R2006-77 AUTHORIZING REDEVLOPMENT AGREEMENT Olde Towne Redevelopment

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ECONOMIC AND URBAN DEVELOPMENT MEMORANDUM No. 06-111 May 26, 2006 TO: Mayor Paul Osborne and City Council Members FROM: Steve Garm ity Manager Dane C. Br g,Assistant City Manager� SUBJECT: Redevelopment Agreement, 253 North Main Street SUMMARY RECOMMENDATION: Staff recommends approval of the attached redevelopment agreement to rehabilitate the building located at 253 North Main Street. BACKGROUND: The subject property is occupied by Felice's Restaurant. Olde Towne Development, LLC has purchased the building and intends to convert the upper stories into two market-rate condominiums or apartments. The first-floor will be retained as a restaurant. The developer estimates the project cost will exceed$350,000. The proposed redevelopment agreement would provide TIF incentives to the developer. , Specifically, the redevelopment agreement would reimburse the developer 50 percent of I incremental property tax generated annually to a ma.ximum of $65,000. The ', reimbursement period is limited to 12 years and the developer reimbursement can ondy '�, be received if the tax is generated as a result of increased Equalized Assessed Valuation related to completing the projec� Only if the TIF Fund receives incremental revenue from the project would the developer share in the increased tax generation. Over the life of the Olde Towne TIF District, tlus project is estimated to generate $175,000 to the Olde Towne TIF Fund. Net incremental TIF revenue (after subtracting incentives paid out)will be $110,000. Staff is of the opinion that this agreement achieves the following objectives of the Olde ' Towne Redevelopment Plan: 1. Preserves architecturally significant structures within the Downtown Decatur National Register Historic District; 2. Provides for the addition of residential dwelling units in the downtown area, thereby promoting the concept of a 24-hour downtown environment;