A set of city incentives to push forward the redevelopment of the Crossroads Mall site was set to expire by Monday without the developer’s signature, but Mayor Jean Stothert said Friday that the two sides had reached an agreement.
The informal agreement relates to the incentives only. Stothert said a formal redevelopment agreement, to be submitted to the City Council and necessary for the project to keep moving down the tracks, hadn’t been signed. The developers also hadn’t made a formal application for tax-increment financing, she said.
She said the developers “have a few more loose ends to tie up.” Neither the Mayor’s Office nor the developers would discuss details on Friday.
“I think it’s very exciting,” she said.
A letter sent by city officials to developer Rod Yates and Frank Krejci, who together bought the mall in 2010, asked them to respond to the city’s offer of incentives by Monday. The incentives could be revoked if demolition doesn’t start by the end of the year, Stothert said.
The city had sent a letter to Yates in April detailing the incentives package. New to the table is about $6.56 million in redevelopment bonds to be used for public infrastructure, including roads that would run through the redeveloped property.
“We’re very close to having all financing in order,” Yates told The World-Herald earlier this month. “The incentive was a big step of getting us there.”
The new sweeteners for public infrastructure are in addition to incentives already offered, including between $40 million and $45 million in tax-increment financing, an amount that would depend on how the property appraises.
The incentive allows developers to divert property taxes generated by a development to repay the cost of improvements associated with it.
“We really need to see some progress,” Stothert said earlier this month.
An occupation tax of 1.95 percent on all sales, which would generate an estimated $4 million annually for 20 years, also is on the table.
Meanwhile, negotiations to buy out leases of existing tenants at Crossroads Mall are stalling the demolition of the tired shopping center at 72nd and Dodge Streets, Yates said earlier this month. He had said last fall that demolition was to begin by March 1.
The latest redevelopment plans for what will be called Crossroads Village include 410,000 square feet of retail and restaurant space with a movie theater, apartments and office space. Target, which owns its property, and a parking garage will stay, but existing structures east of Charleston’s and west of Target will be demolished.
“The most important next step is finishing up the assemblage (of land),” Yates said. “We’re going to make a lot of progress this summer and get positioned to start demolition later this year.”
Remaining tenants include Sears, Barnes & Noble and some tenants on short-term leases within the mall.
David Deason, vice president of development at Barnes & Noble, said the company is aware of the planned redevelopment and has discussed with developers the possibility of a new store in the revamped Crossroads Village, but no concrete plans have been made.
Deason said that while the company eventually plans to close the bookstore once redevelopment starts, “we have not been notified by the property owner as to when that work will begin.” Until redevelopment gets to the point that it will affect the store, Barnes & Noble will remain open, he said.
Sears did not respond to questions.
Yates acknowledged that the city and Omahans were getting impatient, but he said most other developers would face the same challenges with such a huge undertaking.
“Doing a major redevelopment of a distressed mall is a very time-consuming process,” he said. “It’s just the nature of the beast. It’s a long, political process.”
World-Herald staff writer Roseann Moring contributed to this report.
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