Council OKs TIF financing mall deal
Published 10:14 am Tuesday, October 20, 2015
Hy-Vee is even closer to acquiring Oak Park Mall, but it’s not a done deal just yet.
After the Austin Port Authority unanimously approved the terms of a $2.9 million agreement to acquire the mall Monday morning, the Austin City Council voted Monday night to unanimously approve motions regarding an escrow fund of $1.625 million for tax increment financing or TIF district costs for mall demolition purposes. Council members Judy Enright and Jeff Austin were absent.
The council’s approvals put the deal on the verge of completion. If all goes according to plan, all parties will officially sign the deal for it to be finalized the second week of November. The port authority will then briefly acquire the mall before turning it over to Hy-Vee to build a new 60,000 to 90,000 square foot grocery store.
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The deal for Hy-Vee to acquire the mall through a $3.5 million Hormel Foundation grant was announced last year, but the deal hit complications and talks fell apart early this year.
Over the summer, Hy-Vee and the city confirmed they were again negotiating with the various parties to reach a deal, which was first announced Friday through city documents.
“There was no way I thought that this thing was going to get finished,” Mayor Tom Stiehm said. “It’s just amazing that it did.”
Stiehm, as he did Monday morning at the port authority meeting, noted that the mall’s condition has been the number one complaint for the public since he took office.
The mall plans and Director of Administrative Services Tom Dankert received a round of applause from the council and many attending the meeting.
The city received $375,000 from a state grant for the project, which was less than the requested $500,000; however, Dankert said that was more than many cities received. The port authority and city had each contributed $750,000 to the project, and the Austin Housing and Redevelopment Authority had contributed $50,000 for a total of about $1.5 of the needed $1.625 million. Since the state grant came in lower than expected, the city approved getting the remaining $75,000 from the city’s building fund. The additional $125,000 — $50,000 from the HRA and $75,000 from the city — is only needed because the state grant came in at $375,000 instead of the $500,000 city officials requested.
Hy-Vee will repay the TIF funds, which will be used for demolition purpose like asbestos abatement.
“It will take 26 years, but you’ll get it repaid back,” Dankert said.