Opinion: Mall CID increase merits consideration with caveats
By Gina Long
Houston-based RockStep Capital recently submitted a proposal to the Hutchinson City Council to increase the existing 1% sales tax surcharge to 2% for purchases at businesses located at the Uptown Mall. The company says the funds will be used to attract more tenants, make all stores outward-facing, and remodel the interior space for mixed use.
The surcharge applies within a specific geographic area referred to as a Community Improvement District (CID). The mall itself and an adjoining property carry a 1% CID fee. The new Hilton Garden Hotel and Old Chicago restaurant will charge an additional 1% CID.
CIDs are used as incentives to encourage property and business development. The Hilton Garden Hotel’s surcharge will end when either the roughly $18 million cost of developing and building the facility is recouped or 22 years pass, whichever comes first.
The City of Hutchinson withholds a small percentage of the generated revenue ot cover administrative costs incurred from collecting the sales tax and distributing the CID funds to property owners.
The best part of CID financing is that it is not a citywide tax; it is only generated when someone makes a purchase at a business on the property.
RockStep Capital was given the 1% CID when it purchased the mall property out of bankruptcy in 2014. The building was neglected, with broken plumbing, heating, and AC, and the prior owners pocketed insurance money instead of fixing the roof after baseball-sized hail destroyed much of Hutchinson’s east side in 2012.
A retail apocalypse soon followed, with nationwide chains shuttering hundreds of thousands of retail locations. Shortly after, the mall lost its anchors, Sears, Dillard’s, and JCPenney. The food court, which had been dwindling since the early 2000s, said goodbye to its last vendor several years ago.
The mall’s interior is dark and worn, and about half of the retail space is unoccupied, per its website (the green spaces have tenants).
RockStep Capital rebranded to Uptown Mall in 2020 and hinted at securing national retailers for the empty anchor spaces, while also building a small business incubator space inside. That growth has been slow but is showing some success.
Uptown Mall’s outside entrance spaces have shown encouraging growth, attracting national chains such as Harbor Freight, Ulta Beauty, Dollar Tree, TJ Maxx and Ollie’s Bargain Outlet. The west end hosts Hutch Vintage Market, a unique retail model and a fun place to shop for everything from antiques to homemade crafts and jewelry. ESSDACK, Dunham’s Sports, and B&B Theatres fill out the south side’s outside entrances.
The old Goody’s store was supposed to have a national retailer move in, but so far has only hosted Spirit Halloween each fall.
The public hearing is scheduled at the Hutchinson City Council meeting on Monday, May 6, at City Hall, beginning at 5:30 p.m.
I want some solid and enforceable guarantees from RockStep Capital before committing to increasing the CID charge:
- A complete parking lot replacement. The mall parking lot’s potholes are legendary for their width and depth. The problem has lingered too long and has now become a safety issue, posing dangers to drivers and bicyclists. I won’t drive through the parking lot when there’s snow because I can’t see and dodge the craters. Removing some of the unused parking and adding some simple landscaping would increase curb appeal and lower the high temperatures radiating from a massive swath of unused asphalt.
- Truth in signage. The K-61 sign and the one along 11th Avenue still list businesses that have been gone for several years. Worse yet, the building’s most visible entrance still says “Food Court.” I think of tired and hungry families who drive by and think they can get a bite to eat.
- A full accounting of how CID monies are spent trying to attract more tenants. I don’t want to find out that those funds were shipped off to prop up a mall somewhere else. Local special tax funds should stay in the community.
- Parking lot security cameras. Hit-and-run incidents and vehicle break-ins are still a big problem, and, frankly, those concerns limit my shopping trips to quick dashes into and out of the stores. That doesn’t help the revenue flow.
A full 80s-style mall with spacious hallways and walking space will not return. Businesses focus on extracting profit from every square inch of their stores, and the costs of heating and cooling non-revenue-producing space do not make sense in today’s spreadsheet-oriented corporate management style. Spaces with outside entrances are more accessible and in greater demand. Some say that the mall should be torn down and replaced with clusters of strip malls.
On May 6, we citizens will have our opportunity to speak. Hopefully, RockStep Capital will present more specifics about their vision.
By Gina Long Houston-based RockStep Capital recently submitted a proposal to the Hutchinson City Council to increase the existing 1% sales tax surcharge to 2% for purchases at businesses located at the Uptown Mall. The company says the funds will be used to attract more tenants,
