R2004-53 AUTHORIZING REDEVELOPMENT AGREEMENT Olde Towne Lucas

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ECONOMIC AND URBAN DEVELOPMENT MEMORANDUM No. 04-49 March 26, 2004 TO: Mayor Paul Osborne and City Council Members FROM: Steve G ity Manager Dane C. B , Director of Economic and Urban Development� / SUBJECT: Redevelo ment Agreement, 219-245 North Main Street, Good's Buildings SUMMARY RECOMMENDATION: Staff recommends approval of the attached redevelopment agreement to rehabilitate the former Good's Furniture buildings located at 219-245 North Main Street. BACKGROUND: The subject property was vacated by the Good's Furniture Company in July, 2003. Lucas Properties, LLC has since purchased the buildings and intends to convert the upper stories into market-rate apartment units. The first-floor will be rehabilitated for retail / commercial uses. The developer estimates the project will cost $2,000,000 and would bring the structure to fully operational status in Summer, 2005. ' The proposed redevelopment agreement would provide public and private TIF incentive to the developer. Specifically, the redevelopment agreement would reimburse the developer 75 percent of incremental property tax generated annually for years 1-5 and 50 percent of the incremental tax growth for years 6-15 of the agreement up to a maximum of $300,000. The reimbursement period is limited to 15 years and the developer reimbursement can only be received if the tax is generated as a result of increased Equalized Assessed Valuation related to completing the project. Only if the TIF Fund receives incremental revenue would the developer share in the increased tax generation. In addition, the City is committed to rehabilitating the streetscape of the 200 Block of North Main Street, including new sidewalks, street lighting, landscaping and irrigation, up to a maximum of$100,000. The improvement to the streetscape is consistent with the recommendation of the Olde Towne Redevelopment Plan to improve the pedestrian environment within the public space of downtown. Over the life of the Olde Towne TIF District, this project is estimated to generate $800,000 to the Olde Towne TIF Fund, or approximately 4.5 percent of the Fund's projected increment.