In the Path of a University City Costco, the Displacement Has Already Begun 

Immigrant-owned businesses have started filing out of Jeffrey Plaza as plans to demolish the shopping center for a Costco move forward.

ILLUSTRATION BY EVAN SULT

Immigrant-owned businesses have started filing out of Jeffrey Plaza as plans to demolish the shopping center for a Costco move forward.

Inside a Costco, anything seems possible. It is a monument within itself, a vastness of pallets and supersized packaging, aisles selling widescreen televisions and caskets and rotisserie chickens. And it is astonishingly lucrative for both the corporation that owns it and any city that hosts it.

That is why, for the promise of a new Costco — and the expected influx of millions of dollars of desperately needed tax revenue — University City is willing to wager a chunk of its soul.

The $190 million project, dubbed "University Place" by Webster Groves-based developer Novus, would install a 158,000-square-foot structure to house the behemoth wholesale club just off the intersection of Interstate 170 and Olive Boulevard, one of the city's most diverse commercial corridors.

Olive is a street of contrasts. It is home to numerous small businesses, and although it is among the densest urban stretches of St. Louis County, it is in disrepair. In many places, the areas between storefront and street are slabs of uneven concrete, the ground bulging and cracked, and cars often use these surfaces for parking, right there on the "sidewalk." Pedestrians must find their own way around.

But for years, what they also find on Olive, to their delight, is a galaxy of immigrant-owned restaurants, making the street the closest thing the St. Louis region has to a Chinatown.

Driving west on Olive toward I-170, one passes an unassuming strip mall called Jeffrey Plaza, home to more than a dozen businesses, a celebrated sushi restaurant, a barbershop and an East Asian grocery. In 2018, the strip mall got a new owner: Novus Development.

In the renderings Novus submitted to the city that year, the entirety of the strip mall is erased within the vast boundaries of a parking lot and the Costco itself. The full project requires razing 67 homes, dozens of apartments, two churches and a school, among other things.

There are all very reasonable reasons to do this, University City officials say. By unleashing millions in new tax revenue, they believe Costco can help revitalize slumping neighborhoods and protect the city from future financial calamities. As part of the deal with Novus, University City committed $15 million in community benefits earmarked for improvements in the Olive corridor and the northern, predominantly black Ward 3. There, neighborhoods remain in a stranglehold of bottomed-out home prices, and the communities are on a downward path of disinvestment and disrepair.

Not everyone is onboard. A spirited opposition movement raised alarm at the scale of displacement, including the loss of longstanding, successful small businesses. Despite vocal efforts, the project is now beyond the reach of its detractors. In June, the city council approved a development agreement with Novus, pledging $70 million in diverted property and sales taxes to help make the project more than just a rendering.

But while "University Place" remains a project that exists only on paper, the people living and working in its footprint are already feeling the squeeze. They can't rent their buildings to tenants when they don't know if they'll be forced out, and they can't sell their homes (or make plans to move to new ones) until Novus' say-so. In more than a dozen interviews with University City residents, business owners, activists and city officials, the picture that arises is one of a city stuck at the starting line, and several use the same word to describe their predicament: limbo.

On the ground, University City's residents and businesses are facing these consequences alone, while Novus insists, with a combination of caution and confidence, that the end is near. Novus tells RFT that it aims to finally start construction in the first quarter of 2020.

But the reality is that not even Novus is willing to guarantee that the Costco project's financing will come together. In the meantime, some in University City are anxiously waiting their payday and relocation. Others are just trying not to fall apart.

Longtime University City resident Letha Baptiste says Novus isn’t paying homeowners in the path of the project enough for her to leave her house. “I’m not for it at all.” - DANNY WICENTOWSKI
  • DANNY WICENTOWSKI
  • Longtime University City resident Letha Baptiste says Novus isn’t paying homeowners in the path of the project enough for her to leave her house. “I’m not for it at all.”

For more than 30 years, Letha Baptiste has lived in a 900-square-foot house on Elmore Court, a cul-de-sac of houses built in the 1950s, many smaller than modern-day two-bedroom apartments. Along with Elmore, this corner of Ward 3 has three similar cul-de-sacs, or "courts," named Mayflower, Richard and Orchard — and in Novus' plan, all four are due for "redevelopment."

"They're all just like me," Baptiste says of her neighbors. "We're playing a waiting game."

According to property records, Novus, through its affiliate organization U. City L.L.C., has purchased four of the 54 houses within the "courts," three on Mayflower and one on Richard. However, Novus claims that it has already signed options to buy 90 percent of the residential properties within the project site, and that just nine homeowners remain uncommitted.

On Elmore, however, Baptiste has rebuffed Novus' attempts to get her house.

"I can't speak for anybody else, but I've been here for a long time. I was expecting to stay here 'til my last days of life," she says. "I never ever dreamed of having to move just because they wanted to do a big box store."

Last year, Baptiste says she answered a knock at her front door. On the other side was a representative from Novus, who told Baptiste that the development project would require the site cleared of existing structures (like her house) and readied for construction. Baptiste says she was offered an option contract to buy her home at a later date.

One of her neighbors got the same offer and eventually took it, she says. On Elmore and the other residential courts, home assessments generally land at about $70,000. While Novus never made a direct offer to Baptiste, she says that the prevailing rumor was that the developer was offering homeowners $150,000.

"My neighbor was telling me, 'You need to make up your mind, because if you get whatever they're offering, that's good money,'" Baptiste says. "That's good money to him. But not to me."

Baptiste remembers feeling unconvinced and underwhelmed by Novus' development, as well as the price they reportedly offered. She didn't see a good reason for the redevelopment project to uproot her neighborhood. She told the Novus representative, "I'm not interested."

The Novus representative was, at first, undeterred. "She kept coming back every other week," Baptiste says. "She even went as far as to bringing me a Christmas present, good nuts, so I ate them of course. I still said no to her."

Across the street from Baptiste, Jeff Sharmey and his brother similarly rejected Novus' offer. In an interview by phone, he says he simply doesn't want to move. Despite the buyout offer and promised relocation assistance, he doesn't see his finances stretching far enough to stay in town. "There's nowhere in University City that suits me for what I can afford," he says.

Some might call being priced out of your own city an example of gentrification. Sharmey just calls it "a bunch of junk."

"How does someone make someone move if they don't want to move?" he asks angrily. "I think it's a big waste, a waste for nothing, and it aggravates everything."

And it was aggravation that met the city when, during a series of hearings in the spring and summer of 2018, it first unveiled the plan to the public. During a four-hour public hearing in May, more than 700 people showed up, and more than a few let loose at the presence of Novus president Jonathan Browne. Among other things, they demanded the city and Novus reach a Community Benefits Agreement, add affordable housing to the project and conduct a public vote on the whole matter.

Through the jeering, in a scene caught on video, Browne pleaded with the crowd. "Listen to me, this is good for you," he said. "Do you want me to walk away?"

A few voices shouted, "Yes."

But Browne persisted. "I heard at least one 'no,' that's all I need," he said. "I'm not alone here."

By then, Novus and University City had been in talks for more than a year, working their way through two rounds of proposals to arrive at the final plan to redevelop 50 acres on a prime location near a major interstate. Along with the city's mayor and city council, some residents also saw Novus as a boon.

One homeowner, who lives in one of the courts (and who asked not to be identified by name), says that he decided to sign an option contract with Novus because it was "an opportunity to find something different."

He acknowledges that not everyone in the neighborhood feels the same way. But with his kids grown, he says that he and his wife were already planning to move out of University City. When asked about the price he agreed to, he declines to specify a number, citing a confidentiality agreement he'd signed with Novus.

"I didn't get everything I wanted," he admits. "I told [Novus], if they give everyone $200,000 or more, this would have been solved a long time ago."

Time, though, isn't on the side of even those residents who have signed on to Novus' plan. The unnamed homeowner says he's frustrated with Novus' "deadlines," which seem to disappear without reason. He complains that he's researched potential houses for future purchase, only to see them leave the market while he waits on the developer.

Back on Elmore, a renter of one of the small homes tells the Riverfront Times that she's only recently learned about the Novus project and worries that she may have to move in a matter of months. Judy Forland's landlord has given her no notice or alert. She doesn't know where she'll move, or if she'll qualify for relocation assistance.

"They said they are going to help relocate us, but they haven't given us a date," Forland says. "I don't know the story. I don't know if they could come today or tomorrow."

And so the waiting game stretches on. For University City officials who back the development, it's a game the city can't afford to lose.

Councilman Stacy Clay says University City is committed to pouring millions in new tax revenue into Ward 3, where homes values have never recovered from the recession. - DANNY WICENTOWSKI
  • DANNY WICENTOWSKI
  • Councilman Stacy Clay says University City is committed to pouring millions in new tax revenue into Ward 3, where homes values have never recovered from the recession.

On a recent Sunday, University City Councilman Stacy Clay parks his SUV in front of a two-story home on Wellington Avenue, in the center of Ward 3. The house, sandwiched between tidy lawns and crisp brick homes, has been unoccupied for years. It is decorated with a handful of nuisance abatement orders.

"When property values get depressed, you get a house like this going for $30,000 or $40,000," Clay explains. "The only reason it looks as 'good' as it does" — and here he emphasizes the sarcasm on the word good — "is because it was recently cited."

When home values plummet to the $50,000 level, Clay explains, banks demure at making loans, leaving the structures ripe for snatching by outside investors who have no intention of living there or, for that matter, mowing the grass more than twice a year.

One of Clay's constituents, a woman who lives down the street, pulls up in a white sedan and rolls down her window to talk with her councilman. She shares some gossip about the house: Apparently, she says, the house's elderly owner moved and left it to a relative living across the street. The relatives "didn't want to do a thing with it" and sold it for $35,000 to an investor, sight unseen.

"It just dropped all of our property values," she says, adding that the new owner "has never been here since."

Clay says similar examples are cropping up all over Ward 3.

"The Third Ward, to me, is a classic middle neighborhood," he says. "These are generally African American folks who have pride in their homes. When you have this dynamic in the midst of folks trying to maintain their community, trying to build equity in their homes, trying to do that American dream thing, it hurts."

From the house on Wellington, Clay drives south, crossing Olive Boulevard and into Ward 2, where home values are among the highest in University City. He passes two-story brick homes, tidy lawns and front doors with no visible nuisance orders.

"These homes, they're not appreciably different from the homes on the street we were just at," Clay remarks. "They're not many times larger, but they have a greater value because they're on the other side of Olive. Just the fact alone, irrespective of condition."

Absent owners and vacancy is a widespread problem in the metro region. In St. Louis city, for instance, the problem has reached overwhelming proportions, with roughly 7,000 vacant homes and structures, more than half condemned. In some parts of north St. Louis, entire blocks are gone, the homes gutted by a combination of thieves, vandals, fire and rot.

Clay drives east, crossing Olive and heading toward the border with Wellston, one of the most vacancy-riddled and poverty-stricken neighborhoods in St. Louis County. Here, the trees start to cave in on the street, and he passes what appears to have once been a one-story apartment complex, now completely abandoned.

"Blight doesn't respect municipal borders," he says. "It just kind of goes, and where it sees an opportunity, it's like water. It just intrudes and gets in."

Currently, Ward 3 may not look "demolished" like the worst stretches of St. Louis' vacancy crisis, but Clay makes the case that University City is being crushed by the combined forces of low home prices and bank mortgage policies that continue to keep good buyers out of Ward 3. He worries that his neighborhoods will wither in an economic vacuum, becoming steadily abandoned and uncared for.

This is why Clay says he's hopeful about the Costco development planned on the far western border of his ward: When the plan was first announced publicly in April 2018, city officials touted a benefits package that earmarked $10 million specifically for Ward 3 improvements, with $7.5 million coming as an upfront payment after Costco signs a lease. Another $5 million would go toward improving the commercial corridor of Olive Boulevard.

In fact, former University City Community Development Director Rosalind Williams, who helped kickstart and plan the project's early stages, describes the entire retail development, including the Costco, as a kind of "diversion" from the real goal.

"The whole reason why I think everybody bought into this is the Third Ward did not recover from the recession," she says. "This whole TIF thing was a little diversion from the fact that the Third Ward needs action and attention from the city now, before it's really too late."

Tax increment financing, or TIF, is a method that cities use to fund private development. The basic idea behind it is that if a city can argue an area is "blighted" – a technical designation that can mean as little as cracked sidewalks – then it can entice a developer with a TIF, which is derived from the area's property and sales taxes. The city, in turn, can then issue bonds on the TIF, thus turning the future property tax revenue (which otherwise would go to fund things like schools and public safety) into present-day subsidies for the developer.

When it comes to University City, the council's promised investment of $70 million in public funds would make up nearly 40 percent of the development's total cost. While Novus and Costco are private entities, the proposed "University Place" is a mixture of public and private resources — and the public benefit, Williams insists, would be most sharply felt in Ward 3.

But reversing Ward 3's slide will take work. And lots of money. She suggests that, with $10 million, the city could buy out some of the investor-owned homes languishing in disrepair, or even subsidize developers to buy them and rehab the homes, thus increasing their value on the market to the point where a bank would actually be willing to provide a loan.

It will take more than just a "home improvement program," Williams adds. The history of University City, and its Third Ward, is also a history of how the racist housing policies of segregation and Jim Crow extended into into "redlining," which used the pretense of "blight" to deny loans to predominately black areas.

"The dynamics of redlining, the mortgage gap, low appraisals and lack of confidence of even homeowners trying to sell their house, it's a dynamic that has to be reversed," Williams continues. "It's something that's going to take a lot of wheels spinning at the same time."

To begin the work in Ward 3, however, the development needs to start in earnest. Novus needs to raise $110 million on its own. Until then, without Costco and the other proposed retailers, there is no money to pour into Ward 3.

As the months have dragged on, the project and its $70 million proposed investment have been dogged by controversy. To Williams, it's a frustrating but familiar feature of publicly subsidized private development.

"When you try to add a component of public benefits to a private development, somehow no one wants to listen to why we are trying to do this," she complains. "There's a mistrust that government would actually do anything that benefits anybody."

Kathy Tripp, who saw what Novus did in Sunset Hills, sounded an alarm on the new University City project. - BRIAN KING/@BKJPHOTODESIGN
  • BRIAN KING/@BKJPHOTODESIGN
  • Kathy Tripp, who saw what Novus did in Sunset Hills, sounded an alarm on the new University City project.

University City Councilwoman Paulette Carr is among the strongest backers of the proposed development. But last year, she discovered that one of the loudest calls of dissent was actually coming from inside her own house. Literally.

Carr's housekeeper, Kathy Tripp, and Novus go way back, and not in a good way. More than a decade ago, she opposed a proposed Novus shopping center in her own hometown of Sunset Hills. When she learned in 2018 the developer was planning another major project, this time in University City, she tried to warn Carr about Novus' history. But the councilwoman had no interest in discussing the city's development policies with the hired help.

According to Tripp, Carr "didn't want to talk about it, so I stopped talking about it with her. But there was still this thing nagging at me." She adds, "I just wanted to make sure they knew who they're in business with."

Tripp's own business with Novus began in 2004, when the developer and the city of Sunset Hills embarked on a redevelopment project named Main Street at Sunset. It called for the redevelopment of 254 homes, among them the one occupied by Tripp. Along with other residents, she turned up to city meetings, pestered Novus' Browne with questions and eventually made enough of a nuisance of herself to get quoted in news coverage, thereby drawing attention to Novus' possible use of eminent domain in the project.

At the time, it was an open legal question as to whether eminent domain — a legal process that allows governments to compel the sale of property "for public use" — could be used to aid private development. In 2005, the U.S. Supreme Court case of Kelo v. New London ended in a controversial 5-4 decision, with the court ruling that a development's projected economic growth, including additional taxes generated and jobs created, met the standard for "public use."

And suddenly, developers like Novus had a massive piece of leverage with which to negotiate with homeowners.

Sunset Hills approved $60 million in public funds, mostly through a TIF, and Novus' next step was to obtain financing for the $160 million shopping center and its anchor, reportedly a Macy's. In 2005, with the project seemingly a done deal, Novus sent letters to homeowners under option contract, laying out a schedule of closings on their homes for the next month. The letters were signed by Novus' president, Jonathan Browne.

With the end seemingly in sight, dozens of owners started to gut their homes, presuming that the structures would soon be demolished anyway for parking lot and retail space. The owners ripped out their air conditioning units, copper wires and anything of value. They took out new mortgages for new homes and made plans for their new properties.

Then the Sunset Hills project collapsed.

The memories are still vivid for Tripp. In May 2018, she authored an op-ed published in the St. Louis Business Journal, titled, "University City development proposal mirrors failed Sunset Hills plan." As she had done with her employer, Carr, Tripp again attempted to raise an alarm about Novus, which she blamed for devastating her neighborhood thirteen years ago. She wrote:

"Four days prior to Novus' deadline to execute the home options, it announced its bank funding had collapsed and it would not be closing on the homes. While Novus insisted it was continuing to seek funding, the company never closed on a home, never again announced a tenant, and never built a thing at Main Street at Sunset ... The residents of Sunset Manor saw only broken promises and a neighborhood ravaged by the threat of a development built on TIF money and eminent domain."

As a final strike, in 2006, a judge ruled on a lawsuit filed by opponents to the Sunset Hills project, finding that a cost-benefit analysis given to the city hadn't provided "sufficient information" to evaluate whether the project was feasible. The judge struck down the $40 million TIF commitment as a violation of Missouri law.

Tripp had spent years fighting Novus. But for her employer, Carr, the op-ed represented something more nefarious. When Carr discovered Tripp's writings, the city official reacted decisively. She fired Tripp by text.

Two weeks later, in Carr's monthly newsletter to constituents, she blasted Tripp by name amid a scorching, 5,000-word diatribe titled, "Are Outside Forces Threatening the University City Redevelopment Plan?" in which Carr insisted that not only was the city's project not like the one that crashed and burned in Sunset Hills, but that the Sunset Hills failure had actually been perpetrated by those who now wanted to see Novus fail.

University City, Carr wrote, could not afford to see the project collapse in squabbles.

"For the last 50 years we have been talking about redeveloping Olive and for almost 20 years, no significant, catalytic redevelopment has taken place in University City," Carr wrote, defending the use of TIF funds — and suggesting that the presence of opposition indicated the presence of "outside forces" threatening University City.

Ominously, Carr wrote that these threats were "not unlike the type of forces" that had helped end Novus' development in Sunset Hills.

Tripp, though, insists that she isn't part of a nefarious force of development destroyers. "It was never my intent to go into University City and derail their project," she says.

Still, six months later, Novus' project would indeed, briefly, leave the tracks.

For businesses inside the footprint, such as Beyers Lumber & Hardware, relocation assistance will be on a “case-by-case” basis. - DANNY WICENTOWSKI
  • DANNY WICENTOWSKI
  • For businesses inside the footprint, such as Beyers Lumber & Hardware, relocation assistance will be on a “case-by-case” basis.

In January 2019, University City released its proposed redevelopment agreement with Novus, seemingly setting up the final steps before its approval by the city council. At this point, however, a retired engineer threw a wrench into things.

"When the plan came out, and I read it, and some things you gotta knock your head against the wall twenty times before you notice something," says Gregory Pace, a University City resident and self-described gadfly. "I got to the city revenues, and I saw the numbers were huge."

The numbers had come from PGAV Planners, a consulting firm hired by the city, and which had previously worked with Novus on multiple projects (including the disaster in Sunset Hills). PGAV's report, issued that summer, showed Costco's first year of projected operations as coming in 2020, with the countywide sales tax revenue for those properties in University City leaping year-over-year from $58,000 to a whopping $517,000.

Eventually (presumably on his 21st re-re-reread) Pace spotted the error.

"I went 'Oh my god!'" he says, "They thought we're a point-of-sale city and that we're going to keep 85 percent of the sales tax!"

Here's what happened: PGAV calculated the projected sales tax revenue of the project over the next two decades, but got one key piece wrong. In reality, University City is a "pool city," in that it, along with some other municipalities in St. Louis County, contributes 100 percent of their local sales taxes into a shared, countywide tax pool. In return, the county distributes the revenue to the pool members based on population. (It's a good deal for the densely populated University City, which gets more out of the pool than it puts in.)

But when PGAV ran the numbers, it presumed University City wasn't a pool city, but a point-of-sale city that keeps most of its sales tax revenue at the outset. It wasn't a small mix-up. When Pace ran the corrected numbers through the project's two-decade lifespan, the revenue came out reduced by more than $20 million.

David Harris, a real estate attorney and University City resident, compiled the updated financial tables and brought them to a city council meeting on January 14. By the end of the month, the council's planned vote to finalize the project had been delayed, and its fate — and the promised $15 million for Ward 3 — hung in the balance.

"The error blew a hole in all those calculations," Harris says.

It was the sort of mistake that, perhaps, Novus and the consultant PGAV would be expected to avoid. After all, during the Sunset Hills debacle, in which Novus had been sued by resident watchdogs, a judge had blasted the insufficient data in the project's cost-benefit analysis, which had been produced for Novus and Sunset Hills by, yes, PGAV.

Now, thirteen years after Sunset Hills, PGAV had (apparently accidentally) given a new city data that wasn't just insufficient, but financially unworkable for everyone. University City's problem was multiplied by its promised benefit agreement for Ward 3. Now, with a giant hole in the city's projected revenue, Harris and others wondered: Where would that $15 million come from now?

The question didn't seem to bother Novus.

"Our end, I will say, is moving forward and fine," Browne told the St. Louis Post-Dispatch after the error was discovered. "All I can say is the request was economically sound a couple of weeks ago. It is not economically sound today without adjustment."

But even before the error was exposed, the development agreement between Novus and University City was already a subject of consternation: Renters and businesses tenants say months passed without updates from Novus. And although city leaders had previously vowed, unequivocally, not to rely on eminent domain in order to clear homeowners from their properties, that portion of the final agreement now included an additional line: "Except as determined by the City Council in its sole and absolute discretion."

To Harris, between the project's clumsy public rollout, the errors in the revenue report and the ambiguity about promised benefits, the situation called for University City to take a stronger role.

That didn't happen.

"There's just something fundamentally wrong about this," Harris says. "It seems to be more to benefit a private developer and Costco, one of the biggest corporations in the country, which gets this huge subsidy to come into the city."

In May, University City and Novus announced a new development agreement — with the most significant changes made to the benefits slated for Ward 3 and the Olive corridor. Now, instead of $7.5 million up front, Novus would chip in just $3 million. Instead of the $500,000 annual payments, Novus would guarantee only up to $200,000 per year. (The remaining money would be filled in by other new taxes and revenue generated on Olive, the city promised.)

On June 10, the University City council unanimously approved the $190 million development deal, complete with $70 million of the city's future taxes and the possibility of eminent domain being wielded by the city council's "sole and absolute discretion."

Harris, though, argues that aside from not making financial sense, the deal presents an impossible scenario for residents. In nearly every way that matters, their future is out of their hands.

"I think about the people who are stuck in the middle," Harris says. "It pits neighbor against neighbor, business against business, tenants against owners. And the city allows it to happen."

At this point, with Novus wrapped in the opaque process of obtaining financing, Harris says University City should be supporting its residents even more, not standing on the sidelines and waiting, like everyone else, for another update from the developer.

"The city is saying, 'This is just between buyers and sellers, we're not involved,' but that's not the way it is," he argues. "The people who put these residents in that situation are the developer and the city. It's put them in a limbo."

Businesses in Jeffrey Plaza are on six-month leases at this point. - DANNY WICENTOWSKI
  • DANNY WICENTOWSKI
  • Businesses in Jeffrey Plaza are on six-month leases at this point.

On a visit to Jeffrey Plaza in July, there's little evidence of the change in ownership. Still, one shop owner (who asks not to be named) presides over a storewide sale, a sign of his impending move.

"Everybody's lease is up," he says. "They don't know what's going to happen, and they don't know when it's going to happen."

When Novus bought the strip mall in 2018, he explains, tenants found that new leases were being offered only in six-month intervals. It was frustrating for the small businesses of Jeffrey Plaza, but certainly made sense for Novus: The new landlord hoped the strip mall would soon be obliterated to make way for Costco's construction. The stores were just in the way.

By August, the sale is over, and the storeowner's shop is vacated, leaving one less business for Novus to deal with when it's finally time to clear out Jeffrey Plaza. But the owner's summary of the predicament with Novus — no information, no timeline — is echoed the critiques emanating from other small businesses in University City's unofficial Chinatown.

Many of the businesses affected in University City — particularly those run by immigrants and non-native English speakers — had been blindsided by the news, says Caroline Fan, who at the time served as the executive director of Missouri Immigrant and Refugee Advocates. The group arranged for translators and produced Spanish and Chinese versions of the project's documents.

"It's been kind of stunning how bad University City has been in giving businesses any kind of update," Fan says. "It's been a non-transparent, non-respectful process."

And, at least during the initial public hearings, immigrant-owned businesses started speaking out. In a June 2018 interview, a spokesman for the family-run Vietnamese eatery Pho Long, located in Jeffrey Plaza, told RFT contributor Alison Gold that when he reached out to University City, the response was that it was "not feasible" to update business owners directly.

Six months later, when University City Councilwoman Paulette Carr released her scathing newsletter defending the Costco project (while blasting "outside forces" opposing it) she cited a supporter's calculation that it would take "more than 200 Pho Longs to equal the taxable revenue of Costco."

The math is hard to argue with.

For businesses in the redevelopment zone, the writing on the wall is clear. Multiple businesses have left or are in the process of exiting University City. But for property owners like Max Tsai, whose family owns significant chunks of real estate within the proposed development, including an urgent care and grocery, the process has been at a standstill for years.

According to Tsai, Novus first approached him back in 2017, but he was offered only an "option to purchase."

"For us, that didn't make sense," Tsai says. "It wasn't a real negotiation. They're concerned about how much they'll make and not concerned about how much we're going to lose."

Ed Beyers, the owner of Beyers Lumber & Hardware, says the ambiguity has left his business on the chopping block with no apparent solution.

"You can't make any decision, because you don't know what's going to happen," he explains. "It's been that way for a year and a half. I don't care which way it goes, just so they make their damn mind up. I'm sick of it."

Next door to Beyers' business, his longstanding tenant, a BMW repair businesses called Bavarian Inc., has already made contingency plans to leave. In an interview, owner John LaClair confirmed that "we're moving because of" the coming development. LaClair's business, which counts nine employees, has called University City home since 1989.

"If Novus is coming through, they're tearing my building down," he says, adding that he only bought a new location after seeing Novus' first projected timeline, which scheduled demolition to start in November 2018. He doesn't envy the people whose futures remain pinned to Novus' timing.

"Their lives are in limbo," LaClair says, noting that he's already paid $150,000 to prepare the new location, including $12,000 just to reinforce the floors to hold the car lifts.

"I needed to protect my employees," he explains. "If the Costco does improve the area, then fine. If it doesn't, and it all goes to hell, it's a bad thing. I could not go into this unprepared."

Novus president, Jonathan Browne, hopes to start construction in the first quarter of 2020. - COURTESY NOVUS DEVELOPMENT
  • COURTESY NOVUS DEVELOPMENT
  • Novus president, Jonathan Browne, hopes to start construction in the first quarter of 2020.

When it comes to University City and Novus, the unknowns seem to accumulate. As Tsai and other business owners twist in the wind, the concerns raised by the watchdogs like Kathy Tripp, David Harris and Gregory Pace remain unresolved.

But in an interview last week, Novus' president, Jonathan Browne, provided the most optimistic timeline to date, telling RFT "we're weeks away from triggering the contracts for closing" with the roughly 70 homeowners in the 50-acre development site.

So far, Browne says that Novus has already spent $8 million on the project. Like everyone involved, he's eager to get construction started — but he knows the danger that eagerness can bring to a project.

"I feel like I'm holding back a team of anxious horses here," he jokes, at one point, but he acknowledges the danger of over-confidence. Like Tripp, he hasn't forgotten the damage wrought in Sunset Hills, where, he says, "people got their carts before their horses, even though we were telling them not to."

It's the risk of repeating Sunset Hills, Browne explains, that's partially behind Novus' hesitance in publicizing projected timelines and deadlines.

"We are right on the cusp of hitting the 'go' button, and it's hard to get people to not jump the start," he says. "I know it's excruciating to wait this long, and we've come a long way, but we don't want anyone doing anything before closing. We cannot give them any inclination that this is a guaranteed thing."

Addressing critiques from business owners, Browne counters that Novus is already "bending over backwards" to negotiate fair prices. In Jeffrey Plaza, he notes, Novus has committed to delaying demolition of the strip mall until a new retail site is built to host the relocated businesses.

But considering the fact that businesses and tenants in the development site are already leaving, it's not clear how many businesses are willing to trust Novus. It's also not clear whether it makes financial sense for those businesses to stick around: According to the redevelopment agreement, Novus is prohibited from raising the rents on the former Jeffrey Plaza tenants ­— for two years. After that, the businesses will face "an increase to market rental rate."

Ultimately, Browne says that beyond the commitment to delay demolition of Jeffrey Plaza, the struggles of its tenants aren't his company's problem.

"Jeffrey Plaza is no prize," he says. "That is old, dated, worn-out space, and we're going to put them in modern space. I just smirk when people talk about 'ruining the fabric' of these wonderful restaurants. We're accommodating them."

Still, while defending his company's practices, Browne maintains that the efforts will indeed pay off, especially for Ward 3 and its real estate values. He calls the increased sales taxes generated by the development — estimates included in city planning documents show projected taxable revenue from a Costco's first year of operation topping $60,000,000 — "a bonus for the entire community."

In the meantime, Novus continues its secret negotiations with residents and businesses, though it appears the developer is bringing more pressure to bear on those still holding out.

According to a June letter that Novus sent to homeowners signed to option contracts, the developer reassured residents "who partnered with us in the past" that they would not see their prices lowered, despite the fact that the deal with the city was renegotiated, and that eminent domain was now clearly on the table as a method of last resort.

But for the rest of homeowners in the development footprint, that isn't the case.

"For those neighbors who are not under contract, we would encourage them to quickly reach out to our office and discuss," the letter stated, and warned that those "who are waiting to sign [and] attempting to force a higher sales price need to understand that there is much less available to offer than there was in our budget a year ago."

The reason for that budget cut? It's not just the threat of eminent domain. The letter directly blamed "the $23 million error due to the city's consultant."

The project marches on. City leaders say Ward 3 is ready for its comeback, and Novus insists "University Place" won't become another Sunset Hills. But once again, it seems, Novus' costs and University City's blunders have been passed to the residents, who can only wait, and worry, for the full bill to come due.


Editor's note: Some wording story was updated after publication in order to better describe the University City TIF.

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