SUBJECT:
Title
A Resolution of the Town Council of the Town of Erie Approving a First Amendment to the Tax Increment Revenue Agreement with the Town of Erie Urban Renewal Authority for the Erie Town Center Urban Renewal Plan
Department
DEPARTMENT: Economic Development
Presenter
PRESENTER(S): Julian Jacquin, Director of Economic Development & TOEURA
Malcolm Fleming, Town Manager/TOEURA Executive Director
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Time
TIME ESTIMATE: 0 minutes
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Fiscal
FISCAL SUMMARY:
Projections provided by the Town’s development partner, Evergreen Devco, show that sharing 3.25% of the Town’s 3.50% sales tax as tax increment will allow the Erie Town Center Urban Renewal Plan Area (URA) to capture approximately $22M in new sales tax increment by retail sales generated within this new development program. The existing TIF Agreement approved by the Erie Town Council on Feb. 25, 2025, and executed by TOEURA on Jun. 10, 2025, only authorizes the URA to capture 1.75% (50%) of the Town’s sales tax rate, reducing the amount of sales tax increment captured by the URA to approx. $11.8M. Approving this First Amendment to the Town of Erie’s TIF Agreement will allow the URA to capture an additional $10.2M in sales tax increment, to further reduce the demonstrated gap and help achieve financial feasibility for this key development in Erie.
Policy
POLICY ISSUES:
The policy issue is whether to support an amended TIF revenue sharing agreement from the Town of Erie, increasing the municipal sales tax pledge for tax increment to be generated by new development in the Erie Town Center Urban Renewal Plan Area (URA) from 1.75% (50%) to 3.25% (92.9%) of the Town’s 3.50% sales tax rate. This, and other actions are necessary to reduce the financial gap demonstrated by the Town’s development partner, Evergreen Devco, and facilitate the development the Town wants to see happen. It also still provides sufficient revenue with the remaining 0.25% municipal sales tax to cover the cost of basic services (Erie Police, Parks, Streets, etc.) within this URA and for visitors to the area. Increasing the sales tax pledge to 3.25% allows TOEURA to maximize the use of the new URA Plan Area to address the significant blighting factors on the site, which include historical undermining, an irrigation ditch, and the need for significant streets and other public improvements.
Recommendation
STAFF RECOMMENDATION:
Approve the First Amendment to the TIF Agreement with the Town of Erie Urban Renewal Authority for the Erie Town Center Urban Renewal Plan Area
Body
SUMMARY/KEY POINTS
• Amends the Town’s approved TIF Agreement for the new Erie Town Center Urban Renewal Plan Area to increase the Town’s sales tax pledge from 1.75% (50%) to 3.25% (92.9%) of the Town’s 3.50% sales tax rate.
• Provides an additional $10.2M in sales tax increment to reduce the demonstrated funding gap and help achieve financial feasibility.
• The completed Erie Town Center Phase 1 Feasibility Study demonstrates that the remaining 0.25% municipal sales tax to be retained by the Town will still generate sufficient revenue to provide basic services for Town residents (Erie Police, Parks, Streets, etc.)
• This funding will help bring a smaller format grocery store and more commercial opportunities to central Erie and all the benefits that entails.
BACKGROUND OF SUBJECT MATTER:
The Erie Town Council approved a conditional Tax Increment Revenue Agreement (“TIF Agreement”) for the new Erie Town Center Urban Renewal Plan Area on Feb. 25, 2025, pledging the Town’s general operations mill levy as available property tax increment, and 1.75% (50%) of the Town’s 3.50% sales tax rate as sales tax increment, to remediate blight and support the development of this key well-located site in Erie Town Center. The Town of Erie Urban Renewal Authority (TOEURA) then approved and fully executed the Town’s TIF Agreement on Jun. 10, 2025.
The Town Council and TOEURA now wish to amend the Town’s TIF Agreement to increase the sales tax pledge from 1.75% (50%) to 3.25% (92.9%) of the Town’s 3.50% sales tax rate, to further remediate blight, increase the amount of sales tax to be captured as tax increment by TOEURA, reduce the financial gap demonstrated by Evergreen Devco and validated by the Town’s independent consultant, and help achieve financial feasibility for this development.
The Town worked with Evergreen Devco and its third-party consultants at Pioneer Development Company to complete an Erie Town Center Phase 1 Feasibility Study (attachment #4), which includes a cost-of-service study, demonstrating that the remaining 0.25% municipal sales tax to be retained by the Town will still provide sufficient revenue provide basic services for Town residents (Town staff, Erie Police, etc.).
Approving the First Amendment to the Town’s TIF Agreement will allow TOEURA to maximize the use of the tax increment captured to address the financial gap and further achieve financial feasibility, and still protect the Town’s best interests.
priorities
TOWN COUNCIL PRIORITY(S) ADDRESSED:
☒ Attractive Community Amenities
☐ Engaged and Diverse Community
☒ Prosperous Economy
☐ Well-Maintained Transportation Infrastructure
☒ Small Town Feel
☐ Safe and Healthy Community
☒ Effective Governance
☐ Environmentally Sustainable
☒ Fiscally Responsible
attachments
ATTACHMENT(S):
1. Resolution 25-128
2. First Amendment to Town of Erie TIF Agreement
3. Existing TIF Agreement - Town of Erie
4. Erie Town Center Phase 1 Feasibility Study