RACINE — Ahead of Thursday’s Redevelopment Authority meeting, Regency Mall owner Hull Property Group has submitted its plan to renovate the mall.
The proposal’s cover letter, written by John Mulherin, Hull’s vice president of government relations, refers to the mall as “a valuable community asset” and says that Hull is “excited to embark on the hard work needed to stabilize, transform and reposition” the mall. The two initial phases of the project, renovation and attracting tenants, will total $7.5 million in capital investment from Hull.
Mulherin told The Journal Times that the renovation, which he hopes will begin in October and finish by early summer 2018, will focus on “busting the perception” that Regency Mall is failing.
“You’ve got to orchestrate a new look and feel for the property,” Mulherin said. “You have to be able to turn that vacancy negative into a positive.”
To supplement Hull’s investment, the city will begin Tax Increment District 20 on Jan. 1 to provide a maximum incentive of $3.5 million over 13 years. The incentive comes in the form of a “cash-funded, pay-as-you-go” annual payment, which requires Hull to pay taxes and create new tax increment through return on their investment.
According to the term sheet for the agreement, if the TID doesn’t generate positive increment or there’s not enough increment from the TID to fund-share in a given year, the city isn’t obligated to share any new increment with Hull.
“We’re not bonding for this,” added Amy Connolly, Racine’s city development director. “It’s a performance-based incentive. As they develop tax increment we would share up to 90 percent with them.”
Plans call for Hull to complete extensive interior and exterior renovations of the mall. They include covering with drywall vacant storefronts in the mall which has a 23 percent total vacancy rate, according to Hull’s application. Some of the covered vacancies would be replaced by historic photographs and “murals depicting the Racine community,” according to Mulherin.
“We need to alter the look of that vacancy,” he said. “You’ve got to create a better canvas before you can bring people in. It’s no different than trying to sell your home.”
After the renovation work is complete, Hull will start trying to sell tenants on the new look at Regency Mall. Mulherin said that the renovation work “doesn’t guarantee” new tenants and stressed that Hull would make sure to choose tenants it feels work for the mall long term.
“There’s no bad property — there’s only bad stewards of a property,” Mulherin said. “We won’t put the wrong tenant in there.”
The agreement also includes potential for as much as $31 million in capital improvements, which would come from four restaurant outparcel developments and a potential 160-unit housing complex.
“This is not just about the mall proper, this is about the neighborhood,” Mulherin said. “This is about the Racine retail corridor.”
Both Connolly and Mulherin emphasized how positive the working relationship between Hull and the city has been since Hull’s Noember 2016 purchase.“They are a tremendously professional group and have been very forthcoming about their plans,” Connolly said. “We feel very comfortable about the proposal and presenting it to the RDA and the Common Council now.”
Added Mulherin, “We’ve been very pleased with our conversation and negotiations with city officials. They understand that this is a unique property and no one wants it to fail.”