SUBJECT:
Title
A Resolution of the Board of Commissioners of the Town of Erie Urban Renewal Authority Approving a First Amendment to the Reimbursement Agreement with Bourbon on Briggs, LLC
Body
DEPARTMENT: Economic Development/TOEURA
Department
PRESENTER(S): Julian Jacquin, Director of Economic Development & TOEURA
Ronda Grassi, Bourbon on Briggs, LLC
First Name Last Name, Title
TIME ESTIMATE: N/A
only required for non-consent items
FISCAL SUMMARY:
The First Amendment to the Reimbursement Agreement increases the amount of tax increment financing (TIF) assistance to support the expansion of Lucile’s Creole Café in Downtown Erie, from $200,000 to $240,000, an increase of $40,000 in gross property tax and sales tax increment generated by the project over the next 10 years (exp. Dec. 31, 2036), to support the financial gap demonstrated by Bourbon on Briggs and validated by the Town’s consultants at Pioneer Development Company.
POLICY ISSUES:
To utilize TIF assistance to support the expansion of Lucile’s Creole Café in Downtown Erie, and ongoing (re)development in the Historic Old Town URA, increasing property valuation and generating new property/sales tax increment to TOEURA.
STAFF RECOMMENDATION:
Recommendation
Approve the First Amendment to the Reimbursement Agreement.
End
SUMMARY AND BACKGROUND OF SUBJECT MATTER:
On Dec. 10, the Town of Erie Urban Renewal Authority (TOEURA) and Bourbon on Briggs, LLC (the “Developer”) entered into a Reimbursement Agreement, by which TOEURA agreed to reimburse Developer in an amount not to exceed $200,000 generated from gross property tax and sales tax increment generated by the expansion of Lucile’s Creole Café in Downtown Erie, over the next 10 years (exp. Dec. 31, 2036), to support the financial gap demonstrated by the Developer and validated by the Town’s consultants at Pioneer Development Company. More information regarding that item is available from the Dec. 10, 2024, TOEURA Meeting (agenda item #24-546 <https://erie.legistar.com/LegislationDetail.aspx?ID=7046455&GUID=5580F374-AD74-4DDC-A0A5-536ACF262CAB&Options=ID|Text|&Search=24-546>).
Thereafter, on Dec. 10, 2024, the Town Council approved its 2025 fee schedule, which increased costs for the Town’s sewer tap fees, water tap fees, and raw water distribution fees. In 2024, the estimated amount to be charged at the time of building permit for these fees was $69,992. The updated fees for 2025 increased to $110,269, a net change of $40,277.
The Town contracted with Pioneer Development Company in 2024 to review the development plans and project pro forma and concluded that the project required $200,000 in TIF assistance to cover, in NPV the stream of TIF reimbursement, the $95,000 financial gap that Burbon on Briggs demonstrated their project faces. With the increased fees for 2025, the Developer requested that TOEURA amend the Reimbursement Agreement to increase the TIF assistance by $40,000 to $240,000. TOEURA wishes to provide the additional $40,000 when the building permit is issued, so the Developer can use those funds to offset their 2025 increase in fees. The Developer will provide the full amount owed to the Town at time of building permit, and if TOEURA approves this First Amendment to the Reimbursement, then TOEURA will return to the Developer this first $40,000 in TIF assistance thereafter, with the remaining $200,000 in gross property tax and sales tax increment to be reimbursed over the next 10 years, as outlined in the existing Reimbursement Agreement.
The project will expand and improve the existing Lucile’s Creole Cafe, a restaurant located at 554 Briggs Street. The property owner, who also operates the restaurant, intends to develop the adjacent parcel (544 Briggs Street) as part of the restaurant, effectively increasing their usable space by 1618 Square feet. The redevelopment is in alignment with the Historic Old Town Urban Renewal Plan. This agreement reflects support similar to other TIF agreements already in place within the Historic Old Town URA for 105 Wells St. (Park West), 615 Briggs St. (Coal Park), 700 Briggs St. (Legacy), 526 Briggs St. (Birdhouse) and 656 Kattell St.
COUNCIL PRIORITY(S) ADDRESSED:
ü Attractive Community Amenities
ü Prosperous Economy
ü Small Town Feel
ü Effective Governance
ü Fiscally Responsible
ATTACHMENT(S):
1. Resolution 24-029
2. First Amendment to Reimbursement Agreement
3. Existing Reimbursement Agreement