The Rome Redevelopment Agency voted to recommend a Mount Berry Mall Tax Allocation District financial package to both city and county commissioners. The Hull Property Group is asking for $1.15 million in financial assistance over 15 years.
The Redevelopment Agency includes city representatives Sammy Rich and Bill Collins, and county representatives Jamie McCord and Larry Maxey. Community representatives include John Pillsbury, Cheryl Bishop and Ryan Earnest. Pillsbury called for a voice vote and there was no opposition though McCord and Maxey did not cast a vote for, or against the project.
If the city and county approve, the mall owners would get a portion of the additional taxes that are generated by improvements to the mall.
"We are not losing any taxes, we are just foregoing any increases for a period of time," explained Rome City Manager Sammy Rich.
As it is, the mall has been steadily losing tax value over the years and by locking in at the current $4.88 million valuation, the city and county would at least be guaranteed of a steady level of taxes from the mall for the next 15 years.
The mall property was valued for tax purposes at $6.4 million in 2015 but has seen that figure drop to $4.88 million this year.
"Our sales have dropped just as steeply," said Hamp Manning, gov-ernment relations project manager for Hull Property Group. "We've got to stop the bleeding."
HPG is prepared to spend $5.3 million for the demolition work along with interior improvements in phase one of work at the mall. He said that phase two could involve an investment of between $6 million and $8 million.
Manning said e-commerce is putting a lot of pressure on brick and mortar retailers and that by demolishing more than 100,000 square feet at the north (Sears) end of the mall, the vacancy rate could be cut from 36 percent to 20 percent.
The agency was told the average tenant now at the mall has a lease that would expire in three years or less and reducing the vacancy rate would be a key factor in not only retaining existing tenants, but retaining them at full value. He told the agency that most leases have a co-tenancy clause that reduces their rent when the vacancy rate dips below a specific level. He said those numbers vary from lease to lease.
Manning said that demolition work at the Mount berry mall would probably occur during the first quarter of 2019 after the company finish-es demolition of nearly 50 percent of its mall in Dalton, which is slated to start Aug. 18.
The HPG officials said national retailers are closing brick and mortar shops every week.
"Medium malls are the most vulnerable to these closings," Manning said. He said HPG has never sold a mall and was not going to put a down-market tenant into the mall just to fill space. "We think it can be relevant," Manning said, explaining that if HPG didn't believe in the future of the mall that it wouldn't be willing to invest $11 million to $13 million of its own funding into the project. "We can't do this work with-out a little bit of assistance," Manning said.
Agency member Larry Maxey, a member of the Floyd County Commission asked if the project would still be able to move forward if the county did not back the TAD financing, Manning responded, "That would kill the project."