ACTION REQUESTED:
Title
Communication from the City Manager with a Request for the Following:
A. ADOPT an ORDINANCE Amending the City of Peoria BUDGET for Fiscal Year 2014 Relating to the Use of WAREHOUSE DISTRICT TIF Fund Balance for the REDEVELOPMENT AGREEMENT with LAVILLE DE MAILLET, LLC for a Project at 826 SW ADAMS, in the Amount of $40,000.00 (Requires 2/3 Affirmative Votes of Those Voting);
B. AMEND the REDEVELOPMENT AGREEMENT Between the City of Peoria and LAVILLE DE MAILLET, LLC for the Redevelopment of a Property Located Within the Warehouse District TIF at 826 SW ADAMS. (District 1)
Body
BACKGROUND: On March 12, 2013, the City Council approved a redevelopment agreement with LaVille de Maille, LLC and its owner, Dennis Slape. The agreement outlined a project that included the acquisition and renovation of 826 SW Adams Street. This property was formerly the YWCA homeless drop-in center. The first floor of the two-story building is now occupied by Sugar, a pizza restaurant.
Mr. Slape has the opportunity to secure a tenant for the upstairs space. StartUp Peoria, a local nonprofit organization that inspires, collaborates with and mentors small businesses, would like to open "The Nest" in that location. The Nest would be co-working and education space for entrepreneurs. As an office use above a restaurant, the building code requires the restaurant space to be fire sprinkled. Based on a quote from a local firm, the cost of installation is likely to approach $40,000.
The original Redevelopment Agreement outlined an incentive whereby Mr. Slape would be rebated 50% of any incremental property taxes generated by the project until 2030 (the end of the TIF). Given the cost of this installation and the desire to see StartUp Peoria occupy the second floor, the proposed amendment would reimburse Mr. Slape for the cost of installation upon invoicing. The City would recuperate this upfront outlay by withholding the developer share of future tax rebates until the cost is covered. Mr. Slape will also work with City building inspectors to make sure any other building code issues that would prevent the safe occupancy of the second floor are addressed.
FINANCIAL IMPACT: The City would reimburse the developer up to $40,000 from the Warehouse District TIF and repay itself from the developer's half of future property tax increment. In 2014, the City estimates that the total property tax increment generated by this project, based on a 2013 Equalized Assessed Value of $21,560, will be about $2,000. Of this amount, the $1,000 (50%) that would have been rebated to the developer would instead be kept by the City to recapture the outlay for the sprinkler installation. The 2013 EAV is based only on the purchase of the property. The 2014 EAV will reflect the full value of all the improvements and is anticipated to be around $10,000 per year. At that level, the City would recapture its costs at $5,000 per year and be made whole within the first 8 years.
NEIGHBORHOOD CONCERNS: Renovation of Warehouse District properties is a widely shared goal in Peoria. This amendment will allow another space to be renovated for a new tenant that will increase the vitality of the area.
IMPACT IF APPROVED: The amended Redevelopment Agreement will be signed, the work will be completed, and the second-floor space will be allowed to be occupied.
IMPACT IF DENIED: The redeveloper may not be able to afford the sprinkler system which would make the second floor unusable.
ALTERNATIVES: None.
EEO CERTIFICATION NUMBER: Not applicable.
WHICH OF THE GOALS IDENTIFIED IN THE COUNCIL'S 2014 - 2029 STRATEGIC PLAN DOES THIS RECOMMENDATION ADVANCE?
1. Vibrant Downtown: Riverfront/ Central Business District/ Warehouse District
2. Grow Peoria: Businesses, Jobs, and Population
WHICH CRITICAL SUCCESS FACTOR(S) FROM THE COMPREHENSIVE PLAN DOES THIS RECOMMENDATION IMPLEMENT?
1. Grow employers and jobs.
2. Reinvest in neighborhoods.
DEPARTMENT: City Manager's Office