By NICK BUDD
Hays Post
After months of discussions and negotitations, along with a 20-minute executive session to discuss final details, commissioners approved DP Management’s Community Improvement District at the Hays Mall by a vote of 3-2. Commissioners Ron Mellick, Shaun Musil and Eber Phelps voted in favor of the district. Mayor Henry Schwaller and Commissioner Kent Steward dissented.
The CID will create a 1 percent additional sales tax on sales generated on mall property to be used to fund approximately $3.1 million in interior and exterior improvements.
Steward said he hasn’t agreed with the proposal since it was brought to the commission, saying it is an improper use of taxpayer dollars.
“This is welfare for the rich at the expense of the poor with hopes of improving and extending the life of the Mall,” Steward said. “This is $3 million without any guarantee of results, and it is not my idea of good business.”
Throughout the application process, DP Management has said several national retailers have shown “significant interest” in coming to the mall if the renovations are made. CEO Terry Clauff said the tax increase was a “small assessment for a very large gain.”
Musil changed his feelings about the CID. After he was initially against the proposal early in the application process, he chose to vote in favor of it due to various discussions with businesses in Hays.
“When I talked to businesses, they said they didn’t like they way (DP Management) was going about it, but we want to see Hays have more business,” Musil said. “The reason I’m changing my vote is because I’m looking at the future of Hays. Maybe it’ll keep people in town shopping here and the people that come here for all the various events.”
Mayor Henry Schwaller switched his stance on the issue moving from being in favor of the proposal to voting against it due to the lack of a guarantee for increased business.
“If they came to us and said we want to build a restaurant or other business with the lease, that gives us a guarantee and we don’t have that and, therefore, I can’t commit to this,” Schwaller said.
Schwaller cited the empty promises from the TIF district at Home Depot, when the city was told there would be several other businesses on the way.
“It’s a catch-22, you have to put the priorities in front of national retailers in order to gain their interest in order to be in this market,” said Clauff.
Commissioner Eber Phelps said the improvements will add a pull factor to the area that, in return, might bring more people to the city of Hays.
“With the decline of the occupancy of the mall, our pull factor has gone down,” Phelps said. “As far as I know, this is one way to try to increase that pull factor once again and that’ll bring more shoppers to Hays because of the increase in opportunities.”
Mellick noted the economic development process has changed drastically in recent years, and if Hays wants to keep up, the city will have to “play the game, whether we like it or not.”
“I see no other way for us to proceed,” he said. “If not, we’re going to be on a downward spiral not only at the mall but more than likely in the whole town because we will be getting less people in here to shop.”
Commissioners also approved changes to the development agreement after discussions at last week’s work session when commissioners asked for earlier deadlines, restrictions on the CID if the mall is sold, and maintenance requirements. DP Management and the ownership group have until July 1, 2016, to complete the first phase of improvements and Dec. 31, 2016 to complete the second.
Phase one improvements include improvements to the interior, parking lot, exterior lights, and demolishing the former bank drive-through and Montana Mike’s Building. The second phase includes renovations to the insulation system, mall entrances and landscapes. If the developer fails to complete the first phase of improvements on time, DP Management will not be eligible for any of the funding from the CID.
If the second phase of improvements aren’t complete on time, they won’t be eligible for the reimbursement for that phase. If either of these situations were to happen, the money that was collected would be placed in the general fund.
According to finance director Kim Rupp, the application will be sent to the state for finals approval. Once approved, the 1 percent sales tax increase will be put into place around April 1. Clauff said improvements to the interior will begin after the holiday season and exterior improvements will start at “the first sight of spring.”