R2009-228 RECEIVING AND FILING PROPOSED REDEVELOPMENT AGREEMENT

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ECONOMIC AND URBAN DEVELOPMENT MEMORANDUM Memo No. 09-93 November 10, 2009 TO: Honorable Mayor Michael T. McElroy and City Council FROM: Ryan P. McCrady, City Manager r Greg C. Crowe,Assistant City Manag� SUBJECT: Receive and File Redevelopment Agreement—Pines Shopping Center SUMMARY RECOMMENDATION: Staff recommends that the attached redevelopment agreement between the City of Decatur and Neimann Holdings, LLC, to establish a Tax Increment Finance (TIF) District to redevelop the Pines Shopping Center be received and placed on file. The agreement is scheduled for final action at the November 30,2009 City Council meeting. BACKGROiJND: Neimann Holdings, LLC, owner of Save-A-Lot, has a real estate contract to purchase the Pines Shopping Center with the intent to redevelop the center and build a new Save-A-Lot. The current center and grocery store no longer comply with current building codes and many of the store fronts are unoccupied. In order to eliminate the blighted conditions, the developer requests the City's assistance to tear down the existing center and rebuild a new grocery store and shopping center. The City has two obligations under the proposed agreement: 1) to set up a Tax Increment Financing District whereby incremental property tax revenue is deposited into a special fund to cover eligible redevelopment expenses, and 2) to share up to 75 percent of increased annual sales tax revenue for the first 13 years after construction is started and up to 25% for the next 12 years with the developer until such time that the eligible redevelopment project costs have been recovered by the developer. The sales tax reimbursement shall not be greater than$1,000,000. The developer intends to invest at least$8.4 million in the property to tear down and rebuild the shopping center. POTENTIAL OBJECTION: None. INPUT FROM OTHER SOURCES: A meeting was held recently to notify the major taxing districts of the creation of a TIF district to affect redevelopment of the site. STAFF REFERENCE: Any additional questions may be forwarded to Greg Crowe at 424-2727 or at gcrowe@decaturil.gov. BUDGET/TIME IMPLICATIONS: All reimbursements will be made based on incremental property and sales taxes generated to the City of Decatur.