SUBJECT:
Title
A Resolution of the Town Council of the Town of Erie Approving the Restated Disposition and Development Agreement with the Town of Erie Urban Renewal Authority and Evergreen-County Line & Erie Parkway, L.L.C. for the Erie Town Center
Department
DEPARTMENT: Economic Development
Finance
Planning & Development
Presenter
PRESENTER(S): Julian Jacquin, Director of Economic Development & TOEURA
Lockie Woods, URA and Development Accounting Analyst
end
Sarah Nurmela, Planning & Development Director
Time
TIME ESTIMATE: 30 minutes
end
For time estimate: please put 0 for Consent items.
Fiscal
FISCAL SUMMARY:
Approving Resolution 25-181 and the Restated DDA commits the Town to three funding obligations and the Town of Erie Urban Renewal Authority (TOEURA) to one funding obligation.
The Town will fund $5.1M in mine mitigation using Certificates of Participation (COPs). The Town will provide a credit enhancement to support up to $16.1M in eligible public improvements through a Town moral obligation or Town issued COPs. The Town will contribute up to an additional $2.5M for eligible transportation improvements from the Transportation Impact Fund if URA revenues do not reach the $16.1M target. Town exposure ranges from $5.1M to $7.6M.
TOEURA will pledge 100% of the property tax increment and 3.25% of the Town’s 3.5% sales tax rate captured by the new Town Center URA, and all Public Improvement Fee (PIF) revenue toward repayment of the project financing.
Total public reimbursements by the Town and TOEURA cannot exceed $21.3M.
With a 5% interest rate, the 50-year net present value of the revenues generated by this project and retained by the Town is approximately $8M. This exceeds the Town’s maximum up front financial contribution to the project.
Policy
POLICY ISSUES:
The policy issue is whether to approve the restated DDA for Erie Town Center.
Recommendation
STAFF RECOMMENDATION:
Approve Resolution 25-181.
Body
SUMMARY/KEY POINTS
• The Restated DDA replaces the 2024 DDA and its amendments.
• The agreement reflects the validated financial gap and sets a firm cap on public participation.
• The financing structure matches Council direction from recent executive sessions.
• Public funding covers mine mitigation and public or horizontal improvements but does not cover signage, branding or private vertical buildings.
• But for this financing package, developing the central 20-acre portion of the Town Center plan area will be infeasible and the site will sit vacant due to extensive blighting factors including underground mines, an irrigation ditch through the site, and inadequate street layout and utilities.
BACKGROUND OF SUBJECT MATTER:
The Town Council approved a Disposition and Development Agreement (DDA) with Evergreen Devco in Oct. 2024 to convey the Town-owned 20-acre site at Erie Parkway and E. County Line Rd., to deliver a grocery anchored commercial district as the retail catalyst for Erie Town Center. The site lies within high to severe subsidence hazard areas and requires mine mitigation estimated at $5.1M.
Staff and Evergreen worked over the last three years to refine the concept plan, complete technical studies, secure the anchor grocer, form the new Town Center URA and evaluate the financial need. The Feasibility Study completed by Pioneer Development Company in April validated a $20.5M financial gap. Hilltop Securities bond models project that these TIF and PIF revenues from Phase 1 can support up to $15.7M through URA bonds or COP’s.
Evergreen’s updated pro forma in September identified a $21.3M financial gap to be met with public financing, driven by increased costs. The restated DDA proposes three sources of public funds to meet this $21.3M financial gap:
• The Town will fund the $5.1M mine mitigation at Town Center utilizing COPs.
• TOEURA will fund new URA Bonds or COP’s using TIF revenues (property and sales tax) and PIF revenues generated by the development, which could yield a project fund of up to $15.7M to support the validated financial gap, which “but for” the use of TIF, the development would not otherwise occur.
• The Town will authorize up to an additional $2.5M of public funding assistance for new public road improvements from the Transportation Impact Fund, only to be used if the URA Bonds or COP’s funded by TOEURA yield a project fund of less than $15.7M.
Public improvements include wet and dry utilities, stormwater, the underground irrigation ditch, off site road work, internal streets, fee rebates, and required horizontal site work. Private vertical buildings, tenant improvements, and all signage and branding remain Evergreen costs.
The restated DDA includes one plat and one development agreement. Evergreen must secure the anchor grocer and all approvals by Dec. 31, 2026. Reimbursements require third-party engineer review, to be paid within 30 days. The DDA also allows Evergreen to provide a performance bond as surety for the public improvements, rather than a letter of credit as typically required by the Town. This is justified by the Town or TOEURA having control over the funds used to pay for the public improvements, which reduces the risk of the improvements not being completed or being completed inadequately.
priorities
attachments
ATTACHMENT(S):
1. Resolution 25-181
2. Restated Disposition and Development Agreement
3. Erie Town Center Phase 1 Feasibility Study
4. Hilltop Securities URA Financing Analysis
5. Erie Town Center Phase 1 Preliminary Site Plan