Willits developers wants to add 91,000 square feet in Basalt
The developer of the 500,000-square-foot Willits Town Center project in Basalt is asking for 91,000 additional square feet of space.
Representatives of Mariner Real Estate Management of the Kansas City area told the Basalt Town Council on Tuesday night they need 59,000 square feet of additional commercial space and 32,000 square feet of residential space to advance with development of the project. It is slightly more than half way developed.
Evan Welsh, asset manager for Mariner, led a team that told the council that the company needs to charge high rents because the development costs are high for the project. But national retailers are balking at signing on as tenants because of the drastic seasonal shifts in the Roaring Fork Valley and the small market size.
Mariner’s team said the project isn’t economically feasible with the current land-use approvals. It wants the additional space to help its bottom line and make the project more appealing from a critical mass aspect.
To blunt the cost of development for the rest of the project, Mariner wants town approval to charge a public improvement fee. That would allow Mariner to place a fee on any future goods and services sold there. It wouldn’t affect Whole Foods and other existing business. The revenue raised would be used by Mariner to offset development costs. Lower development costs would, in theory, help keep rents at an attractive rate.
Mariner proposed a two-pronged public-improvement fee. It wants the town government to accept less than its full sales tax levy for 20 years. In addition, it wants an additional “add-on fee” to raise revenue that would go directly to Mariner. John Hansen, a financial consultant for Mariner claimed that shoppers will be “relatively indifferent to that” added cost to merchandise and services.
Mariner’s proposal included a request that the town buy 16 affordable-housing rental units that would be required if the extra 91,000 square feet of space is approved.
The council members didn’t vote on the proposal. They directed their financial consultant, independent of Mariner, to dive into the financial assumptions made by Mariner.
However, some council members expressed reservations about Mariner’s request. Mayor Jacque Whitsitt said Mariner gave a 20-minute presentation about “how Mariner can make more money.”
She said she wants to see an analysis of the how the proposal affects midvalley residents and existing businesses.
Wes Grammer, managing partner of Red Legacy, a leasing company working with Mariner, countered that the proposal wasn’t about making more money. Willits Town Center currently has leases that won’t work, he said.
“This is about progress or no more progress,” Grammer said.
Councilman Bernie Grauer said political realities would factor into the decision on Mariner’s request. Downtown merchants will object to the town agreeing to defer some of its sales tax revenue, he said. Grauer said he is wary of taking action that could benefit one section of town.
“It would be a high hurdle for me to overcome,” he said.
Councilman Herschel Ross said he didn’t think the town’s efforts to revitalize downtown and spur progress at Willits Town Center are mutually exclusive.
“I don’t think this project would hurt downtown,” he said.
The council voted 5-0 to direct consultant Bruce Kimmel of Ehlers and Associates to conduct a thorough examination of Mariner’s financial claims. Kimmel said he would try to report back to the council Aug. 11.
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