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The developer of a big box shopping center proposed for north Redding could wind up fronting at least $50 million to make a nearby freeway interchange large enough to get customers in and out.

And a city report warns that this developer should not count on sales tax revenue wrung from shopping center cash registers to help pay that bill.

So concludes a report up for City Council tonight outlining how Redding can finance the freeway, water, sewer, storm drain and other infrastructure needed to build a small city around the Oasis Road/Interstate 5 interchange over the coming years and even decades.

Levenson Development Co. is the only major property owner to win approval to build a shopping center around the Oasis interchange, slated to one day boast as many square feet of shopping, apartments and office space as today’s Dana/Hilltop Drive area. Levenson’s Oasis Towne Center would offer 310,000 square feet of retail, fast food and office.

Cinemark has announced plans to build a 16-screen theater at Oasis Towne Center. Although Costco has publicly distanced itself from the shopping center, it’s still interested in building a 150,000-square foot

store there, Development Serviced Director Jim Hamilton said. And Fred Meyer, the department store chain, is scouting places to build in Redding.

But Levenson can’t build much of Oasis Towne Center before the nearby interchange, already straining with commute traffic, will need major widening. That means moving nearby Twin View and Cascade Boulevards to make room and bulking up Oasis Road to eight lanes in places.

Levenson last year estimated that work would cost roughly $30 million, based in part on a marketing study showing demand for 3 million square feet of retail at Oasis by 2025. The firm proposed fronting the money and seeking reimbursement from the city through redevelopment and sales tax revenue associated with the shopping center.

Levenson also said it would form a special tax district on its property. But the firm proposed using the levy only if sales tax revenue from the shopping center could not pay back the debt.

Redding has never used sales tax to build streets or other big capital projects, a council report said. That money goes into the general fund, where it pays salaries and benefits for police, fire, planners, engineers, secretaries and other workers. General fund money also covers street repairs.

A council majority in October 2006 said it was willing to negotiate with Levenson. But sales tax was off the table.

MuniFinancial, an Oakland-based consultant, drew up the new $50 million figure for freeway interchange costs based on street standards and traffic models described in the Oasis Road Specific Plan. The consultant also assumed that only 1.7 million square feet of retail would be built at Oasis by 2025, while nearly all of the 2,500 apartments envisioned in the plan would appear.

Under MuniFinancial’s proposal, Levenson would sell bonds based on the special tax district to raise $17.8 million for the freeway interchange. The Redding Redevelopment Agency would raise another $12.5 million for the interchange through a bond on expected property tax revenue from the area.

That would leave $20.5 million for Levenson to finance through a bank loan or some other means, like getting other property owners to participate in the special tax.

source : http://www.redding.com/news/2007/dec/18/report-sets-oasis/

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