In Slidell officials’ ongoing effort to revive North Shore Square mall, the City Council on Tuesday approved an additional half-cent sales tax at the struggling retail center, hoping the extra money will spur improvements that can help stave off competition from newer shopping venues.
Money from the new 30-year tax can be used for infrastructure improvements to help make the mall more attractive to shoppers and tenants, according to Tim Mathison, Mayor Freddy Drennan’s chief administrative officer.
The measure passed unanimously, and the tax will go into effect April 1.
The council also approved, though not unanimously, an agreement giving the mall access to a half-cent of existing sales tax revenue to help lure new anchor stores to replace any that leave. So far, Sears is the only one of five anchor tenants in the mall to have closed.
Councilman Sam Caruso questioned why the city was willing to surrender tax revenue to the mall.
“This may be a bridge too far,” he said. “It’s almost like we are becoming business partners with the developer.”
John Talano, a vice president with Morguard Management Co., said the incentive is necessary to make North Shore Square competitive with the much newer Fremaux Town Center.
Under the terms of the agreement, the council will have to approve a plan to redevelop an anchor store site, and when the new store opens, a reimbursement will go to the mall’s owners.
“We have not been successful marketing the site while competing with the Fremaux site,” Talano said. “This will level the playing field and ensure the mall will be a viable entity for many years.” Further, he said, the city could realize more revenue than it would otherwise from occupied anchor stores.
The ordinance governing the agreement passed 6-3, with councilmen Sam Abney, Kim Harbison and Bill Borchert opposed.
The city has been working for months to help the struggling mall survive. In October, the council created an economic development district that encompasses the entire mall except for the two Dillard’s stores.
The remainder of the mall has been owned since 2006 by Morguard Management Co., a Canadian company that has offices in New York, Alabama, Florida and Kenner. Sizeler North Shore General Partnership is a Morguard company.
No election is required for enactment of the new half-cent sales tax because there are no voters living within the district where it will be levied. The increase will bump the sales tax at the mall from 8.75 percent to 9.25 percent.
The council also passed an ordinance authorizing Drennan to enter into an agreement with Morguard on how the tax proceeds can be used.
North Shore Square mall was a premier shopping destination when it opened three decades ago, but in recent years it has been in decline. That decline was accelerated with the opening earlier this year of Fremaux Town Center, an 80-acre shopping center on Interstate 10. The city also approved a tax-increment financing district for Fremaux, which has plans to add a Dillard’s store in its second phase.
North Shore Square remains “very important” to Slidell, Mathison said, adding that city officials had met with mall representatives on numerous occasions “trying to get a plan together to help it be an ongoing entity.”
In October, Talano said Morguard planned $25 million to $35 million in improvements to the mall.
Follow Faimon A. Roberts III on Twitter, @faimon.