City Reduces Stake in Mall Redevelopment

City officials have drafted a new agreement with a Washington, D.C., developer, Mills Corp., that sharply reduces the municipal stake in a new mall proposed for the nearly vacant City Shopping Center.

Instead of the $25 million in redevelopment funds that city officials last year had suggested allocating for the project, the city now will pledge $1 million in cash and up to $17 million in tax rebates. The city’s share will be due only after the $150-million mall is open.

“We don’t have anything at risk,” said City Manager David Rudat, who introduced the agreement to City Council members at a workshop this week. The council will seek public comment on the proposal next month.

Even with the tax rebates in place, officials hope the new mall, planned with a cinema complex, live entertainment and upscale shops, will boost a long-dormant section of the city.

The 87-acre City Shopping Center is closed except for one optometrist shop, said Linda Boone, interim redevelopment director. The property’s value has slipped from $57 million to $15 million in the past 10 years, she said.

After surveying other Mills projects across the nation, city redevelopment officials projected that the new mall could eventually generate as much as $1.78 million a year in sales tax revenue and boost property values.

As many as 4,000 people could be employed at the site during the construction phase, with an equal number of permanent and part-time jobs once the 800,000-square-foot mall is operating, officials said.

Mills officials said they hope to open the mall in 1998.