Economic Development San Marcos (EDSM) Executive Director Amy Madison said she couldn’t reveal the board’s recommendation to city council regarding a proposed $5 million city loan to set up an entertainment district at Springtown Center. Photo by Andy Sevilla.
By ANDY SEVILLA
The San Marcos City Council will discuss a redevelopment deal for the Springtown Center next Tuesday night, though city staff is keeping quiet on its recommendation.
In an emergency meeting of Economic Development San Marcos (EDSM) Tuesday, board members discussed at length in executive session the developer’s requests from the city in efforts to move forward with a proposed entertainment venue project for the Springtown Center.
The developers are asking for up to $5 million dollars in interest free loans, to be repaid through two decades. The first installment of $3.2 million is asked to be advanced concurrently with the developer’s purchase of the Target site, on which the city will obtain a first lien position. The developer also is requesting up to an additional $1.8 million to fund construction and installation of furniture, fixtures and equipment for a proposed Alamo Draft House, should the lease be executed. The city would also obtain a first lien on the theatre’s furniture, fixtures and equipment.
The developers proposed that the $5 million dollar loan would be interest free for a 20-year term, with monthly payments beginning three years after the initial loan funds are disbursed.
The EDSM didn’t publicly state its recommendation, leaving San Marcos residents in the dark about the board’s position, even though taxpayers may have to foot the bill, depending on what council decides.
“It came out of executive session,” said Amy Madison, executive director of EDSM, when asked about the board’s proposal to the city council. “It’s not a public matter at this time. It was a consensus that staff take a recommendation to council, but I cannot discuss what it is at this time.”
The developer is asking the city for a loan in efforts to purchase the Target site. Target has an Operating Easement Agreement (OEA) on the site prohibiting theatres, bowling alleys, night clubs and various other retail uses from developing on or near the property. The city has provided $6 million dollars in incentives for Target, J.C. Penny and Bealls to relocate to the newly built Stone Creek Center. For those tax abatements, the city was unable remove the development restrictions Target has in place at the Springtown Center.
“Here we are incentivizing Target to their new place, but they’re leaving us tied-up at Springtown,” said Councilmember John Thomaides, who also is an EDSM boardmember. “This is a very serious game. We’re talking about the taxpayers’ dollars.”
Thomaides said there was never a discussion of Target having an OEA and its restrictions on development at the Springtown Center when incentives for Stone Creek Crossing were discussed in council. Ultimately, he said, “the responsibility lies on the shoulders of the council.” Thomaides said he has advocated hiring an independent firm to fully evaluate these sorts of dealings, adding that in doing so these “mistakes” will not go overlooked.
“If we’re going to spend millions of dollars in incentives, why not spend $10,000 on a firm and have people that are experts look at the deal?” Thomaides asked.
Added Thomaides, “This is the failure of that Stone Creek deal. To not know that this OEA was in place (at the Springtown Center), and essentially being blackmailed.”
City Manager Rick Menchaca said he could not forecast the city loss in interest dollars on the requested loan.
“We didn’t run those numbers because we were waiting to see the recommendation the (EDSM) board was going to make to council,” Menchaca said two days after the EDSM board came up with its recommendation.
The city council will take up the matter at its July 7 meeting. Menchaca said it is on the council agenda as a discussion, consideration, and possible approval of incentives for redevelopment of the Springtown Center, although it was initially on the council agenda as a consent item.
Menchaca said the redevelopment proposal is not being rushed through council and is following normal procedure. He said that when the EDSM board reviews and considers a development proposal, it appears on the agenda at the following city council meeting.
“We’ve been discussing this for seven or eight months now, since it was initially presented to the city,” Menchaca said.
About 180,000 square feet of Springtown Center’s 210,000 square feet are vacant. The developer has suggested a movie theatre, bowling alley/entertainment center, family entertainment venues, sports bar/nightclub, and restaurants as possible uses for the Springtown Center. The developers aim to establish the existing center into an entertainment-focused venue with a variety of mixed use tenants. In a presentation, the developer articulated the need for a venue supporting the adjacency to the Texas State playing fields and game day crowds.
Menchaca said the proposal does not discourage entertainment development throughout the city.
“The downtown master plan does not preclude other areas (in San Marcos) from being entertainment venues,” Menchaca said.
In the EDSM presentation, the developer said there are several benefits to the project:
– It creates a development that brings a new mix of retailer/users to an older, declining shopping center;
– It increases tax revenue for San Marcos and San Marcos CISD;
– It creates an entertainment destination that appeals to the local community, Texas State’s student body, and visitors; and
– It benefits neighboring businesses that have seen a decline in business since Target and other tenants have vacated.
The developers said they will provide an outdoor pavilion or gathering area at the Springtown Center within three years after the effective date of the loan. The area would be privately owned, but made available for periodic public use. The developer has also agreed to hire local businesses in assisting with the renovation and redevelopment, as well as to continue leasing to current tenants during and after the renovations. It has also been agreed that 50,000 square feet of the center will have entered into initial leases for entertainment uses within five years after the effective date of the loan.Email | Print