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Southgate Development Co. wants to sink $7 million in improvements to southeastern Iowa City, contingent upon support from city officials.
The Iowa City developer is looking to improve customer friendliness at its 22.5-acre mall complex along U.S. Highway 6 and Broadway. Southgate, 755 Mormon Trek Blvd., owns K-Mart, the Press Box, and Big Lots and is also partial owner of the Pepperwood Place mall. Developers hope the proposed improvements will attract tenants to the mall, which is 34 percent vacant.
"We lost a lot of pedestrian traffic when Best Buy left," said Glenn Siders, a Southgate construction coordinator. "Then Econofoods left, and we lost more. It's a domino effect."
Southgate is working with engineering firm Shive-Hattery Inc., 2834 Northgate Drive, on plans that include redesigning and resurfacing all the parking lots, updating the lighting, new exterior canopies for the Pepperwood Place and Big Lots buildings, new landscaping, and new islands. The developers are also proposing a new entrance to the area, on land worth $8.8 million, directly off Highway 6.
"Southgate is willing to make a substantial commitment to this area," company Vice President Teresa Morrow wrote to the city on Feb. 10. "We hope the city of Iowa City will consider doing the same.
"In the letter addressed to Iowa City Economic Development Coordinator Steve Nasby, Southgate officials requested special tax-increment financing designation for the property, which means the city would rebate taxes it collects on improvements to the area. Such rebates are based on the land's value.
"We believe the access, site and building improvements will assist in returning the area into a viable retail center," Morrow wrote.
City councilors say they're aware of the troubles at Pepperwood Place and that Southgate's proposal merits discussion. But some are reluctant to add a ninth special-tax district in Iowa City.
"We have been very judicial," said Mayor Ernie Lehman. "We have used [the tax designation] very little.
"The area has experienced some vacancies, and it has been difficult for it to get leases," he said of the Pepperwood Place mall. "So it definitely qualifies for consideration.
"However, Lehman, who serves on the Economic Development Committee, which will review Southgate's plans Feb. 20, said he is concerned that the proposed improvements won't raise land value and therefore won't significantly increase tax revenue.
"It looks as though the improvements they have in mind are site improvements rather than building improvements," he said. "I don't know whether or not site improvements add to the building value."
Echoing Lehman's sentiments, Councilor Irvin Pfab said he is also waiting for more information, adding that he's hesitant about doling out more money to the company.
"I am very interested in the plan and will look at it closely, because the devil is in the details," he said. "I will be asking a lot of questions. That area is a high-intensity population area, and those people are not being served."
Should Southgate not receive the tax designation, it will likely go back to the drawing board, Siders said.
"It would set us back a bunch, but I would like to think the city is open to [the tax district]," he said.
By Inga Beyer
The Daily Iowan
February 17, 2003 |
