UNIVERSITY CITY — A proposed $190 million Costco-anchored development at Olive Boulevard and Interstate 170 hit a speed bump when the University City School Board recently blocked the sale of the district’s administration building to the company behind the project.
Novus Development is interested in the University City School District’s Ronald E. McNair Administration Building on Groby Road as a potential new location for the girls’ campus of Torah Prep School of St. Louis, which is in the project footprint.
Despite a recommendation from the school district administration at its Sept. 13 meeting, the board didn’t have enough votes to declare the property surplus, which would have allowed the district to enter into negotiations to sell the property. The board voted 4-3 in favor of declaring the building surplus, falling a vote short of the needed supermajority.
“At this point there is no plan B for Torah Prep,” Novus Development President Jonathan Browne said Monday about his negotiations with the private Jewish school. “Is there some place? Undoubtedly. Is there any place identified and being pursued? No. … Our feeling is still that McNair was the best option for all parties — for them, for us and the school district.”
The action is another wrinkle in Novus’ long effort to redevelop the northwestern entrance of University City as a big-box retail development with nearby apartments and a hotel. After months of hearings and negotiations, University City this spring approved a development agreement that would provide up to $70 million in tax increment financing, or TIF subsidies, to help finance the project. Such financing freezes property taxes in an area and allows developers to use future sales and property taxes generated by their projects as part of their financing.
Since then, Novus has been working to finalize purchase contracts with property owners in the nearly 50-acre development area. Dozens of homeowners and commercial buildings housing popular restaurants and businesses need to be bought out. Torah Prep is just one of them, but the private school has eyed the McNair property for years, trying to buy it in 2012. The School Board voted against selling it then. A representative from the school couldn’t immediately be reached.
A presentation from school district administrators on the McNair property — which houses the central office, some special programs and hosts board meetings — said the central office could relocate to available space in University City High School and two other programs housed at McNair could operate from satellite locations.
The presentation also noted that over the last decade, enrollment has declined by some 600 students, to about 2,700 students last school year, and its buildings operate at less than full capacity. While a sale price was not disclosed, district financial officials presented two scenarios — one with a $1.8 million sale price and one with a $2.4 million sale price. Proceeds could be put toward reserves to keep the district’s fund reserves at a healthy level for longer and stave off the need for a tax increase or spending cuts.
Many residents who spoke at the meeting supported the sale for financial reasons and said board members shouldn’t be considering the impact to the controversial Novus development.
“Whatever their opinions may be of the development, that development is outside of the board’s purview when considering this vote,” Jennifer Yarrington told the school board.
Still, some residents who spoke said the district might need the building should enrollment pick back up. Board Vice President Chelsea Addison, who voted against the surplus designation, said it could be “shortsighted” to sell it.
“I believe that this land and building are of value and will increase in value as well,” she said.
Browne said that some of the opposition might have “had more to do with the development than School Board business.”
Addison sat on the TIF Commission that reviewed the plan as one of two school district representatives and voted in favor of the TIF last year. (The other School Board member on the TIF Commission, Lisa Brenner, also endorsed the plan and supported declaring McNair surplus.)
School Board President Kristine Hendrix, who opposed declaring the property surplus, said she felt the vote stuck to the surplus property issue.
“Everyone voted on what we were supposed to, which was ‘was that surplus?’” she said. “That was our recommendation — and that we vote on that and not to consider the other things happening in the city.”
But the vote’s impact on the development was clearly involved. The former acting planning director of University City, Rosalind Williams, also spoke at the meeting and urged the School Board to think of the long-term benefits “of having a development that will help, hopefully, to turn around declining enrollment in your school system.”
Browne said his firm had offered a “premium number” to the district for McNair, and the sale could be a good way to share the benefits of development with the district while new property tax revenue goes to the TIF for some 20 years. He hopes there is future discussion about the proposal.
“Perhaps more communication is needed,” Browne said. “If not, if that is not a possibility, then we don’t have any choice but to try to find something else.”
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