The Broomfield City Council gave a major boost to the FlatIron Crossing mall Tuesday, approving a plan to spend more than $25.6 million to help the shopping center's owner rebuild the now-vacant Lord and Taylor building, add a 140-room hotel and redevelop the underperforming Village at FlatIron Crossing.
City and County Manager George Di Ciero said the deal was the result of years of study to determine how to keep the shopping center profitable in an increasingly crowded market.
Since 2005, The Orchard Town Center at 144th Avenue and Interstate 25 in Westminster and the Shops at Larkridge at Colo. 7 and Interstate 25 in Erie have opened, increasing the competition for shoppers from Broomfield and the region. Several stores and restaurants have left the Village at FlatIron Crossing during that time.
The estimated cost for the FlatIron projects is $52.9 million. Macerich Corp., the mall's owner, will cover the initial cost. Broomfield will reimburse Macerich a portion of the cost once early phases of construction are complete and new tenants are generating sales-tax revenue.
The city will split the 3.5 percent municipal sales tax with Macerich to fund the projects. Other portions of the sales tax, including the tax collected for parks and open space, are not affected.
The city expects it will collect $42.6 million in sales and property tax revenue over 25 years from the new construction.
The city hopes the deal will not only bring in new tax revenue, but protect revenue the city is currently earning. Sales tax revenue from FlatIron Crossing was $13.88 million last year.
The biggest slice of the city's money will go to gutting and reconfiguring the empty Lord and Taylor space. Macerich last month announced it had reached agreements with the Container Store and apparel chain Forever 21 to fill the building, which has been vacant since 2005. The company is still searching for a third tenant.
Macerich will spend $16.7 million to purchase the building from Lord and Taylor and remodel it for its new tenants.
Rob Luciano, the company's assistant vice president of development, said the overhaul would be cheaper than tearing down the building and starting from scratch. Work should be completed by Dec. 31, 2011.
Macerich plans to tear down part of the Village and reconfigure pedestrian and traffic flow. Bloom and Village Tavern restaurants will be moved and spaces for two "fast casual" restaurants will be added.
The reconstruction will cost $17.9 million and is scheduled to be complete by the end of 2013.
The final component is an upscale boutique hotel to be built by the end of 2012. Macerich has not announced details about the project, but the Hotel Indigo chain has said it plans to build at the site.
The hotel will cost $18.3 million to build.