2026-20 Ordinance Authorizing Amendment to TIF Redevelopment Agreement by and between the City of Decatur and Merchant Street South, LLC

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ECONOMIC & COMMUNITY DEVELOPMENT DEPARTMENT No. 2026-35 May 4, 2026 TO: Mayor Julie Moore Wolfe and City Council Members FROM: Melissa Hon, City Manager Lacie Elzy, Economic& Community Development Director Kyle Knott, Economic Development Specialist SUBJECT: Amendment to Redevelopment Agreement with Merchant Street South LLC RECOMMENDATION: Staff recommends approval of the attached ordinance authorizing the Mayor to execute an amendment to the redevelopment agreement with Merchant Street South LLC for 148-160 E. Main Street and 112 N. Merchant Street within the Central TIF Redevelopment Project Area. BACKGROUND: In May 2024, the Decatur City Council approved a redevelopment agreement with Merchant Street South LLC for the rehabilitation of the Flora Gems building and the Giggles Building in downtown Decatur. To date, the developer has invested approximately $898,865.37 into the Flora Gems property, demonstrating a strong commitment to reinvestment in the downtown. The original agreement contemplated renovation of the Flora Gems building for commercial and office use within eighteen (18) months of construction commencement. Since that time, market conditions have shifted, with declining demand for downtown office space and increased demand for residential units. The developer has indicated that the current office-focused plan presents leasing challenges under existing market conditions. In response, the developer is proposing to amend the project to construct ten (10) multifamily residential units in place of commercial office space and to extend the project timeline by an additional twelve (12) months, for a total of thirty (30)months to complete construction. This proposed amendment aligns with the City's 2026-2029 Community Revitalization Plan, specifically efforts to expand housing options, support downtown occupancy, and encourage reinvestment in underutilized properties. The shift to residential use positions the project for long- term success while advancing the City's broader goals of downtown revitalization and economic stability.Approval of this amendment ensures continued forward progress on a key redevelopment site, supports nearly $900,000 in private investment already made, and increases the likelihood of bringing new residents and activity into the downtown. BUDGET IMPACT: There is no additional fiscal impact associated with this amendment. The developer is not requesting any increase in TIF assistance,and all reimbursement terms, including