The latest plans for a major redevelopment project at Bayshore Town Center in Glendale are finally ready to be discussed by the city, which would include a subsidy that could be as high as $36.7 million, depending on the success of the project.
That project, which was originally proposed late last year, includes downsizing the mall’s retail space by almost half and demolishing or converting existing buildings for other uses such as residential units, a hotel, independent senior living, a medical facility, restaurants and office space.
As part of an updated redevelopment plan that was recently released by the City of Glendale, mall owner New York-based AIG Global Real Estate Services would cover the cost of the project without any immediate help from the city.
AIG acquired the mall in 2017 in a deed-in-lieu-of-foreclosure transfer, and has since promised to breathe new life into the troubled mall, which now has upwards of 50 vacant tenant spaces.
Dallas-based Cypress Equities Managed Services L.P., which was hired by AIG to manage the property and lead its redevelopment., originally estimated the redevelopment project costs to be about $75 million.
Glendale has offered to help AIG pay for the project, but only when the mall is redeveloped and, in turn, able to generate more property tax revenue based on a greater assessed property value, said City of Glendale attorney John Fuchs.
The city would then use Bayshore’s new property tax revenue to reimburse AIG for “eligible project costs,” according to the proposal.
“If (Bayshore) doesn’t create that money, it doesn’t get anything back and the city is not obligated in any way to give (the owners) even $1,” Fuchs said. “It will have to create, generate and pay it before getting it back.”
AIG would also pay off the city’s remaining $56.6 million in outstanding tax financing debt, which was incurred to help fund Bayshore’s original $300 million redevelopment project in 2002.
Bayshore is currently assessed at $65 million, according to the proposal, but upon its revitalization, the mall is expected by Cypress and AIG to be valued at $200 million. That assessed value would result in a total reimbursement of $36.7 million, which the city would pay to AIG with $2.8 million annual payments until 2033, according to the development proposal.
After the TIF closes, Bayshore’s property tax revenue would then benefit the city and other local governments.
The project plan will be reviewed by the city’s Joint Review Board during a Tuesday night meeting.
If approved, it would then be reviewed by Glendale’s Plan Commission and Community Development Authority, which will be involved in the financing aspect of the agreement, Fuchs said.
The project’s development and financing plans are expected to be finalized by the end this year, with construction starting this summer, but that timeline could be ambitious, Fuchs said.
Read more about Cypress’ plans for a reimagined Bayshore Town Center in BizTimes Milwaukee’s recent cover story, “Sink or Swim.”
