City leaders last week told economic development officials the proposed help would mirror past tax increment financing projects but would not be TIF because the mall is not in a redevelopment district and is not designated as a blighted property.
The proposed city help is not TIF but “feels and looks like that,” Assistant City Manager for Development Jeff Fleming told the Kingsport Economic Development Board at its monthly meeting.
The planned mall project, focused on a more than 500,000-square-foot property built in 1976, is going before the Kingsport Regional Planning Commission on March 20, Fleming said. Mall General Manager Kevin Harmon said Stephen Kriegel, senior director of development of Chicago-based General Growth Properties, is to be in town starting March 19.
GGP is managing and marketing the mall. GGP was hired by Texas-based mall owner Somera Capital Management.
KEDB is the conduit for $2.5 million going toward the Kingsport Pavilion retail development on the old Mason-Dixon trucking terminal site.
Under that agreement, which GGP is to review, the city is providing $500,000 a year for five years to help repay the debt for the Pavilion, which has more than 400,000 square feet of retail space.
The concept of TIF is that the increased property tax revenues on a redeveloped piece of property — or a portion of those revenues — go toward retirement of the redevelopment debt instead of going into local government coffers.
Without giving dollar figures, Fleming said the incentive package the mall is seeking is “very aggressive” and that city leaders would have to weigh the financial incentive given the retail center against the effect of the project being downsized because of less money being available.
Fleming said city officials have no desire for the mall to become blighted to become eligible for regular TIF.
“They have a very challenging project,” Fleming said. “They have to spend a lot of money on things you can’t see — like heating and cooling.”
Fleming said the project as planned includes some “wow” factors, including a new food court and community meeting spaces, as well as the addition of up to five outparcels.
The net increase in inside space for the mall is to be 100,000 square feet following some demolition work. Harmon said the expansions would be on the theater side of the mall and on the J.C. Penney section.
The mall’s Web site is www.kingsporttowncenter.com.
On other matters:
•Fleming said the Allied Health Building, set to open this fall, is under budget. As for the Higher Education Center, he said the bonds KEDB sells for it likely will have to be taxable since some of the space, although overseen by Northeast State Technical College, will be occupied by private colleges and a private retailer. Fleming said the retailer probably would be a Subway or something similar and that King College is among schools committed to the project.
•NETWORKS Chief Executive Officer Richard Venable said NETWORKS — Sullivan Partnership, a joint venture of Kingsport, Sullivan County, Bristol, Tenn., and Bluff City, this year so far has leads on 25 prospects representing 200 jobs and $79.2 million in investment, with hot prospects for the vacant Cofap, Tradco and Cartamundi buildings in Kingsport and the 1-million-square-foot America Phoenix building, formerly the Raytheon building, in Bristol, Tenn. He also said NETWORKS is studying an emerging biofuels technology that makes diesel from switchgrass, brush and wood byproducts.
•Bob Feathers, who heads up the KEDB’s Facade Grant Committee, said two applications to help renovate downtown storefronts are pending and will be up for a vote at the April KEDB meeting.