Four years and two months after it approved Community Improvement District agreements to help fund the renovations of the Village Shops and Corinth Square, the Prairie Village City Council tonight is expected to vote on language that would reassign those CIDs to a new, Maryland-based owner.
Landmark Retail Properties LLC, the shopping centers’ owner, announced in August it had entered into a tentative agreement to sell the two centers and the Fairway Shops to First Washington Realty. Based in Bethesda, Mary., First Washington operates more than 90 shopping centers nationwide with an estimated worth of more than $3.5 billion.
As part of the original CID agreements, the Prairie Village city council is tasked with approval of the reassignment of the CIDs — with all of their rights and obligations — should the centers be sold. However, the council has very limited leeway in determining whether or not a new potential owner is fit to assume the CIDs. The council is only permitted to deny the transfer of the CIDs if it has reasonable doubts that a new owner could not meet the financial burdens of operating the centers.
Earlier this fall, the council voted to hire Colliers International CEO Ted Murray to review First Washington’s financial position and experience to determine if there were any reasons for concern. In his report to the council, Murray suggests there is little doubt First Washington can meet its obligations.
“Buyer owns 95 centers in 21 states and the District of Columbia and is fully aware of obligations regarding maintenance and repair, compliance with Laws and payment of taxes which are all important aspects of real estate ownership,” Murray wrote. “Consultant believes Global Retail Investors, LLC and First Washington Realty, Inc. appear to be highly qualified and have the experience and financial responsibility to assume the obligations.”
The announcement of the sale brought pushback from some councilors, who say the taxpayers who helped fund the renovations won’t see any of the benefit of the increased value of the centers in the sale. The ownership group has not disclosed the terms of the pending sale to First Washington, including the price.
LANE4 Property Group brokered the purchase of the Village Shops, Corinth Square and the Fairway Shops from North Carolina-based Highwoods Properties for a reported $62 million in 2009. At the time of that sale, the shops were estimated to produce an operating income of $5.4 million a year for the owners.
Since the 1 percent sales tax went into effect at the centers Jan. 1, 2011, Corinth has collected $1,345,140 in CID revenues and the Village Shops has collected $1,342,181. To date, the shops’ owner has submitted reimbursement requests of a total of $4,193,767 for work at Corinth Square and $3,953,178 for the Village Shops. (The city doesn’t write checks to reimburse eligible expenses under the CIDs until there is money in the CID account to do so).