Developers ask Mount Vernon IDA to extend pilot for Heritage House South as Fund City prepares to open

Developers of the Sanford Boulevard retail center told the Mount Vernon Industrial Development Agency on Aug. 14 that they need an extension of an existing pilot agreement for the south parcel so Fund City can proceed with construction and investment. Representatives for the property’s owner said Bed Bath & Beyond’s bankruptcy reduced rent at the center and that Fund City — characterized by developers as a destination entertainment tenant — sought predictability in tax treatment before committing funds. The developer said TJ Maxx’s lease included a rent-reduction clause that lowered rent after a prolonged vacancy, creating a revenue shortfall at the property. The applicant requested extension of the pilot for the south parcel and signaled a forthcoming request to extend the land-lease term on the north parcel to improve marketability for a potential sale. Developers said they are marketing the property and that extending pilot and lease terms to align expiration dates would facilitate a sale. Board members declined to vote at the meeting, saying they had received the application too recently and needed an independent financial analysis of tax impacts, job and enrollment multipliers, and the Uniform Tax Exemption Policy (UTEP) implications before making a decision. The board asked staff to coordinate a rapid review with outside analysts and to convene a working group including agency staff, the developer, and municipal fiscal advisors. Members discussed enforcement and monitoring provisions in pilot agreements, including safeguards that require payments if projected metrics (such as pupil counts tied to UTEP calculations) are not met. The board asked that any employment and enrollment metrics and enforcement procedures be clarified in the application and pilot documents before a final inducement vote. The board noted the south-parcel inducement application was the only formal submission before the IDA at this meeting; an application for the north parcel and an extension request for the north land lease were expected in coming weeks.