Gypsum widens Tower Center tax break
GYSPUM, Colorado Two years after the Tower Center shopping complex gained approval from the Gypsum Town Council, developers have yet to lure a large retail store to the site. But developers hope a tweak to the tax rebate plan for the project will help to attract tenants.Under the plan, the projects metro district a quasi-governmental body developers set up to borrow money for Tower Center will receive a 38-percent rebate on sales taxes the project generates. Town officials capped the total amount of money the metro district can receive through the rebate at $10.2 million. The rebate expires in 10 years, regardless of whether the project has produced enough sales tax to generate the $ 10.2 million in rebates.Under a previous agreement set up two years ago, the metro district could receive up to $7.5 million in rebates over five years. Gypsums council approved the change last week.I think in order to attract anybody right now, you have to offer something because of the economy, Councilman Tom Edwards said.Tax rebate money will help the metro district to pay down the debt it incurs in building the project. Because the project will be cheaper to develop, Tower Center can offer tenants lower rents, cash rebates or other incentives, said Richard Kabat, an investment partner with Gypsum Investors LLC, a company based in Colorado, Washington DC and Chicago that is developing the project.Those incentives can take a number of different financial forms, and its to be determined at a later date as a function of the negotiation between the retailer and ourselves, Kabat said.For the tax rebate plan to go into effect, the developers must lure a retail store that is 100,000 square feet or larger to the shopping center, Town Manager Jeff Shroll said. Once that tenant has been secured, the tax rebate will apply to the rest of the retailers in the shopping center, he said.Kabat plans to meet with several prospective tenants this month at a shopping center industry convention in Las Vegas, N.V. He declined to name them.In July, Kabat said he had a letter of intent with Lowes to build a store in Tower Center. That deal was contingent on getting final approval from Lowes real estate division, Kabat said then. Because of the economic recession, that deal has yet to close, he said. Tower Center stands on 75 acres south of U.S. Highway 6 and east of Jules Drive, just east of the Stratton Flats housing development. Two years ago, town officials approved the developers concept plan for the project. It included a 110,000-square-foot home improvement store, a 125,000-square-foot general merchandise store, a supermarket, a hotel and an office building.Everything is still a viable option, Kabat said. However, the economic recession has slowed the developers progress.I dont think the projects going to happen as fast as we thought because the economys slowing down, Kabat said. When developers proposed Tower Center in 2006, they estimated the project would rake in more than $5.6 million in annual sales tax revenue for Gypsum. That figures was based on a projected $141 million in annual retail sales. Gypsums sales tax rate is 4 percent, Shroll said.Tax rebates would go into effect once the 100,000-squarefoot retail store opens. The metro district would receive an annual tax rebate, Shroll said.Tax rebates are nothing new for Gypsum. Costco also receives a 38 percent sales tax rebate that is capped at $4.2 million, Shroll said. If Costco fails to generate the $4.2 million in tax rebates over three years, a 17-percent tax rebate continues to apply for another two years, Shroll said.