July 21st, 2009
Springfield developer could change plan

STAFF REPORT

Expect some change in the Springtown Center matter at the San Marcos City Council meeting Tuesday night before the council takes up the matter in open session.

It remains on the agenda for the council to hear a presentation from Lamy-Springfield Mall, Ltd., the developer, about the plans for the redevelopment.

However, sources indicate that Lamy-Springfield wishes to re-work the project, perhaps to address concerns of downtown business owners who have expressed displeasure that the city would offer incentives to direct competitors in the bar and restaurant businesses.

Brian Montgomery, President of the Downtown Association, said he spoke Tuesday afternoon with a project planner about the developer’s intentions.

Said Montgomery, “To my understanding, they are re-addressing this project with their bankers to see if it can be packaged in a different manner but also potentially being able to work with our downtown people to see if we can create some synergies between downtown and Springtown, which really was what should have happened in the first place.”

The Tuesday night agenda calls for the council to hear a presentation, discuss the proposal and, perhaps, even approve it at Tuesday night’s meeting.

Economic Development San Marcos (EDSM), the city’s economic development board, forwarded a new proposal to the city council after meeting last week. EDSM has not indicated if it recommends approval or denial of the proposal.

The proposal calls for the city to issue a $3.9 million loan, payable in six years, at an interest rate calculated by the “city’s cost of funds” plus one percent.

That cost is unclear. However, the city issued four sets debt instruments last month totaling about $50 million. Two issues totaling nearly $28 million over 20 years went out for rates of 4.61 percent and 4.46 percent. Two other ten-year issues to refinance nearly $22 million of old debt went out at 3.39 percent and 3.60 percent.

The terms of the proposal also would call for the city to rebate to the developers 50 percent of the sales tax increment above Springtown’s 2009 levels from 2011 to 2016. The money would defray the cost of interest to the developer on the city loan and fund up to $600,000 of architectural enhancements for the developer.