COLUMBIA — A $17 million downtown apartment and retail project that had been approved for special tax incentives has been dropped.
The developers said in a news release that a decline in demand for commercial real estate makes the project infeasible, even with the use of tax increment financing, a tax incentive that allows increases in tax revenue to be funneled back into the project.
Developers Jonathan and Nathan Odle planned to demolish three houses and a city parking lot at the corner of Tenth and Locust streets and build an eight-story high-rise with office space, apartments and a street-level grocery store.
Tony St. Romaine, Assistant City Manager, said the developers planned to drop the grocery store component of the project, a requirement for tax increment financing.
"That was a major selling point," St. Romaine said.
The developers declined to comment on their plans for the space.
St. Romaine said the city wouldn't consider tax increment financing for a residential-only development. He thought an apartment building would provide housing the downtown area would support.
"There's very little risk in that," he said. "I think they'll find tenants for that pretty quick."
The Odles, operating as Trittenbach Development, had made an agreement to buy a surface parking lot owned by the city to accommodate the building's footprint. They will no longer have access to the land, St. Romaine said.
The Odles had also made arrangements with the city to provide parking for residents of the proposed apartment building in an adjacent city parking garage. St. Romaine said the city will not subsidize parking for new proposed developments.
The building would have taken up about a quarter of a city block, but it would be one of downtown's tallest — just one floor short of The Tiger Hotel. A renovation of The Tiger received final approval from the City Council in early October. Construction is scheduled to start next year.
To use the tax incentive, the project faced approval from the city Tax Increment Financing Commission and the City Council. The developers had to pay a $10,000 application fee.
The proposal faced some opposition from Columbia Public Schools, which would collect more tax if the property value increased without tax increment financing, and members of the public who questioned the plan's viability.
The City Council unanimously approved tax increment financing for the project, but the developers never came forward with a redevelopment agreement for the council to approve.
Third Ward Councilman Karl Skala said the decision to drop the project is disappointing, but understandable given the economic climate.
But Skala said he hopes to see another downtown residential project, either as a scaled back version of the Odles' project or elsewhere.
"That's an area that needs some development," Skala said. "In some fashion, I'd like to see more residential development downtown that could support the commercial development downtown."
"Perhaps we'll get our grocery store, too," he added.
Trittenbach Development is also responsible for Brookside Townhomes and a number of Columbia Medical Plaza projects on Keene Street.