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Shopping Centers Today -> July 2003
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35 MAYORS MEET DEVELOPERS
BY DONNA MITCHELL
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| Developers quizzed a panel of mayors on issues ranging from smart-growth initiatives to bureaucratic delays. |
LAS VEGAS — Retail developers and municipalities are eager to cut deals, but getting them done isn’t always easy, panelists and audience members noted at ICSC’s annual Spring Convention.
Set up as a town meeting featuring 35 mayors of U.S. cities as panelists, “Private and Public Partnership in Retail Development” drew a packed house. Emmy Award-winning journalist and talk show host Meryl Comer moderated the session, making light of the inherent tension between developers and municipalities.
“For a place like this, our session should have been billed like a Vegas fight,” quipped Comer. “But all it takes is a TIF [tax increment financing] or two to turn a fight into a Vegas wedding.”
Audience members were equipped with electronic keypads enabling them to respond to poll questions. Many said they consider so-called smart-growth development to be hostile to developers, with 36 percent saying they regard the term as code language for “anti-suburb.” An additional 34 percent think it’s code language for “no growth” at all.
But for all the friction, there is a desire for cooperation on both sides. Some mayors described the new ways they try to speed the development process. Boston Mayor Thomas M. Menino said the city sets a deadline for completing each project’s permitting process; if the city doesn’t make it, the developer’s fees are refunded.
“We’ve got 2 million square feet of projects in the downtown that went through the process in eight months,” he said.
Some 62 percent of the mayors said they spend considerable time wondering how to put development projects on the fast track, an issue that also preoccupies plenty of developers. Donald V. Shillington, CEO of Columbia Engineering, a Norcross, Ga., land-planning and engineering firm, recalled confronting a variety of trip-wire issues while developing the 244,000-square-foot Brentwood Shopping Center in Washington, D.C. The project lay on a former cemetery, had housed a post office that was the target of an anthrax scare, and was the site of a car-impound lot and a salt dome, said Shillington.
But he didn’t face those challenges alone. Washington Mayor Anthony Williams assigned a public official to work with the developer, making the city’s notoriously contentious political environment easier to handle.
“We had to move the impound lot, and I still catch hell for it,” said Williams. He added that in such situations mayors have to stick to their guns.
Several mayors also talked about the innovative ways they have pushed the redevelopment of brownfield sites. Mayor Scott L. King of Gary, Ind., said the city revived four brownfield sites by indemnifying owners of contaminated sites so that developers would not incur excessive cleanup costs. The sites amounted to a total of about 174 acres, part of what will ultimately be a total of 250 acres of developable land in that city.
“There has to be some flexibility” when dealing with brownfield sites, said King.
Fiscal shortfalls are another issue officials face. In answer to another poll question, 46 percent of mayors said budgetary deficits also keep them up at night.
But that should not deter cities from offering incentives to developers, Boston’s Menino said, because cities still have mechanisms at their disposal to strike deals.
Williams said the District of Columbia continues to use tax increment financing despite fiscal worries, and he noted that the city has allocated $30 million in funds to encourage retail development.
Mayor James A. Garner, Hempstead, N.Y., said his city offers tax abatement on new construction and development — up to 50 percent in some cases.
About 35 U.S. cities use TIF structures, which prompted Comer to ask if Congress should enact a law making them available in every city. The mayors didn’t think so.
“If we depended on Congress to get anything done, it would not get done,” said Menino, drawing applause and laughter from the audience. He added that mayors have to take the lead in deciding what is best for their municipalities.
State legislatures can also impede development, the mayors said. Arlington Heights, Ill., Mayor Arlene J. Mulder described one bill making its way through her state’s legislature that would discourage development of big-box stores exceeding 100,000 square feet that also contain 15,000 square feet of grocery merchandising.
“It is clearly a labor bill … being aimed at Wal-Mart and the growing Meyers Stores,” she said. “We want to make our own decisions and not have the state government tell us what to do.”
Some mayors stressed the need to preserve historic sites and improve urban infrastructures and rail transportation networks. Officials expect the U.S. population, currently at 291 million, to double in a few decades, said North Little Rock, Ark., Mayor Patrick Henry Hays.
“I don’t think anyone thinks that the current roads can sustain that,” said Hays. As a main component of transportation, rail must be considered seriously, he insisted.
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