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La Gran Plaza plan deserves a chance
 By Mitchell Schnurman
Star-Telegram
IN MY OPINION
Take a walk through the old Town Center
Mall south of downtown Fort Worth, and you'll
get an idea of why some projects are grave
enough to warrant government help.
Storefronts are boarded up. Swaths of tile are
missing from the floor. Few cars are in the
parking lot. And on a recent weekday
morning, the halls resembled a ghost town.
J.C. Penney closed its anchor store there
nine years ago; Dillard's and Sears left in
2002. At the end of 2004, the occupancy rate
was 36 percent, and that was before Payless
ShoeSource bolted in January.
The mall generated about half a million
dollars in sales taxes for Fort Worth last year,
down from $1.2 million two years earlier.
Against these discouraging trends comes a
Los Angeles developer with a rescue plan
and well-heeled financial partners -- and a
request for big-bucks help from the city.
José de Jesús Legaspi and his partners want
to spend $42 million to turn Town Center Mall
into a festival-style mercado that he has
renamed La Gran Plaza de Fort Worth.
To make the deal work, he has asked the city
for nearly $22 million in incentives and up to
20 years to collect them.
To get the subsidy, the mall must generate
tens of millions of dollars of additional sales
taxes. If it doesn't produce the new sales, the
developer is out of luck.
But $22 million is a big number, even for a
decaying property of 1 million square feet,
and local leaders seem paralyzed by the
sticker shock.
Legaspi says he hasn't been able to get a
hearing for months, and he's eager to lock up
a definitive deal and start the rehab. That
would help hold on to existing tenants and pull in new ones in time for the next Christmas season.
Out of frustration, Legaspi urged leaders of neighborhood groups to write letters to their council member, Wendy
Davis, who also heads the city's economic development committee. He also contacted me and provided details of
his proposal, hoping that a public airing would jump-start the discussions.
This isn't the way you usually solicit public help in Fort Worth, but Legaspi needs to get the ball rolling. Davis is
often a champion of subsidized deals, but she told him to go back to his spreadsheets and scale back his
expectations.
"We really want that project to work," Davis said last week, "but it's just too rich."
I'm not so sure. Looking strictly at the numbers, Fort Worth went for richer deals involving two other retailers,
Cabela's and the SuperTarget near downtown.
Those enterprises cater to a more upscale clientele, while La Gran Plaza will aim for a Hispanic population that's
growing rapidly but doesn't have nearly the spending power. Almost 83 percent of the people who live within a
mile of the mall are Hispanic, Legaspi says, and he believes that many now go to Arlington and Irving to shop.
Legaspi isn't playing the race card, at least not yet. But it's fair to ask whether Fort Worth has a soft spot for
affluent developments and a tougher standard for a decaying mall in a low-income market.
The irony is that economic aid originated as a way to help downtrodden areas. It's great that Fort Worth has used
those tools -- tax abatements, special taxing districts and sales tax rebates -- to help land projects such as
Cabela's, SuperTarget and new headquarters for RadioShack and Pier 1 Imports.
But let's face it: Those deals all let the rich get richer.
Legaspi has his own profit motive, of course. But there's also a compelling argument that the area around the
mall, at Interstate 35W and Seminary Drive, desperately needs a shot in the arm.
He and his partners bought the mall in April for nearly $16 million, and they propose pumping $26 million into
renovations. Eventually, after the project is complete, leased and humming, Legaspi projects that it will generate
10 times the sales it does today. Over the next 15 years, he says La Gran Plaza will create nearly $88 million in
new sales tax revenue for Fort Worth.
Legaspi says he'll give the community what it wants: a revamped mall that's reminiscent of the downtowns in
central and northern Mexico. His concept drawings envision a variety of storefront facades, with bright colors, big
archways and bell-tower domes.
"We want to appeal to the nostalgia of their home- towns," Legaspi said. "We want it to be a place where families
gather and shop."
Legaspi seems credible. He has been updating and leasing centers in Hispanic markets for more than 15 years,
and his partners, Boxer Property and Churchill Capital, have a record of turning around troubled projects.
He says GMAC has committed to fund the Gran Plaza renovation, but still, the talks with the city have stalled.
"It baffles us, because we're a multimillion-dollar company that's trying to invest a lot of money in that district," he
said.
Davis says the impasse over the project has nothing to do with credentials or race or income -- and everything to
do with the details.
Her objections begin with the sheer size of the $22 million request, especially compared with the cost of the
proposed improvements.
The structure of the rebates raises red flags, too; the city wants to cap the annual amount, while Legaspi wants
the chance to accelerate the incentive payout if the mall hits it big.
The city even has doubts about the project's viability: not only whether it will work and pull a large niche audience,
but whether it would simply shift revenue from other retailers in the city.
Those are valid concerns. And taxpayers always want the city to be a hard-nosed negotiator and give up as little
as possible -- without letting the deal slip away.
What's disheartening in this case is that the two sides aren't at the table working on solutions and crunching the
numbers. Where's the talk about fast-tracking this deal, as with Dell and Intel and The Tower?
Davis says she is waiting for Legaspi to rework the proposal; Legaspi says he wants to see her in person to make
a stronger pitch.
The two have scheduled a meeting for this week, and let's hope they can iron out some misunderstandings. The
city seems to believe that Legaspi wants a guarantee in case the sales tax levels fall short; that's a nonstarter,
because Fort Worth awards incentives only after the developer performs.
Legaspi says he wants the chance to recoup more of the incentive in later years, when sales are expected to
grow. The city doesn't like such arrangements, but it went along with one on Montgomery Plaza. And why not, as
long as the cumulative amount doesn't exceed the incentive that everyone agreed to?
The ratio of public money to private investment would be high for La Gran Plaza, but it's no more lopsided than
the SuperTarget deal, which grants almost $7 million in public help on an $8.7 million investment.
As a community, we paid a lot because the SuperTarget meant so much to downtown because it will finally bring
a grocery store to the area.
The Gran Plaza debate deserves the same kind of consideration. Imagine what a revived mall would mean to that
neighborhood.
IN THE KNOW
La Gran Plaza de Fort Worth
• The deal: Los Angeles developer José de Jesús Legaspi and his partners bought Town Center Mall last April for
nearly $16 million. They want to invest $26 million to turn it into a festival-style mercado. It has been renamed La
Gran Plaza de Fort Worth.
• Public help: The group is asking for nearly $22 million in city incentives, primarily a sales tax rebate. The mall
must generate enough new taxes in the next 20 years to get the subsidy.
• Impasse: Discussions stopped two months ago, after city officials said the request was too rich. They also have
concerns about the structure of the rebates and the project's viability.
• What's next: Councilwoman Wendy Davis and Legaspi are scheduled to meet this week to resume talks.
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