Developer hopes for public/private funding mix

By Tom Killin Dalglish

tdalglish@eastbaynewspapers.com

TIVERTON — Town Council members grilled representatives of Legacy Development for three-and-a-half hours Monday over the Kansas firm’s plans to build an outlet shopping center on 130 acres of the Tiverton Business Park.

The meeting was "preliminary," Legacy representatives and council members kept saying. It was also scattershot with a wide range of questions coming from various councilors.

"How much does Tiverton get and when will we get it. We don't want to know about these other places," said Councilor Jay Lambert at one point, referring to Legacy Development's descriptions of of projects it had built elsewhere in the country.

Mr. Lambert said he'd been to Kansas City. "When I think of Kansas City, I think of prairie. I'm not sure you understand the concept this town may be looking for. What I'm looking for in terms of a concept is ... it's Tiverton, a small New England village."

"I'm somewhat disappointed in the presentation," Mr. Lambert said.

Counclior Brett Pelletier asked about costs.

Roughly $150 million, Legacy's Vice President of Development Bart Sides answered. “But that's very preliminary, it can change."

John K. Hansen, Legacy's real estate consultant from Integra Realty Resources, said there are two tasks ahead. One was to find the revenue streams in the proposal. The other is "to monetize" the stream, "by a bond or debt instrument — the monetization of future revenue streams."

"At this point we don't have a specific proposal to share with you," Mr. Hansen said.

"Developments like this require some public/private partnership — that helps bridge the financial gap," he said.

"But for such a partnership, the project couldn't happen," Mr. Hansen said.

"Revenue bonds are a very important part of the project," he said.

He said there is a new state law — the Rhode Island Tax Increment Financing Act of 2015, which he said directs state sales tax revenues generated by a project to underwrite "sales tax and revenue" bonds (STAR bonds).

"Are you familiar with 38 Studios?" Councilor Joe Sousa asked Mr. Hansen. "I won't vote for anything that will put the taxpayers on the hook."

The question of moving the police station and department of public works facilities, and building new ones at another location, was raised.

"We can't pay for the land, and the build a police and department of public works facility on top of that," Mr. Sides said.

Town Administrator Matt Wojcik said the estimated cost of a new police station is in the range of $6.5 million, and for a Department of Public Works facility the cost could be $1.7-$1,9 million.

"These economics don't work if we don't own the land," he said, answering a suggestion that was floated — that Legacy could buy the land for the police and DPW buildings and lease it back to the town.

"Why did you pick Tiverton?" Councilor Peter Mello asked Legacy's representatives. "You could have come from heaven."

Mr. Sides said that Legacy's owner, Dan Lowe, has a network of real estate brokers across the country, and someone suggested there was a site in Tiverton that was "in play," referring to the Business Park.

Mr. Sides volunteered the name of Carpionato in his answer. "We thought they had a pretty good plan, but it was clear the public did not want them there."

"We have no affiliation with Carpionato," he added.

"What is your typical vacancy rate?" Mr. Wojcik asked Mr. Sides. "Two percent in Kansas City," Mr. Sides answered.

"How can you see a chance of success, given Middletown" and other failed shopping centers in New England, Mr. Wojcik asked.

"The returns are not going to get there without a public/private partnership," replied Mr. Sides. "The outlet concept is very successful."

Legacy's plans include a hotel. "I don't remember a hotel being named," Council President Denise deMedeiros said at one point.