T-R PHOTO BY ROBERT MAHARRY — Reserve Development’s Glen Kitto, left, and Marshalltown Area Chamber of Commerce President/CEO John Hall, right, address the city council about the plans for the redevelopment of the Marshalltown Mall, which will be known as Shops at Marshalltown, during Monday night’s meeting.

The fate of the beleaguered Marshalltown Mall has been one of the hottest topics in the community over the last year and a half, and on Monday night, the city council got a chance to hear from a representative of the Texas-based development company that has purchased it about plans for the future and a proposed 20-year Tax Increment Financing (TIF) rebate agreement in an amount not to exceed $7.25 million.

With renderings of the Shops at Marshalltown behind him, Reserve Development’s Glen Kitto, who resides in Dallas but originally hails from the Twin Cities, presented what he described as “a grand vision” for the repurposing of the mall, which he did not feel could happen without TIF incentives.

“It’s economics, and we can’t attract national tenants without a brand new looking mall facade. So without those dollars available to us, we will never get the type of tenants who you think, and likely will, be here,” he said. “So it’s very important for us to get tax incentive financing in order to make that happen.”

As he opened up the floor to questions, Mayor Joel Greer quickly sought to clarify that contrary to what KCCI had reported in a story that ran over the weekend, the new owner was not the Kohan Retail Investment Group, which had previously owned the mall and failed to pay the utility bill for months before power was shut off in common areas in November of 2023. Greer said he had received several calls on the matter and wished to set the record straight.

“We’re a small development firm. There are four of us. We’re not a 4,500 person firm, and we do this for a living. This is all we do,” Kitto said. “This will be the largest conversion we have done to date by a factor of about two… We know what we’re doing. We execute where we say we’re gonna execute, and in every case where we have done this in a previously blighted retail area, it’s done tremendous things for the retail area.”

Kitto added that while many residents may be clamoring to know which retailers they plan to bring to the mall, those companies like to make the announcements on their own time once leases are executed.

“They all know who’s gonna come. They all know each other. They all play together, but it’s like a waterfall. I’ve gotta get that first one signed, and then everybody else will quickly follow in the next four to six weeks,” he said.

Negotiations can ultimately take between six and 12 months, even as many have already signed letters of intent. Councilor Melisa Fonseca asked Kitto when the public could expect to see the mall looking the way it did in the renderings, and he replied that the first stores should come online by next March with the full redevelopment completed by August of 2026. They also plan to redo the parking lot.

Councilor Mark Mitchell inquired about rent increases for current tenants, and Kitto said any existing leases are required to be honored with no changes. From there, Marshalltown Area Chamber of Commerce President/CEO John Hall presented more details on the proposed development agreement, including a minimum assessment requirement of $23.5 million.

“To be clear, because I know there’s been some social media commentary on this, this is what would pay for the incentives, so there are no current dollars that the city is collecting that would be going to that payout. These would be new generated tax dollars as a component of this development agreement,” he said.

Over the first three years, the developers would receive a 90 percent rebate, followed by 70 percent in years 4-8, 60 percent in years 9-13, 40 percent in years 14-17 and then 20 percent in years 18-20. The agreement also includes performance metrics stipulating that if the expenditures do not occur, no new revenue is generated, and no new rebates are paid out. It requires that less than 10% of the rentable space will be allowed for office, medical, or limited visitor activity businesses, a limitation on self-storage in the facility to a maximum of 15% and restricting it from frontage on Center Street, and that at least 70% occupancy must be maintained.

“Additionally, within that 20 years, it ties the city and the owner of this property together in a way that ensures at least annual conversations, so if there are issues, we can hopefully catch them before we devolve into a standard like we’ve got out at the facility currently,” Hall said.

He touted some of the benefits of the deal as cleaning up an area that has become a community eyesore, a debt service carve out as part of TIF, new Local Option Sales Tax (LOST) dollars, ancillary expenditures like food, beverage and fuel purchases, encouraging shopping downtown, the creation of jobs both in construction and at the new stores, and last but not least, reestablishing Marshalltown as the area’s retail hub.

“We’ve lost that standing. We’ve lost that standing with nearby counties, throughout the county and even within the city. This gives us a chance to change that narrative, to begin becoming and realizing what it means to be a retail hub once again,” Hall said. “And with that, we know that additional resources and additional opportunities will come this way whether they be restaurants, additional retailers, additional services and the like.”

Councilor Gary Thompson sought clarification on whether the 70 percent occupancy rule went by number of tenants or square footage, if the storage space would count toward it and how the situation would be handled if the developer lost tenants and fell outside of the parameters of the agreement temporarily.

He also asked Kitto why Reserve hadn’t come to the council with a TIF agreement before they purchased the mall, as that deal has now been done for several months.

“We would’ve bought it without TIF. We won’t be able to put in the same tenants if we do. It’s still at a good basis for us, but we’ll never have the dollars to attract any national retailers like you see imaged behind me,” he said. “You’re not gonna get the beautiful new looking mall. You’re not gonna get the new parking lot. You’re gonna get Goodwill and a church. It still makes sense from an investment (perspective) to us, but we want to take it to the next level.”

Thompson said he loved that Reserve bought the mall and would shop there, but pledged to vote no on anything moving forward because, as a former small business owner, he didn’t believe in TIF being used to incentivize retail and would have preferred an abatement. In response, Kitto pointed to the Coral Ridge Mall as an example of a success story that has brought a tax revenue windfall to that area, and he clarified that the retailers themselves wouldn’t see any of the money — it only allowed the developers to put the infrastructure in place to attract them.

Mitchell asked about the length of leases, and Kitto said it varied by tenant, running anywhere from five years all the way up to 20 — 80 percent of the center, he said, will be locked in for at least 10 years. Rather than ask a question, Councilor Mike Ladehoff told the audience he was “really excited” about the project and felt there were safeguards in place with the agreement to hold Reserve accountable if the guidelines are not followed.

“I think we’ve been sitting here looking at this mall looking like that for 15 years anyway, and it’s time to get up and get going with it,” he said.

Greer also spoke positively of the plans for improvements at the Fridley Theater, which Kitto said will include electric reclining seats. Kitto estimated over 225 construction workers on site over the next 18 months and then about 250 employees across all of the retailers.

The mayor then opened up a lengthy public comment period that begin with Rick Spack, a wheelchair-bound resident of the Iowa Veterans Home who enjoys seeing movies at the theater, asking for signage or a pedestrian sidewalk to help him get from Center Street to the mall. Kitto told Spack that as part of the redevelopment, Reserve would have to comply “100 percent” with the Americans with Disabilities Act (ADA), and all sidewalks would be replaced.

Leigh Bauder recounted her own experiences working at the mall and cited the need for more retail options, but she didn’t feel that “tough questions” had been answered, like whether demographic studies and needs analysis had been conducted, which stores have been targeted and signed agreements with the developer, whether they were taking a “cookie cutter” approach to Marshalltown, how the mall might affect downtown small businesses and where the employees to staff the big box retailers would come from.

“I do have confidence in our staff. I do have confidence in the council and in the mayor, but before approving such a sweetheart deal that I see on the table, I would encourage you all to ask the hard questions and demand details and answers first, because this is the legacy that we will be leaving our children and our grandchildren,” Bauder said.

Dave Grieve questioned how many full-time jobs would be created at the mall and wondered why the developers needed tax breaks to be profitable, citing the recent example of voters in Kansas City rejecting taxpayer financing for new professional football and baseball stadiums. He also criticized “backroom deals” and public-private partnerships as catering to big businesses at the expense of small business owners.

“We keep giving more stuff out. We only give it out if they’ll come here. If they really wanna be here, come take our money because we know it’s going to a corporate coffer. It’s not gonna stay in town, so do what you want. Once again, why do I come up here and talk and just waste my breath?” he asked.

Jim Shaw described himself as “for the mall” but also said he was a former union employee at Fisher Controls who felt the city could continue to negotiate a better deal and save money in the long run. Janelle Carter, a downtown business owner herself, offered her support for the project and felt the mall would make the entire community better — the more the merrier, in her words.

Responding to some of the comments, Kitto said that for every dollar they receive tax incentives from the city, they’d be investing four times the amount, spending over $25 million in all to redevelop it in all.

“We’re giving you our money because we think it can be successful. The city’s gonna give us back one quarter of that in the same valuation over 20 years. At the end of the 20 years, the city gets 100 percent of the tax base that you’re gonna benefit from here. Think of all the things that that tax base can do to this town. It’s huge,” Kitto said. “It’s not going in our pockets. It’s going directly into the construction of this building. Nobody’s getting a dime from TIF money as a developer or a tenant. 100 percent of those dollars have to be spent in your town, in your building.”

Marshalltown Community School District Superintendent Theron Schutte recalled growing up here in the 1960s and ’70s when downtown, the 13th Street District and two different malls were thriving. In reflecting on a recent Junior Achievement (JA) lesson with first graders, Schutte brought up wants and needs and noted that 70 to 80 percent of his wants and about half of his needs now came from outside of Marshalltown. He offered his support for the plan and, despite the fact that the school district wouldn’t immediately benefit from the tax revenues, felt the opportunity was too good to pass up in the long run.

“And I would ask you not to just enter your personal opinions when you vote on this, but think about the constituents. Because I would guess that if this went before a vote today, 75 to 80 percent (of the public) would easily be in favor of bringing this project to Marshalltown,” Schutte said.

Marco Yepez Gomez expressed a sense of frustration that cities desperate for redevelopment and tax revenue were essentially forced into TIF agreements.

“Apparently they can never make the numbers work out by themselves no matter how experienced and connected they are in their business, and apparently the only thing preventing them from spending their money is a town who hasn’t agreed to give them tax subsidies yet,” he said. “And the sad reality is that we have to accept this TIF agreement because we have no real power to push back. To be fair, this isn’t a specific person’s fault or the city’s fault, for that matter. We are systematically at a disadvantage at making negotiations against these investors because of decades of bad policy from federal and state governments.”

He went on to question why the private developers were socializing the costs of their project and felt it was unfair to cities like Marshalltown. Yepez Gomez suggested backloading the rebate instead of backloading it. Hall responded to the remarks and said while he could appreciate the perspective, the mall was in “dire” condition before Reserve took it over.

“The reality is that we need the help of large national developers in order to do a project like this. We don’t have the wherewithal here in our market and the connections into these large national retailers to do it here,” he said. “There are good and bad actors in this. We know because we just came through what a bad actor really, truly looks like. We’re fortunate to have Reserve at the table and as quickly they have been at the table.”

He also noted that Reserve put their resources into fixing a burst water main before they had even closed on the purchase. After referencing the amount of coverage the mall has received in the Des Moines media market over the last few years, Hall urged the council to turn the page into “a new chapter” and celebrate “a great win.”

Councilor Jeff Schneider thanked Kitto for attending the meeting and felt the proposal was the only realistic path forward for the Marshalltown Mall. Fonseca asked Kitto how Reserve arrived at the $7.25 million figure for TIF, and he said they would primarily be used for exterior improvements to “make it beautiful,” ensure that the retailers had the uniform look and fix the parking lot.

She also asked if local contractors would be utilized, to which he responded that 96 percent would be, including electricians, plumbers, steelworkers, painters and drywallers, with word spread through a variety of websites and newspaper advertising. Finally, Fonseca wondered why Reserve chose Marshalltown for its latest development, and he described it as an opportunity where “we liked what we saw.”

“This is an uncertain market. Everybody’s going to Des Moines. They’re going to Cedar Rapids. They’re going to Ames because there’s no core shopping here. Retailers love retailers. People love to have more retail next to more retail, that’s just how that market works,” Kitto said. “So the comment earlier about ‘I think it’ll help downtown retailers,’ I really do. I don’t think it’s gonna harm them because they love to feed off of each other’s shopping traffic.”

An individual shopping on a Saturday might start at Shops at Marshalltown and then head downtown, he said, but if they head straight to Des Moines, they’ll never even have the opportunity. Kitto praised the city team for being “great” to work with, and Spack then returned to the podium and recounted a conversation with an individual who was tired of driving to Ames to do her shopping. Spack also supported the use of local contractors.

Grieve also came forward again and cited a statistic showing 41 percent of local workers being considered Asset Limited, Income Constrained, Employed (ALICE). He also claimed that “people just don’t want to live in Marshalltown,” including the city’s own housing and community development director and assistant housing and community development director as examples before Greer cut him off for being “personal and out of order.”

“I am sorry I don’t have First Amendment rights. I’ll stop,” Grieve said.

Carter remembered being told that the Crosby Park townhouse project would never work and likened that eventual success to the chance to redevelop the mall.

“This is the greatest opportunity we’ve seen in the 30 years that I’ve been here. So please consider that, work out your development agreement, but vote yes and show these developers what we have here,” she said.

After a discussion that went on for over 50 minutes, the council ultimately voted 6-1 to proceed with drafting a development agreement. Mitchell was the lone dissenter, and Thompson voted yes with the caveat that he was only supportive of bringing back an agreement.

In other business, the council:

• Approved the consent agenda as listed.

Recognized Officer Andrew Weispfenning as the Marshalltown Police Department Employee of the Year.