Basalt council: Willits must develop on its own dime
SCANLON OPTS OUT OF WILLITS DISCUSSIONS
Basalt Town Manager Mike Scanlon is usually in the thick of the Town Council’s discussions, but he has withdrawn himself from discussions about Willits Town Center, both at the council and staff level, because his brother-in-law, Kyle Siner, is chief financial officer with Mariner Real Estate Management, the Kansas City-based company that is owner and developer of the project. Town Planner Susan Philp and town financial consultant Bruce Kimmel lead discussions involving Mariner. Assistant Town Manager Judi Tippetts also works on ordinances and resolutions involving Mariner.
Mariner bought Willits Town Center at a foreclosure sale in 2011, a decade after Basalt granted approval for 500,000 square feet of residential and commercial development. Scanlon was hired as Basalt town manager in December 2012. He disclosed while interviewing for the post that his brother-in-law was an executive with Mariner and that he wouldn’t participate in Mariner issues. He informed the media after he was hired that he wouldn’t participate on Mariner issues.
The developer of Willits Town Center can build additional retail and residential space, but it’s going to have to be on its own dime.
The Basalt Town Council voted 5-2 Tuesday night to let Mariner Real Estate Management build another 91,000 square feet. However, the board voted 4-3 to reject Mariner’s proposal to use sales tax revenue and institute a new “fee” on retail sales at the shopping center to raise millions of dollars for public improvements.
“I don’t think the community has the stomach for (subsidizing) a billionaire, and I’m sticking to that,” Mayor Jacque Whitsitt said.
The board changed direction from two weeks ago when it voted 4-2 to support the sales tax sharing and the new fee as well as the additional 91,000 square feet of retail and residential development. That was the first of two readings necessary on three separate ordinances.
On the second reading Tuesday, Councilman Rob Leavitt changed his vote to go against the revenue sharing. He said he voted for the proposal two weeks prior to spur debate. It did that “loud and clear,” he said. From the feedback he has received, it is clear that “we don’t have an appetite for PIFs,” he said, referring to public improvement fees.
Councilman Mark Kittle wasn’t at the Dec. 8 meeting. He voted against sharing public revenue on Tuesday.
Councilman Gary Tennenbaum joined Whitsitt, Kittle and Leavitt against the revenue sharing.
“To me, I really feel development should pay its own way,” Tennenbaum said. “The way it is here, you’re asking the town to be your banker.”
Councilmen Rick Stevens, Bernie Grauer and Herschel Ross supported the revenue sharing.
Mariner claimed that to complete the build-out of Willits Town Center it needs public funds. Company executives said there is a $12 million gap between what it will cost to build the rest of the project and the amount it can recoup through rents and still make an acceptable profit.
Under a proposal arranged by Mariner with town staff and the town’s financial advisor, sales tax revenue at Willits Town Center would only be shared after total sales exceeded $45.5 million. That’s the baseline in sales from 2015. The town would still collect the first $1.35 million in sales taxes. Any amount after that would be split with Mariner.
The sales tax revenue sharing would have been split until Mariner collected $5 million or 15 years, whichever came first.
In a separate funding mechanism, Mariner wanted town approval for a new “fee” which functions like a tax. It wanted to apply on a 1 percent fee on sales at Willits Town Center for as many as 20 years.
Ross, Stevens and Grauer said they saw the funding proposal as an investment rather than a subsidy. Ross insisted there was no “gamble” with public funds. The town would have only shared sales tax revenue once sales exceed the $45.5 million at Willits in 2015.
“Whoever says ‘don’t give them the government’s money’ isn’t paying attention,” Ross said.
The decision came after a three-hour debate that attracted a standing-room-only crowd. Roughly 20 people spoke and slightly more than half opposed the sales tax revenue sharing.
Edward Troy of Basalt likened Mariner’s proposal to “economic extortion.” It is similar to when an NFL football team owner claims the community needs to help build a stadium or the team will be moved, he said.
“Right now what it sounds like we’re doing is subsidizing an economic colony for Mariner,” Troy said. Mariner is a Kansas City-based company.
Jennifer Riffle of Basalt said if Basalt should consider any type of public improvement fund it should be to incubate businesses downtown. Mariner shouldn’t receive a “bailout” after letting spaces sit vacant for seven years, she said. Several other speakers endorsed the idea of helping downtown businesses.
It was uncertain in the meeting if Mariner will be interested in adding 91,000 square feet to its development — approved for 500,000 square feet — without the public financing aid.
On the development question, Whitsitt and Tennenbaum were opposed.
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