Archive for Wednesday, June 11, 2003

Edwardsville nets $491 million project

June 11, 2003

Edwardsville officials are negotiating a deal with an Omaha developer for a massive $491 million mixed-use development south of the Kansas Speedway.

The Riverview Redevelopment Corridor concept proposal put together by Omaha-based Cormac Co. would transform 650 acres on the city's north side into a sports complex rivaling an Olympic village. An 8,500-seat indoor arena on one side and on the other a sanctioned indoor athletic facility operated by the Kansas Multi-Sports Foundation would encompass 800,000 square feet of retail and entertainment venues, plus an 18-hole golf course surrounded by upscale housing.

"The Riverview Corridor plan offered by Cormac and the Multi-Sports foundation fulfills this Council's vision for a development that will attract tourists as well as provide much-needed retail and upscale housing," said Edwardsville Mayor Stephanie Eickhoff. "This is the right project, at the right time, for Edwardsville."

Eickhoff said the plan would allow Edwardsville to grow in a controlled manner while significantly increasing its sales tax base. Sales at Riverview Corridor ultimately are projected to reach $150 million annually, generating $10 million to $12 million a year in sales taxes in an area that currently produces no sales tax revenue.

The project would develop a T-shaped area, from three-eighths of a mile west of 100th Street to Interstate 435, and from Interstate 70 south to Kansas Avenue. It is just across I-70 from the racetrack.

Developers hope to break ground in the first quarter of 2004 and open the arena in the fall of 2005.

Doug Spangler, Edwardsville city administrator, said the project would make generous use of Sales Tax Accelerated Revenue, or STAR, bonds, such as were used to develop the Village West area immediately north of the Riverview site. STAR bonds are special funds in which state and local sales tax revenue is directed from new businesses within a specified project area to pay for the sale of the bonds.

The Riverview project easily meets the STAR bond criteria, Spangler said. To qualify for such financing, the project must have a statewide economic impact, foster tourism and aggregate at least $50 million.

The project rests on two cornerstones: on the west end, the indoor sports arena, which would be suitable for arena football, IHL hockey, indoor soccer, boxing and other sports; and on the east end the indoor athletic facility, which would consist of an indoor 400-meter track, a gymnasium and a natatorium, or competitive swimming pool. The latter facility would be operated by the Kansas Multi-Sports Foundation, which has already completed feasibility studies on the concept, Spangler said.

Just east of the arena, plans call for the construction of two hotels of 140 and 150 rooms. Two national chains have committed to the development although they have not yet agreed to announce their plans publicly, Spangler said.

Southeast of the hotels, adjacent to the golf course clubhouse, will be a 350-room resort hotel and conference center. Again, Spangler said, a major resort operator has committed to the project but is not yet ready to make its interest public.

At the center of the north end of the complex, between the two sports venues, will be a 950,000-square-foot retail-and-entertainment complex, featuring a Home Depot and other major retailers. The development includes nine separate restaurants, excluding those associated with the hotels.

Commitments have already been obtained for 475,000 square feet of the total 950,000 square feet of retail space, Spangler said.

The golf course will cover most of the land from Riverview south to the project's south boundary of Kansas Avenue. Plans call for 385 upscale housing units, with many adjoining the playing spaces.

Several things must yet occur, Spangler said. First, the city must conclude its agreement with Cormac. This may take up to 60 days, he said.

Second, feasibility studies must be completed, at the developer's expense, for the STAR bond financing. (The feasibility study for the indoor track-gym-pool facility has already been completed.)

Third, the land must be assembled. This, too, should prove relatively simple, Spangler said. There are only 38 property owners for the entire 650 acres, Spangler said, and only 20 houses on the entire property.

As an inducement to sell, owners will be offered 125 percent of the appraised value of their properties, with complete salvage rights. In other words, a home owner in the area could collect his 125 percent, jack up his house, and haul it away.

"That's what we intend to do," Spangler said. "We'll work with them."

All the members of the Council have been adamant about protecting the rights of property owners, Spangler said.

Kansas Rep. Tom Burroughs, D-33rd Dist., a key representative in developing the legislation, said the proposed plan is the time of major entertainment and tourism project the state had in mind when it passed the STAR Bonds legislation.

The development requires STAR Bond funding because the expected cost to provide sewers and roadways to the Riverview Corridor area are of a magnitude which restricts the opportunity for this area to develop under normal means. In addition, it leverages the significant investment the state has made in the I-70 and I-435 infrastructure.

Cormac, based in Omaha, is a part of a family-owned company with nearly 40 years' development experience in the Midwest. Its Stateline Station shopping center at 135th and State Line in Kansas City, Mo., is expected to open this fall.

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