The city has agreed to grant $755,000 in development incentives to the Wausau Center mall’s owner under a five-year agreement.
According to the agreement, approved Tuesday by an 11-0 vote of the City Council, the city will grant the mall a one-time payment of $375,000 — money it obtained when it refinanced the Wausau Center property in 2012. The city also would waive the mall’s rent for five years, at $76,000 a year, for a total of $380,000.
In exchange, the mall’s owner, CBL & Associates Properties, will pledge to fill the space vacated this month by JCPenney with a new retailer with a 10-year lease. CBL also will commit to diversifying the mall, now predominantly a retail outlet, by adding more attractions, such as a movie theater, restaurants and other entertainment.
The mall owner will reimburse the $755,000 to the city if CBL does not redevelop the Wausau Center as planned.
Council members said they were confident with the agreement because it requires the mall operator to earn its incentives — a deal struck after hours of closed-door negotiations between CBL and the city’s Economic Development and Finance committees.
“This resolution is the product of compromise,” Economic Development Committee member Lisa Rasmussen said. “It’s not just us giving them something. We decided if it’s going to be for that long, five years, we want something in return.”
CBL asked the city last month to waive one year of rental and other fees totaling $146,000 — a request both the Economic Development and Finance committees unanimously recommended. Before the full City Council considered the issue, however, CBL announced its plans to sell 21 of its malls and declined to say which ones.
The council then voted 9-1 to send the request back to the Economic Development Committee in the hopes of hearing from CBL representatives directly. That meeting happened earlier this month, when CBL Chief Financial Officer Farzana Mitchell described the mall as “in dire need” and “at a crossroads.”
JCPenney, an anchor store for the mall, closed the first week of May, within months after the Gap and Hollister stores shut down.
“JCPenney won’t be here again, but only by our action can we prevent more losses,” Finance Committee Chairman and council member Bill Nagle said. “We have the power to stop this erosion as a council.”
Council members said the partnership with the city will make the Wausau Center more attractive to future tenants.
“It allows stability; they already have some interested tenants for the JCPenney space,” Rasmussen said.
“If the mall is sold, it may not be such a bad thing, but it needs to be in good shape,” City Council President Romey Wagner said.
The mall and its tenants have more than 700 employees.
CBL, Sears, Younkers and JCPenney pay property taxes at the mall, totaling about $992,000. They also have a parking lease for the ramps, for which they will pay about $140,000 in 2014.
CBL, which has leased the property from the city since 1980, manages 91 malls across the country.