Council Bends on Plan to Sell Old Sears Site to Developers

Seeking to recoup the city’s investment in the former Sears store site in Hillcrest, the City Council on Monday agreed to offer the 12-acre parcel to developers willing to meet its price and build a mixture of retail stores and residences.

The council also adopted guidelines restricting the size of the development to protect existing Hillcrest businesses from the competition that a huge strip mall with ample on-site parking would present.

“Our objective is to try to recover those funds, and we think there is a reasonable expectation of doing so,” said James Spotts, the city’s property director. “Let the private sector use their imagination . . . let them go at it.”

Under a plan developed by Councilman Bill Cleator--who led a 1986 move to purchase the site for $9 million but later saw his wish to turn it into a new central library rejected by the council--the city will accept bids from builders willing to pay at least $9.5 million for the Cleveland Avenue parcel and close the deal by June 30, 1988.

Investment Is Up to $10 Million

Because of the cost of holding the land for the last 14 months, Spotts estimated the city’s total investment at $10 million.

Developers will have to shape their plans according to guidelines developed by the Planning Commission, one of four panels that proposed limits on the site’s use. The commission calls for a project that includes 60,000 square feet of retail space, 20,000 square feet of second-story office space, seven acres of residential housing and a city-built 9,500-square-foot recreation center.

The limits would allow, for example, a 40,000-square-foot grocery store, a 10,000-square-foot drugstore and some small stores.

But at the urging of the city manager’s office and Cleator, those limitations will be guidelines only, allowing developers the flexibility to tailor a development that would be worth the $9.5-million price tag.

“I say give them some flexibility,” Cleator said. “Don’t tie them down to X number of square feet.”

Developers Seen as White Knights

Council members are counting on a developer to pull them out of the financial hole they dug when they bought the property in September, 1986.

Financial consultant Larry Williams told the council Monday that it could only expect $5.8 million to $7.2 million for the site under the restrictions that the Sears Site Review Committee and the Planning Commission had wanted to impose on the site. The council hopes that the more flexible limits will help raise the price.

Williams reported that the city could earn as much as $12.3 million if it were willing to lease part of the land for as long as 50 years, but the city needs the money this year. The current capital budget assumes that $9 million in revenue from the sale of the parcel will be received by June 30.

At least one developer, Dene Oliver, chief executive officer of Oliver McMillan, said he intends to submit a proposal that conforms to the guidelines approved by the council Monday.

Among other proposals Spotts has received is one for a development that would include a church and housing, and another for an “entertainment facility.” Spotts said he has already received offers for the land, ranging from $9.8 million to $10.4 million, but most do not conform to the guidelines.

Cleator also asked Spotts to investigate whether the city can take legal action against Sears, which he said sold the building without revealing the presence of asbestos or that the structure is built on uncompacted fill. Both problems have increased demolition costs, Spotts said.

Under Cleator’s plan, a committee that includes Hillcrest area planners will review developers’ offers, as will the city’s Real Estate Advisory committee. The Uptown Community Planners and the Planning Commission will also consider the proposals before the council chooses a developer May 23.

The plan drew support of the Hillcrest planners and business leaders who spoke at the council’s meeting Monday.

Despite the months of debate over the site’s future, several council members remained adamant that the purchase was the correct move to make.

“You were right in trying to convince us to buy (the site) for a different reason, and I’m glad we did, or we would have found a strip shopping center there,” Councilman Mike Gotch told Cleator. “We did the right thing.”

Only Mayor Maureen O’Connor, who as a candidate opposed the purchase, needled Cleator briefly but later declared her support.