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.
kay williamson says
I have a quick question, Why can’t the public know about the 50 companies interested in the MALL, why not list them in the general information and let us see what these companies have done in the past. Why do you have to keep them secret, Let them come to us all, Why all the confidentiality agreements??? I understand that the Mall is a private company doing business, but when our city money is at risk I believe confidentiality agreements should be KICKED TO THE CURB!!!!!!!!!
T J says
Whem i buy a used vehicle, i adjust the price knowing i will have to spend some money on it. I don’t ask my neighbor to pave my driveway so i can park easily.
TIF is the same thing. We taxpayers will have to put up this money for the slick developers to come here.
The mall price is a steal, even in this economy. We taxpayers are just making sure Arnsdorf is getting $10 million more for the property. We are partners in this development. In fact, Watson spoke of this piblic-private partnership. By definition, these partnerships are fascism.
Why should the other retail merchants in this town subsidize their competition?
All I hear from city officials is retail, retail retail, it will solve our problems.
How much of the high 9.75% sales tax goes to the city? 1 and 1/2 %? This is just another tax on the local shoppers.
Retail wages are the lowest of all. Get the Chamber off their asses, and the IDB. Bring in engineering, wholesale, manufacturing,- good paying jobs that pay enough for people to buy one of the 300 empty houses in OR.
Retail is dieing all over the country. No jobs, no retail sales. If you believe the BS on TV coming from Washington, you need to get off the kool-aid. Go to any other town-Knoxville, observe all the empty store fronts. Go to any restaurant, – no waiting, only half full. Even liquor store sales are way off.
It’s great to be optomistic, but one must be realistic.
Any news on the highland/Iris project? It will be another TIF scam for taxpayers.
TIF financing is a gamble, anything can happen between the city infrastructure costs and the successful opening of the businesses.
Ask ORUD about their up front expense for Chilton. At his apartment occupancy rate, the $300,000 up front investment will never pay off. The cost will be paid by the current and future gas customers.
Nothing is for sure in business.
Do we want to gamble adding ten million more to our debt of $170 million to subsidize some out of town
Developers plans to suck more dollars out of OR? Wallmart already sends $40,000,000 yr. to China, keeping them employed.
We just spent $800,000 on a bike path, are likely to spend $300, 000 on a dog park, for the exclusive use of a few dozen people. Maintenance and upkeep is never part of the equation either.
Last night the city voted to spend at least $200,000 to turn the jail into a fortress. When asked why, Beehan said “because of future social unrest”. What does he know that we don’t?
Liberal statist like him have caused most of our current problems in America.
All council members and all law enforcement in OR swore an oath to the US Constitution, and to the Tennesse Constitution. Betcha none have read the Tn one. Not abiding by either is malfeaseance of office and requires them to lose their job, and in some circumstances, go to jail. Everyone send them a copy of both documents.
Citizens should not be taxed to pay for private business to set up in Oak Ridge! I came to Oak Ridge in 1970 to work at Y12. The mall has never done well with several owners. I agree with TJ and Kay!
Also if the Police did not mess with red light cameras, street parking, prohibiting gun permit holders from protecting there families from drug dealers in city parks, National Parks honor gun permits, more people might move to Oak Ridge.
If crime was reduced in O.R. maybe police would not need to spend $200,000 to hide from citizens!!!!
honor gun permits, more people might move to Oak Ridge. If police worked harder on crime they might not have
I agree that the price should reflect the costs to fix. There was a grant that expired due to inaction that covered some of this effort and that loss should be reflected in the cost as well.
However, we also have a stake in this as a community and Walmart selling Chinese goods has nothing to do with that unless we are satisfied to have that as our only option. Let’s keep the dogma out of this and stick to the economics of what is best for Oak Ridge.
T J says
Thanks for the support on the pricing structure. Also, long term tax abatements are detrimental to businessmen already here. I fought with OConner about a fire hydrant that I did not need, but was required under state subdivision laws. I finally convinced him to give me one, but I had to install it($3500) myself. This was when the city was giving a ten year tax abatement to a Maryland company to build apartments on Layafette. The city also did all the water and electrical work for free for this developer. All the rents paid go to Maryland. How much did this immediately help OR? In six years they will be paying property taxes.
Dogma? You mean public private partnerships? They are used to give the advantage of one business over others. They are monopolistic and eventually crowd out the real private sector. Of course most people in OR have lived with them all their lives. They are not real conducive to true capitalism, — but can be called crony capitalism.
Your stake in the community is your private property here -not a retail store owned by outsiders.
Your “stake” is paid for by your property taxes, which are supposed to guarantee you good streets, fire protection,and police protection. Your utilities are paid by you seperately under contract.
No, my stake is the retail here as well. When my sales taxes go to Knox County, my (and your) property taxes are higher than needed.
I hope you aren’t saying that those apartments were only rented to people who lived in Maryland too. Perhaps having the apartments met some community needs and those people who lived there spent some of their money here. BTW, where are those apartments on Lafayette? Bristol Place? That met a great need here in OR.
By dogma, I meant the political labels you posted to enhance your arguments. If they were any good, they could stand on their own.
Mare Martell says
I’d like some money to fund a business venture that may or may not create jobs, but it’s okay, it’s just the taxpayers money in some town I heard of once and saw on Google Maps.
TJ and Kay both make sense. Without real jobs in Oak Ridge there won’t be any money to spend on anything BUT the Chinese goods from Wal-Mart. According to an article ( http://www.thenewamerican.com/economy/commentary/item/11653-democrats-unveil-bill-to-raise-minimum-wage-to-$10-an-hour ) on a Democratic web site, the minimum wage needs desperate adjustment. Without decent jobs in Oak Ridge, people spend more time working than with their families which increases crime rates and would give the cops something to do besides hide in their fortress. “Last night the city voted to spend at least $200,000 to turn the jail into a fortress. When asked why, Beehan said “because of future social unrest”.” according to TJ. Why is this necessary if we were providing for our community through decent jobs? My question is the same, when can I expect my check?
The question remains whether or not the purchaser will be a good manager of the property. There was once a beautiful mall thriving there, but businesses were strangled out within a few short years. I would hate to see tax dollars poured down the drain to support an owner whose business plan is poor.
I think the TIF will be irrelevant due to the asking price of the property. I believe firmly that there is a case for condemnation and eminent domain for public use. Under eminant domain a reason for condemnation could easily be a largely abondaned property that has resulted in lost tax revenue in the property tax, retail sales tax, and earnings of potential employees and tenants in the municipality. Due to the lack of initiative by the present property owner, the value of the property should have decreased instead of increased. A just compensation must be given to the property owner for any land taken. I would propose using the last property tax assessment value of $5.7 million, “When title to an entire tax parcel is condemned in fee, the total amount of damages may not be less than the latest valuation used by the assessor of property prior to the taking, less any decrease in value since then. The assessor’s valuation may be introduced and admitted into evidence. T.C.A. § 29-16-114(a)(2).”
Taken from “Eminent Domain in Tennessee” by Dennis Huffer, “Acquiring property as part of a redevelopment plan under which the property will subsequently be resold to a private developer does not result in the property being acquired for a private purpose when the public receives a benefit from the complete implementation of the redevelopment plan.”
I for one would support the City of Oak Ridge in claiming eminent domain for the “mall” property for the specific use of redevelopment. The City should look into the costs of infrastructure improvements on the sight and take on the improvements necessary to make the property desirable for resale. If this means razing the current buildings, so be it. Once the infrastructure is in place, sale the property at the cost of property plus improvements. If $15.7 million is the cost, it is a fraction of the high school redesign and has the potential to actually put money into the Oak Ridge economy.
Let me add that the monolopolistic covenant with Wally World needs to be deemed null and void under antitrust laws. This would then open the doors for real retail development on the property.
correct spelling – monopolistic – Perhaps I should write my posts in an application that has a spell check and then copy to this application, or just go back to school. I can’t believe I proofread that little 2 sentence post and still missed this egregious error.
I just don’t understand why WE as in OR taxpayers should have to pay for this business? Tear the thing down, I don’t want to pay a dime for it!