The Oak Ridge Mall is for sale for $10.5 million, and city officials say redeveloping it will likely require the use of new property tax revenues to help pay for public infrastructure improvements.
Voters said “no” the last time they were asked to consider whether to invest public money into a massive redevelopment of the Oak Ridge Mall.
This time, they might not have a choice.
Potential developers are likely to ask for public money to help pay for infrastructure improvements ranging from rerouted roadways and new traffic lights to building upgrades and property demolition, city officials said Monday.
There could initially be some $10 million worth of public improvements, with more possible later, Oak Ridge City Manager Mark Watson told City Council members.
“It will require public dollar involvement,” Watson said.
The public improvements could be paid for with a type of financing known as tax increment financing, or TIF, and they would not be subject to a public vote, city officials said. Tax increment financing uses new property tax revenues generated at a site to help pay for improvements there.
Even though a public vote might not be required, Oak Ridge Mayor Tom Beehan said municipal officials should still explain the project and its use of public funds.
Although he’s not directly involved in the negotiations, Beehan said 40 companies interested in redeveloping the mall have signed confidentiality agreements, and the goal is to narrow down the list soon. The companies are national firms with mall development and redevelopment experience.
“They want to get this done, I believe, by the end of this month,” the mayor said.
Municipal officials said the use of TIFs is common, and cities have had to offer incentives for developments in places like Turkey Creek, Maryville, and Kingsport.
Watson said Oak Ridge has been reluctant to say what it might be willing to offer to mall developers until a redevelopment plan is presented.
Now renamed the Oak Ridge City Center, the troubled, mostly empty 60-acre mall is for sale for $10.5 million. Chattanooga businessman Steve Arnsdorff bought it in 2003 for $6 million.
In 2002, 56 percent of Oak Ridge voters rejected a controversial $23.2 million bond resolution that would have supported a plan to convert the mall into a town square that would have included new school administration headquarters and a senior citizens center.
Redevelopment plans have languished in the decade since, although there have been occasional bursts of optimism as new or revived proposals were announced. Just two anchor stores remain.
Municipal officials would still like to create a city center, Beehan said.
“That is something the city is interested in, and the community is interested in,” he said.
