San Marcos Mercury | Local News from San Marcos and Hays County, Texas

March 22nd, 2010
Springtown to get talk, but no action at Tuesday city council meeting

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At a public meeting earlier this month, San Marcos Mayor Susan Narvaiz discusses re-development proposals for Springtown Mall. Photo by Andy Sevilla.

STAFF REPORT

The re-development of Springtown Mall will be discussed, but not acted upon, at Tuesday’s meeting of the San Marcos City Council.

The agenda lists only a “status report on Springtown Mall by (Mayor) Susan Narvaiz.” The mayor had planned to bring the matter to a vote of the council Tuesday night, announcing that intention as far back as a public meeting on the matter on Feb. 25.

However, as Narvaiz acknowledged at a March 2 city council meeting, the deal has a lot of “moving parts.” The property owned by Lamy-Springtown Mall, Ltd., and mortgaged by Thrivent Financial for Lutherans was listed for foreclosure in February.

At the city council meeting earlier this month, Narvaiz said the deal would involve a city incentive of no more than $3 million to Lamy-Springtown, which wouldn’t require the city to provide money up front. Instead, the property owner would receive the money from the increased taxes the property would generate.

Even then, though, the particulars of the deal were in flux. By the time the city posted its city council agenda last Thursday, the staff was in no position to propose a deal for the city council to consider.

The city council was going to be asked on Feb. 16 to approve a $2.5 million loan for Triple Tap Ventures, which owns the San Marcos franchising rights for the Alamo Drafthouse Cinema. Triple Tap was to place an Alamo Draft House in the old Best Buy building at Springtown and pay the loan back in ten years from the incremental tax increase.

However, the city announced that it would hold off on that vote because citizens had been unable to access the information on the city council agenda. The council did receive a formal briefing on the proposal for the first time that night.

Since the Feb. 16 meeting, Narvaiz has discussed the matter at one city council meeting and held three public meetings to discuss the project, arguing that Springtown should be approached as a redevelopment project, rather than as an economic development project. Narvaiz said the Alamo Drafthouse incentive wouldn’t be intended address employment so much as redeveloping the mall, keeping the existing businesses afloat, and reducing crime and blight.

Two similar proposals were to go before the council last summer. The first was a $5 million interest-free loan to the Springtown property owners, who would have been required to redevelop the property and pay the loan over 23 years. 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.

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0 thoughts on “Springtown to get talk, but no action at Tuesday city council meeting

  1. Just curous, did you go to the courthouse on March 2? Did you catch the price? Did anyone bid on it? I suppose Thrivent now owns it but I guess they would still be trying to work something out with Lamy-Springtown as that would most likely be their best potential customer.

  2. Per the deeds the total bid was $7,433,333.37. It would be unusual for Thrivent to work with Lamy at this point. Also odd that Lamy didn’t file a last minute bankruptcy to stale the foreclosure.

  3. Bob,

    I don’t have any perspective on what you mean by your comment on Thrivent’s ownership…..are they notoriously difficult to deal with or something? It seems to me that any time a lender forecloses on a property, their primary objective becomes to get rid of it ASAP and reduce their carrying costs. Would Thrivent be different?

  4. Which comment dano? It’ll be a short council discussion if Lamy-Springtown is out of the picture. I doubt if Thrivent is going to play developer and start talks about incentives with the city.

    I question Winchester’s comment about Thrivent dealing with Lamy. I’m guessing that all those players know each other pretty well, Lamy has more invested in the property (in the form of engineering studies, etc) than anyone else and hence would be the best customer.

  5. It is highly unusual for a lender that has foreclosed to turn around and deal with the party that defaulted on the loan. If they were going to work together it would be prior to foreclosure. If Lamy were really interested in holding onto Springtown, they would have filed bankruptcy, staying the foreclosure to give them some time to work with Thrivent.

    Don’t look for Thrivent to develop the property or to fire sale it any time soon as they are into this for roughly $7.5M.

    One possability would be for a new partnership to be put together and buy the property, but Thrivent will not owner finance without a huge cash down, and if the partners were similar any third party lender would require the same.

  6. The best bet for the city is to let the smoke clear and find out who the players are, then try to figure out what kind of deal they need to make.

    Look for Triple Tap to be the big winner here. Assuming they have the capital to buy Springtown. The stand to get a god price for the real estate, then cut a deal with the city. They also get to collect rent and manage the property.

  7. I wasn’t clear as to whether you though Thrivent would not be willing to work with people to get the property sold and/or redeveloped, or that the City would lack interest in working with Thrivent as it had wanted to with Lamy. You explained it.

    I tend to agree with Winchester here. The City’s best bet at this point is to sit back and see who owns the property and what the plans are for that property before we commit to any government assistance…..

    ……which probably means that tonight Narvaiz will pledge $5 million in aid to *anyone* willing to do *anything* with Springtown.

  8. Just saw this on another site (Texas Real Estate Busines):

    SAN MARCOS — 1180 Thorpe Ltd. has purchased a 103,504-square-foot building from Target for an undisclosed price. The former Target store is located adjacent to Springtown Mall at 1180 Thorpe Lane in San Marcos. Target relocated its store to East McCarthy Lane last September. Epic Real Estate Ventures’ Daniel Jay Holland represented the buyer. Mark Reeder and Todd Wallace of SRS Real Estate Partners represented Target.

  9. Surely a private company did not pay market price with out government subsidies for commercial property in San Marcos. Bob I am shocked sir, shocked!

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