create a restaurant village with four to six dining establishments and a courtyard in the center. The upper half of the remaining building would be a large bookstore and the lower half would have small retail shops.
The improvement district would impose a 1 percent sales tax on stores in the mall, except for anchor stores Macy’s, Nordstrom and J.C. Penney. The sales tax is expected to generate $10 million to retire notes or bonds issued to finance the project.
A public hearing will be held Dec. 10 on the request for the district, the redevelopment plan and conditional use permits.
Wow, when will these folks ever stop? So I’m now supposed to pay an extra cent sales tax on purchases at the Apple Store so they can fund the latest re-working of the failed indoor mall concept? Meanwhile, purchases made at one of the three anchors would be a cent less than in smaller stores in the mall? And what “community” is this district to improve? Are we calling a privately owned mall a community now? The owner of this mall is not destitute — let them borrow the money needed to rebuild as they see fit.
Perhaps this a true signal of the failure of current planning policies. If this is not considered how many more of these centers will be bailed out?
While intense competition is no doubt a factor, it is truly not a community. This is a major consideration in it’s demise. Many shopping centers succeed only because the surrounding population has no alternatives.
It should be a good lesson for urban St. Louis not to follow the suburban model. The city needs to create an identity beyond the Arch, and recognize the many failures of suburban models. Community is one of them.
Finally I am puzzled by the ongoing give away to the wealthy. The whole taxing system is awry. If something to benefit the citizens is brought up, such as health care, all of a sudden it is too expensive, too socialist, and “these people should pull themselves by their bootstraps”.
Yet projects such as West County Center keep getting rubber stamped with ease but you never hear; too expensive, too socialist and the demand for personal responsibility being voiced either in the press, by politicians or by various commentators.
I almost thought steve, “why do you care what happens west of 270?” but W. County mall isn’t west of 270. Holy Toledo, this is fubar. A restuarant village (cheeze cake f. & apple beez?) with 4 to 6 eatz surrounded by asphalt is retarded and has no personality. May be if I had Hyundai SUV, wore jeans and white sneakers, kept my wallet in my fanny pack and my cell on my belt this would seem like a good idea, then again, I want to get laid some time in the next ten years and that’s how long I’d have to wait if I took a date to that place. God bless the business owners who “get it” and realize the indoor shopping malls isn’t what people with dignity (usually cohabitates with cash, manners, & charm) desire.
at least they are eating their own in this case. if these shop owners want to tax their customers to support improvements. more power to them…..strikes me as self defeating at the stl earnings tax.
I agree, Southside Tim. The only people this hurts are the owners of the many smaller shops in the mall. Frankly, if I were one of them, I would be either suing or moving, more likely the latter. It really stinks that they will give the big biz anchors a break and pick on the small guys.
The reason West County is failing is due to the absolutely terrible parking garages that shoppers are forced to park in to shop there. Words can’t describe–literally–how poorly designed the traffic flow is at this mall. Whether it’s stop signs painted only on the pavement (no red octagon) or the narrow, impossible to navigate safely with an SUV roadways, I actually shop at West County LESS than when it was in its original incarnation. There’s just so many times I can handle almost getting hit by a Chevy Armada SUV before my family and I stopped going to this monstrosity.
Don’t dismiss this because it’s “way out there”. This is a fundament and growing problem with development and taxation throughout the region. It sets/expands a precedent. It makes government become a landlord, including all the risks as well as all the “rewards”. It pits cities against each other, for no real net gain. It puts businesses in the same community in unequal situations through direct government manipulation.
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The developer is asking for, and will likely receive, this. I don’t blame the developer for asking, I blame the government for granting. It serves no useful governmental purpose and it harms free competition. It also “hides” higher prices from the consumer, making it harder to comparison shop.
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Old School – Developer borrows money, builds something, attracts tenants, collects rent. Tenant charges for product, pays overhead, keeps the difference as profit.
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New School – Development district borrows money, gives it to the developer to spend, imposes (in this case) an extra 1% sales tax, raising the current total sales taxes from, what, 7+% to 8+%. Developer borrows a lot less money, builds something new, attracts new tenants and can either offer lower rent or pocket more of a higher rent. Tenant still charges (the same) for the product, pays for overhead, and keeps the difference. And the customer gets to pay 1% MORE to buy the same product post-remodel as he or she would’ve pre-remodel, a.k.a. gets screwed!!!
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I might just try and make it on the 10th (if I can figure out where) to see how all this plays out . . .
Ever tried taking a stroller or wheelchair from one level to another? Apparently they forgot elevators until the end, or just decided to screw anyone with wheels. If you are in the center of the mall, you are forced to walk all the way back the entrances to use an elevator to get to the store that is right above or below you. It’s like a suburban sprawl neighborhood design right inside the mall. What’s next, cul-de-sacs inside the malls? Someone else must have noticed, because they appear to have TWO segues for the mall cops.
I see these malls slowly falling. Just as sure as the inner ring suburbs become less desirable, and are vacated for newer, but just as cheap and crappy dwellings.
Suburban development models are a cash cow, because developers AND their customers (residents) are looking for the next thing- Just on a much slower rate than say fashion.
The most glaring example that I see often is in Brentwood where my brother lives. His house is say, 3 years old, surrounded by mid century homes of the 40s/50s, but now the clientèle is too “sophisticated” for these simple small homes- TEAR DOWN, REBUILD!
Where the old homes can’t get over 180k- the new ones are hovering below 400k. Developers win and the guy that owned that house forever looses.
The sad thing is, that there’s so much money in this machine, that it’s not stopping. people can tear down and rebuild, or move out to more desirable locations near New Town!
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andrew – I live in a house from the mid 40s, and enjoy a wonderful home of quality which can’t be found in new construction. However, I also understand why small homes in desirable areas are being torn down. If rich people want to live near Clayton, and they don’t want to live in 1,200 square foot homes, they are going to tear them down and build bigger ones. If they are tearing down 1,200 square foot masterpieces designed by a famous architect, that’s horrible. If they are tearing down 1,200 square foot homes built with a cookie cutter design for working class occupants, which have obsolete plumbing and electric, and which may have tens of thousands of dollars in deferred maintenance, but also happen to be sitting on land which is a half mile from the Clayton business district, that’s ok. If they rebuild larger homes that preserve the urban nature and respect the design heritage of the community, that’s fantastic.
Andrew & Nick – In a way I agree – If you own it, you should be able to improve it or tear it down and start over, whatever. Where I draw the line is when you ask me to pay for it through increased taxes. What the Mall is asking for is a public subsidy for a viable business. There are businesses in the Mall (whose customers will be paying higher taxes) who won’t be near the remodeled area. There are businesses near the Mall that may receive reduced or deferred services because bonding capacity is tied up on this project. And my biggest concern is that there is no way to correlate, for the taxpayers, a return on their investment. If the city wants to increase the sales tax, either at the mall or citywide, and it can generate $10 million doing so, then why not spread the largesse citywide, instead of paying off an investment the developer is very likely going to make anyways?!!!
I hope you also take the developers of the condos in the historic buildings in downtown St. Louis to task as well. They, like the owners of the mall, are not destitute. Yet, they received over $80 million in state tax credits in 2005 — that’s $80 million that the state of Missouri, which is not exactly flush with cash, will forego collecting from those the credits are sold to.
At least the CID tax is focused on the shoppers who use the mall sought to be “improved” whereas the historic tax credit effectively taxes every taxpayer in Missouri — many of whom will never see the benefits of the rehab of historic buildings.
Municipalities will continue to do this until the State of Missouri makes TIF illegal for malls, as it has done with restaurants and casinos.
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