San Marcos Mayor Susan Narvaiz, left, and Triple Tap Venture’s Neil Billingsley-Michaelson, right, discuss the San Marcos City Council’s tabling of a $2.5 million “grant” for Triple Tap during a recess at Tuesday night’s council meeting. Photo by Andy Sevilla.
By ANDY SEVILLA
Just out of executive session Tuesday night, the San Marcos City Council tabled action and open discussion on a proposed $2.5 million incentives package for the location of an Alamo Drafthouse in the vacated Best Buy building at the Springtown Mall.
San Marcos Mayor Susan Narvaiz said after the council meeting that the tabling was necessary due to technical failures preventing San Marcos residents from accessing background information about the incentives until Tuesday morning. Narvaiz also said that the tabling would allow “more time for discussion.”
Narvaiz said Tuesday’s council meeting was the first time the whole council discussed the matter.
The Springtown Mall, owned by Lamy-Springtown Mall, Ltd., is listed for foreclosure in the March 2 auction on two parcels, one of which hosts the property Alamo Drafthouse wants to move in to. The Springtown Mall owners are in default to Thrivent Financial for Lutherans by nearly $10 million, though Hays County has appraised those parcels at almost $8 million, providing for an approximate $2 million in negative equity.
A perplexed standing-room only council chamber was in awe after hearing deliberations on the matter were tabled before councilmembers even came out of executive session. That however, did not keep San Marcos residents from weighing in on the subject.
“Remember this is a mess that we created in city council by paying to move businesses (Target, JC Penny, and Bealls) out (to the StoneCreek Crossing on the city’s south side),” San Marcos resident Rob Roark said to the council. “… We don’t want bailouts of city council fiascos.”
Roark alluded to the $6 million in sales tax rebates offered to StoneCreek, enabling the three main Springtown tenants to relocate there.
Narvaiz said the $6 million in sales tax rebates were necessary for StoneCreek Crossing because the General Land Office (GLO) was luring the big-box stores into property that would have removed them from the city’s tax roles. Narvaiz said the GLO was essentially competing with the city for the national retailers, a fight she wasn’t going to lose.
“I think the council has been very responsible with all our economic development decisions,” Narvaiz said. “… We’re protecting our current revenue stream with all that we do.”
Narvaiz said the council was prepared to provide the millions in sales tax rebates to StoneCreek Crossing so that revenue would continue to flow in to the city’s general fund, 48.1 percent of which comes from sales taxes. She said the sitting council in 2006, in the initial negotiating stages, made a commitment to revitalize the Springtown Center after they incentivized Target, JC Penny, and Bealls to go to StoneCreek Crossing.
The council is now tasked with considering a $2.5 million interest-free loan to Triple Tap Ventures, LLC, for the redevelopment of the old Best Buy building to bring the Alamo Drafthouse to San Marcos. The loan for the six-screen, 23,250-square-foot theater is estimated to be repaid in nine years, though the term is for 10 years, not including property tax revenue repaid from increased sales and property tax revenues.
The increase in city sales tax and property tax generated above 2009 levels would offset the loan amount, effectively making it a “grant”.
Said San Marcos resident Steve Harvey during the citizen’s comment period, “Let’s call it what it really is. It’s not a loan, it’s a gift.”
Narvaiz said the proposed $2.5 million incentives for Triple Tap are a “grant” and “not a loan.” She said public and private partnerships are necessary in the current economic climate, whereas a few years ago, she said, incentives may not have been imperative.
“It’s a grant predicated on increased revenues,” Narvaiz said.
Last summer, The Springtown Mall owners put forth a request of an interest-free $5 million loan to be repaid over 23 years in hopes of redeveloping the property. The proposal was unanimously shot down by councilmembers after much resident uproar.
The developers later pulled a second request for a $3.9 million loan with a maximum six-percent interest rate for the duration of the six-year loan. From 2011 through 2016, the city would have rebated 50 percent of the project’s generated city sales tax above the vacant Springtown Mall’s current levels. That money would have defrayed the developer’s interest payments and provided up to $600,000 for architectural enhancements.
Many of the San Marcos residents facing the council Tuesday night criticized the elected officials for considering millions of dollars to incentivize the attraction of below living-wage jobs.
When asked if incentivizing Alamo Drafthouse jobs was a worthy investment, Narvaiz said she looks at the totality of the opportunity. She said “a $9-an-hour job is sometimes a step up for some of San Marcos’ residents.”
Narvaiz said the $2.5 million grant will allow the Alamo Drafthouse to locate where it will be successful.Email | Print