Redevelopment plan for Springfield's Commercial Street evokes mixed emotions

A redevelopment plan for parts of Historic Commercial Street was first presented to Springfield City Council on Monday night but received a mix of reactions both from council members and nearby residents and business owners, leaving the future of the overall plan unclear.

The redevelopment plan constitutes 17 lots along and south of Commercial Street. Broken up in four phases, the project includes plans for a townhouse development, rehabilitation of the Missouri Hotel and other mixed-use and multi-family developments. All portions of the redevelopment are owned by developer Titus Williams of Prosperiti Partners.

Here's what is being planned on Springfield's Commercial Street

The four phases of development mentioned in the plan, to be activated over the next 18 months, are as follows:

Pacific South: This Midtown development has already received city approval for the construction of 72 townhouse dwellings. With an approximate $15 million investment, the townhomes would replace a single-family home and an unused building. If the redevelopment plan is approved, work could begin immediately and is estimated to be completed by Fall 2025.

540 E. Commercial St: Located on the corner of Commercial Street and Washington Avenue, this property has been cited as a reason for the city to consider a 'demolition by neglect' ordinance. While the building was set to be demolished earlier this year, the action was postponed by the developer. The plans for this corner include the construction of a new mixed-use building featuring retail/restaurant/office space and ADA-compliant residential apartment units on the first floor and residential apartment units on the upper floors. This phase is estimated to begin in Summer 2024.

Missouri Hotel: The historic Missouri Hotel property that had provided shelter to homeless people through The Kitchen Inc. nonprofit for the final 30 years of its operations could become a hotel once again. The redevelopment proposes renovation and rehabilitation of the building into a boutique hotel. Adjacent Commercial Street buildings would feature commercial and various hotel accessory uses. The redevelopment of the hotel has been approved for historic tax credits in 2024. Work on this is estimated to begin this fall.

Pacific North: Properties north of Pacific Street between Jefferson and Benton Avenues are the proposed location of a newly constructed multi-family residential development with off-street parking. The plan notes the development will consist of 200+ residential apartments and amenities such as a pool, fitness facilities and others. The last of the phases, this is estimated to begin Summer 2025.

How the process works

The redevelopment plan in front of council Monday covered the entirety of the area. The plan declares the area blighted, so that the developer can in the future take advantage of property tax abatement through the Chapter 353 Urban Redevelopment process outlined in city code.

While the plan covers the entire area, tax abatement approval is only included for the Pacific South project in this initial plan. For future phases, the city's Director of Financial Vitality Amanda Ohlensehlen said, amendments to this plan or new plans referencing it would be presented for approval separately. Those would still have to pass through several government bodies, including the Landmarks Board, Planning & Zoning Commission and the council before going into effect.

Unlike Pacific South, the other three phases are all a part of the Commercial Street Tax Increment Financing district. A TIF district provides for incremental increases property tax revenue to be collected and redirected toward redevelopment projects within the district's boundaries. In order to benefit from property tax abatement, these areas have to be carved out of the TIF district and the developer must pay out the remaining years of the payments in lieu of taxes that the properties would have generated without the developments. While the price tag on the buyout is negotiated between the developer and city, it is estimated to be almost $300,000.

The tax abatement would span 25 years. During the first ten years, all of the assessed value of improvements to the property and land would be frozen, while during the remaining 15 years, half of the assessed value would be abated.

Concerns, uncertainty for future phases

The TIF has not yet been amended to exclude these areas. Combined with a lack of information and detail on future phases and preservation of the street's historic character, council members and the public were hesitant to consider the plan as a whole.

Councilwoman Monica Horton led the conversation, questioning whether this plan could be split into four different plans for each phase of the greater project. Speakers expressed support for approaching redevelopment in this way in hopes it would provide more detail and assurance for each phase.

"It feels like an omnibus plan to me," Horton said. "It feels as though this is a plan that is ready to go for Pacific South, but because the other three plans are not cleared from the various levels, it seems as though we need to put the brakes and perhaps recommend separate redevelopment plans for those three phases."

Shelby Wood, attorney with Spencer Fance, spoke as a representative of Williams on Monday. He said a single plan was being pursued due to economy of scale and the desire to do the TIF buyout as a singular transaction. Wood also noted that designating the whole area as blighted now will allow the developer to begin to remediate the properties — work that has not been done out of an "abundance of caution" to ensure the blighted designation is met as part of the abatement requirement.

"I can't say with 100% certainty that every single one will be saved, but the goal is to save as many as possible," Wood said in reference to the historic buildings along Commercial Street.

All seven nearby residents were supportive of the Pacific South project, wanted it to move forward swiftly and commended the developer for engaging with the community throughout the planning process. They asked that the same communication be open for the rest of these projects and were concerned about phases being included in the plan without explicit details and concerns about how the redevelopment or demolition of buildings could impact the street's historic designation.

"Many in the area want to see the remaining development proposal evaluated more extensively, as far as its effects on the TIF districts, the historical district status, the blighting and abatement specifications, with more transparency for all of the residents and business interests and affiliate groups," said Danny Crisp, Midtown resident and Commercial Street property owner.

Irene Schaefer, a business owner, said splitting the plan up into separate plans for each phase would give better opportunity to address issues of those specific areas and development plans.

More: Fassnight neighbors split on new multi-family housing proposal from local family

P&Z unanimously approved the plan, though no one from the public spoke on the topic at the hearing.

City Attorney Jordan Paul said he will look into the logistics of council's options for approaching the plan as it only pertains to the Pacific South portion. Currently, the council is scheduled to vote on the plan at its April 8 meeting.

Marta Mieze covers local government at the News-Leader. Have feedback, tips or story ideas? Contact her at mmieze@news-leader.com.

This article originally appeared on Springfield News-Leader: Commercial Street redevelopment plan declares entire area blighted