SUBJECT:
Title
A Resolution of the Board of Commissioners of the Town of Erie Urban Renewal Authority Approving a Reimbursement Agreement with Bourbon on Briggs, LLC
Body
DEPARTMENT: Economic Development/TOEURA
Department
PRESENTER(S): Julian Jacquin, Director of Economic Development & TOEURA
Andy Arnold, Pioneer Development Company
Ronda Grassi, Bourbon on Briggs, LLC
First Name Last Name, Title
TIME ESTIMATE: 20 minutes
only required for non-consent items
FISCAL SUMMARY:
The Reimbursement Agreement authorizes TOEURA to pledge up to $200,000 in gross property tax and sales tax increment generated by the project over the next 10 years (exp. Dec. 31, 2036), to support the $95,000 financial gap demonstrated by Bourbon on Briggs and validated by the Town’s consultants at Pioneer Development Company.
POLICY ISSUES:
To utilize tax increment financing (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 Reimbursement Agreement.
End
SUMMARY AND BACKGROUND OF SUBJECT MATTER:
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, especially the Plan’s #7,9,10,19,20 and 21 Objectives. The restaurant requires improvements to its existing space and is also constrained seasonally due to a lack of space during the winter months. In order to expand their restaurant without jeopardizing ongoing cash flow, the ownership intends to develop a second 1,618 SF building on their adjacent parcel. When complete, the existing building (2,016 SF) can then be upgraded without pausing operations. Once the full project is complete, Lucile’s Creole Café will have effectively expanded its business and become more sustainable by adding indoor seating. The owner is requesting additional funding resources to help construct the new building on site.
Town staff contracted with Pioneer Development Company to review the development plans and project pro forma from Bourbon on Briggs and prepare the attached Gap Funding Analysis. The analysis shows that the redevelopment project requires approximately $95,000 in gap funding assistance from TOEURA to achieve financial feasibility based on market benchmarks and current investment metrics. TOEURA and Bourbon on Briggs have agreed to a TIF revenue sharing agreement to overcome this funding gap, capped at $200,000 gross increment over the next 10 years to achieve the $95,000 gap funding in net present value. 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) and 526 Briggs St. (Birdhouse).
The attached Reimbursement Agreement authorizes TOEURA to pledge 100% of the property tax increment and 50% of the sales tax increment generated by the project, up to a maximum of $200,000 gross increment, for a period of 10 years (exp. Dec. 31, 2036), whichever first occurs.
COUNCIL PRIORITY(S) ADDRESSED:
ü Attractive Community Amenities
ü Prosperous Economy
ü Small Town Feel
ü Effective Governance
ü Fiscally Responsible
ATTACHMENT(S):
1. Staff Presentation
2. Resolution 24-008
3. Reimbursement Agreement
4. Gap Funding Analysis