City Finalizes Mall Financing Plan – InkFreeNews.com
By Dan Spalding
WARSAW — Plans advanced Monday, May 2, to finalize funding that will allow the city to provide $1.4 million to help renovate Warsaw’s Marketplace shopping center.
This money will be repaid with new anticipated tax revenue as the mall undergoes extensive refurbishment and secures new retail tenants and sees a significant increase in assessed value.
Sullivan Wickley, a Georgia company that acquired the commercial property a year ago, is investing around $12 million and already has two tenants — Big Lots and Planet Fitness — locked into leases. Announcements for two more stores are expected in the coming weeks.
On Monday afternoon, the city’s redevelopment commission unanimously approved a resolution that allows the city to use new tax revenue created by the improvements to pay off a bond through the Lake City Bank, to provide Sullivan Wickley approximately $1.4 million which will go towards renovations.
On Monday evening, the Warsaw City Council approved a final vote that will allow the city to seek economic development bonds.
Randy Rompola, a partner at Barnes & Thornburg who acts as a bond adviser, told the redevelopment commission on Monday May 2 that they expect to close the bond issue on May 12.
The city is seeking funding of approximately $1.7 million. The additional $300,000 is needed to cover finance charges and interest.
The transfer of money depends on the percentage of leases filled, he said.
Under the plan, the promoter is responsible for making up any shortfall in projected tax revenue needed to pay the bonds in the first five years, starting in 2024.
The redevelopment commission would then be responsible for any shortfall for the next five years and use other funds raised through a tax increment district.
Lake City Bank would be responsible for the risk over the next ten years.
If the increase in assessed value exceeds what is needed, that money could be used to repay the bond sooner than expected, he said.
The release of the city’s money depends on securing the leases. The agreement provides for Sullivan Wickley to receive the balance of the bond proceeds with the signing of additional leases, Rompola said.
They have 30 months to sign the leases, he said.
Sullivan Wickley officials said their goal is to complete renovations and have most storefronts filled with tenants by the Christmas shopping season.
Town resident Roxanne Coffelt attended the meeting and asked for clarification on the money that would be used to fund the bonds. After learning that TIF money from the property would be used, she said she was less opposed to the plan.
She expressed concern about the future of two other malls nearby.
The MarketPlace property was rapidly entering a downward spiral with numerous departures in recent years before the sale to Sullivan Wickley.
Jeremy Skinner, the city’s director of economics and development, said the property had lost 41% of its estimated value in five years.
He said the city has spoken with several potential mall buyers and all are seeking public support for the renovations.
Interior renovations have already begun on the west side of the building where Pier 1 Imports was located.
Big Lots will be on this corner location and is expected to open this summer.