San Marcos City Hall, where Tuesday could be a late night. File photo.
The San Marcos City Council will consider granting a $2.5 million loan, free of interest, to Triple Tap Ventures, which would build an Alamo Drafthouse Cinema in the vacant Best Buy building at Springtown Mall. The council will take up the matter during Tuesday night’s deliberations.
Documentation with the city council’s agenda says the loan would be repaid from the increase in sales and property tax revenues generated by the improvements to the property. The term of the loan would be 10 years, though the city estimates it would be paid back in nine years. The developers would pay any unpaid balance on or before the tenth anniversary of opening the theater.
Triple Tap would build a six-screen Alamo Drafthouse seating 600-700 people. The city estimates that the theater would generate revenues between $5 million and $5.9 million per year while employing 70-80 people (plus an additional 30 during the summers). The city also estimates that, over a ten-year period, the property would generate $2.8 million in sales taxes beyond its present performance.
The proposal was made public Tuesday morning, when city employees returned to work after the President’s Day holiday weekend. The item was originally posted as an addendum to the agenda at 4 p.m. last Thursday, a day after the agenda was originally posted.
San Marcos City Clerk Sherry Mashburn said the agenda had never included an addendum with back-up information before, so the staff faced technical difficulties making the back-up information accessible through the Internet.
The owners of Springtown Mall, who stand to benefit from the possible incentive deal, owe nearly $10 million on the two Springtown parcels that are listed for foreclosure — and Hays County has appraised those parcels at a total value of barely less than $8 million.
Between the two Springtown Mall parcels, according to calculations by Real Estate Foreclosures, Inc., Lamy-Springtown Mall, Ltd., has negative equity of more than $2 million.
The Alamo Drafthouse, through Triple Tap, would provide Lamy-Springtown Mall with a key tenant for a shopping center that appears to be drowning in red ink.
On one of the Springtown parcels in foreclosure, Lamy-Springtown Mall owes $4 million against a $6.1 million loan from Thrivent Financial for Lutherans dated Nov. 2, 2005. But the Hays County Central Appraisal District (CAD) last assessed the property for $297,560, as the mall is nearly empty since the anchor tenants moved to StoneCreek Crossing. Lamy-Springtown’s negative equity on that piece is estimated at $3.976 million.
Lamy-Springtown is much better off on the other piece of property, for which it took out a mortgage of $7.65 million from Thrivent on Sept. 26, 2006. Lamy-Springtown still owes $5.665 million, but it has an estimated equity of $1.723 million. The county last assessed the property for $7.698 million.
The latest movement re-opens the city’s tortured affair with Springtown Mall, which has languished in the city’s gateway since the city council granted $6 million of incentives for StoneCreek Crossing on the south end of town to move Target, JC Penny and Bealls from the Springtown location. The council approved the last of those incentives in December 2008.
Last July, two attempts by the city to make re-development deals with Lamy-Springtown foundered amidst robust public disapproval. After the city council turned back a $5 million interest-free loan to support Lamy-Springtown’s plan for an entertainment facility anchored by Alamo Drafthouse, Lamy-Springfield pulled a request for a $3.9 million loan to be defrayed by 50 percent of the resulting sales tax increment. Among other reasons for objecting to the incentives, critics said bar and restaurant businesses don’t pay the breadwinner wages that make incentives worthwhile.
Triple Tap Ventures is owned by Norman Abdallah, co-founder of the Carino’s Italian Grill chain, and Austin entrepreneur Neil Billingsley-Michaelson. The company purchased franchising rights for the Alamo Drafthouse in six Texas markets, including San Marcos, Houston and Corpus Christi.
Shortly after making the deal last October, Abdallah told the Austin American-Statesman that he plans to run the venture largely from his Seattle home, while Billingsley-Michaelson would run the day-to-day operations from Austin.Email | Print