By NICK BUDD
Hays Post
Hays city commissioners offered Matt Gough, the lawyer representing DP Management and the ownership group at the Hays Mall, with some amendments to the development agreement discussed again by commissioners at Thursday’s work session.
Commissioners requested all of the renovations be complete by Dec. 31, 2016, and pitched an amendment that requires the commission to approve a transfer of the CID if the mall is sold. The city also plans on adding an amendment requiring staff to keep the facility maintained.
The CID would add an additional 1 percent sales tax on sales generated on the mall property, funds that would be used to offset construction costs.
In the original proposed development agreement, developers wanted to have the first phase of improvements complete by July 1, 2016, and the second phase done a year later. The first phase of improvements include interior improvements to the lighting, flooring and other areas, repaving the parking lot and demolishing the bank drive-through and the former Montana Mike’s building. The second phase includes improvements to the landscaping, mall entrances and additional interior upgrades.
The first phase of improvements are projected to cost approximately $1.3 million and DP Management has already secured a loan to finance the phase. The second phase is projected to cost approximately $1.75 million and financing is not secured.
“If we’re asked to commit to both phases without loan approval for the second phase, assuming the ownership group is obligated to do phase one and two in order to get money from the CID, that’s something the development group is going to have some very serious conversations about,” Gough said.
Gough also noted the commissioner’s proposed deadline for phase one was a “safe one” and the improvements are intended to be done sooner.
Commissioner Ron Mellick expressed concerns with the deadlines noting new chains that have signed non-bonding letters of intent wouldn’t come until July 2018.
“It’s hard to believe that someone would come here because (DP Management put new lights inside),” Mayor Henry Schwaller said. “Now if you redid the facade, which would happen by mid-2017, that would make it a more attractive place to shop. … I think our concern is that it is a long time to wait.”
Schwaller also noted the phases most likely will have to be coupled in order for him to vote in favor of the proposal.
“If the phases are done separately, it shows a lack of commitment,” Schwaller said. “It’s not as if the property is vacant and not generating revenue. … Some of these things are overdue, and they’ve been deferred such as the bank drive-through.”
Gough said he was “concerned” with the idea of combining the two phases.
Commissioners expressed concerned with the possibility of the mall being sold while the CID was still in place. The proposal gives the CID a maximum lifespan of 22 years, or it sunsets once the improvements are paid off.
“I don’t want the ownership group to fix things up and then run,” Mellick said.
Another item brought up by Commissioner Shaun Musil during the discussions was the idea of using local contractors for the work. Both parties agreed to add language to the development agreement so that DP Management make a “good-faith effort” to use local contractors.
“There may not be an instance in every case where there is someone local who can do the work,” Gough said. “And we wouldn’t want to require it to be local, because it could stifle the bidding process and raise the price.”
Gough said he plans on taking the commission’s recommendations back to DP Management for discussion, and commissioners will discuss DP’s response at their next work session.