ACTION REQUESTED:
Title
Communication from the City Manager and Assistant City Manager with a Request to ADOPT an ORDINANCE Approving the KM REAL PROPERTIES, LLC, REDEVELOPMENT AGREEMENT for the UNIVERSITY/WAR TIF DISTRICT REDEVELOPMENT PROJECT AREA. (Council District 2)
Body
BACKGROUND:
The University/War Memorial Tax Increment Financing District was established on February 8, 2022. The project area met at least five eligibility criteria to be classified as a ‘blighted area, or three eligibility criteria to be classified as a ‘conservation area’ if a majority of buildings are 35 years in age or older. Obsolete Platting was identified as contributing to the project areas blight. This was evidenced by; multiple parcels in the center of the Project Area had no street access; lack of access to University Street; access to Florence Avenue restricted to right-in/right-out and conflicts with the residential neighborhood to the south; cross-access between parcels are severely limited, with access from adjacent properties blocked of and restricted.
The City Council adopted War & University TIF Inducement Resolution on April 27, 2021, prior to the creation of the TIF District. The Inducement Resolution allowed private developers to be reimbursed for TIF eligible costs subject to the City Council agreeing to create a TIF and subject to a redevelopment agreement between the City and the developer.
The developer, The Kim Group, agreed to make road access to the Credit Union parcel as a prerequisite for the property sale. Such improvements are also necessary for the development of parcels 1429401030 and 1429401031. The associated cost related to the infrastructure and road access resulted in additional cost that would negatively impact the transaction but for support offered in the inducement agreement by the City of Peoria to reimburse costs associated with the required improvements.
The Kim Group is requesting reimbursement for the costs and has agreed the Project Site shall not be used, sold or leased for the purpose of operating the following businesses without first obtaining the prior written approval of the City of Peoria: Pawn shops, payday loan establishments, tattoo parlors, tobacco shops, vape shops, cannabis dispensaries, package liquor or liquor for consumption on premises other than as incidental to a restaurant.
FINANCIAL IMPACT: The total reimbursement request for the infrastructure and road access is $992,358. The City will reimburse the Redeveloper 75% of the project tax increment attributable to the Project Site until the eligible redevelopment project costs are reimbursed in full.
NEIGHBORHOOD CONCERNS: N/A
IMPACT IF APPROVED: Continued development of the TIF project area.
IMPACT IF DENIED: Will stall future development of the TIF project area.
ALTERNATIVES: N/A
EEO CERTIFICATION NUMBER:
WHICH OF THE GOALS IDENTIFIED IN THE COUNCIL’S 2017 - 2032 STRATEGIC PLAN DOES THIS RECOMMENDATION ADVANCE?
1. Financially Sound City
2. Grow Peoria
3. Choose an item.
WHICH CRITICAL SUCCESS FACTOR(S) FROM THE COMPREHENSIVE PLAN DOES THIS RECOMMENDATION IMPLEMENT?
1. Reinvest in neighborhoods.
2. Keep taxes and fees competitive.
3. Choose an item.
DEPARTMENT: City Manager's Office