Plans moved forward Monday to finalize financing that will allow the city to provide $1.4 million to help renovate Marketplace of Warsaw shopping center.
That money will be repaid with new tax revenues anticipated as the shopping center undergoes an extensive renovation and locks in new retail tenants and sees a significant increase in assessed value.
Sullivan Wickley, a Georgia company that acquired the retail property a year ago, is investing about $12 million and already has two tenants – Big Lots and Planet Fitness – locked into leases. Announcements about two more stores is expected in the coming weeks.
On Monday afternoon, the city Redevelopment Commission unanimously approved a resolution that allows the city to use new tax revenues created by improvements to pay off a bond through Lake City Bank, to provide Sullivan Wickley with about $1.4 million that will go toward renovations.
On Monday night, Warsaw Common Council approved an ordinance on second reading allowing the authorization of the issuance of revenue bonds.
Randy Rompola, a partner at Barnes & Thornburg who serves as bond counsel, told the Redevelopment Commission on Monday they plan to close on the bond issue on May 12.
The city is seeking to finance about $1.7 million. The additional $300,000 is needed cover finance costs and interest.
Transfer of money is dependent on the percent of leases that are filled up, he said.
Under the plan, the developer is responsible for making up any shortfalls in anticipated tax revenues needed to pay for the bonds during the first five years, beginning in 2024.
The Redevelopment Commission would then be responsible for any shortfalls for the next five years and would use other money collected through a tax increment district.
Lake City Bank would be responsible for the risk over the next 10 years.
If the increased assessed value exceeds what is needed, that money could be used to pay off the bond ahead of schedule, he said.
Release of the money from the city is dependent upon the securing of leases. The agreement calls for Sullivan Wickley to receive the balance of the bond proceeds with the signing of additional leases, Rompola said.
They have 30 months to sign the leases, he said.
Officials with Sullivan Wickley have said their goal is to finish renovations and have much of the storefronts filled with tenants by the Christmas shopping season.
City resident Roxanne Coffelt attended the meeting and asked for a clarification on what money would be used to finance the bonds. After learning that TIF money derived from the property would be used, she said she was less opposed to the plan.
She expressed concern about the future of two other nearby strip malls.
The MarketPlace property was moving quickly into a downward spiral with numerous departures in recent years before the sale to Sullivan Wickley.
Jeremy Skinner, the city’s economic and development director, said the property had lost 41% of its assessed value in five years.
He said the city talked with several potential buyers of the shopping center and all were seeking public support for renovations.
Interior renovations have already begun on the west side of the building where Pier 1 Imports had been.
Big Lots will be on that corner location and is expected to open this summer.
