Sunday, January 31, 2016

Council to Consider S. Second Street Financial Agreements

Among proposed new ordinances Monday, two deal with financial arrangements for the South Second Street redevelopment project on a 5-acre city-owned site in the West End..

One is for the residential portion, consisting of 90  1-, 2- and 3-bedroom units of affordable housing in two five-story buildings, with 10 units set aside for special needs tenants. The other is for a one-story, 44,000-square-foot warehouse with a specialized staging area on approximately 3.75 acres.

The properties would be exempt from taxes under the agreements, but would be subject to "annual service charges" for up to 35 years for the residential side and 25 years for the commercial section. Each of the 20-page agreements refers to the Long Term Tax Exemption Law but neither uses the sometimes controversial phrase "payment in lieu of taxes," or PILOT. At the end of the terms, the properties would be subject to regular taxes

The two agreements mention several benefits, including giving city residents first dibs on employment and aiming for 20 percent minority and women sub-contracting. Five percent of the revenues from the annual service charges would go to the county and a 2 percent administrative fee would go to the city.

The residential project's benefits include provision of affordable housing, as well as approximately 100 jobs created during construction and three permanent jobs.

Benefits of the warehouse project include retention of a major employer, ABC Supply Company, Inc., described as a major Urban Enterprise Zone merchant that provides jobs to city residents. Construction of the project will develop a "blighted vacant property" that has been vacant for more than 15 years. About 75 jobs will be created during construction and 15 permanent jobs for which city residents.will be preferred.

But the projects and all the benefits hinge on council approvals.

"Without the tax exemption granted herein, the Project would not otherwise be undertaken," the agreement says.

If the council moves the ordinances to the Feb. 8 agenda, they will be up for passage on first reading then. Second reading and final passage could come at the March 14 regular meeting.


1 comment:

  1. Please explain and quantify "annual service charges". Recently the Council initially rejected the South Avenue apartment project because in the Council's view the substantial amount to be paid by the Developer to the City under the PILOT provisions were insufficient. Don't the 100 affordable housing tenant require municipal services such as fire, police, street maintenance, plowing, sewers, etc.? Is it not probable that there will be some school age children in residence? After the spate of construction employment unless the service charges are sufficient, it is possible that this deal might be subsidized by the rest of the population for 35 years. Let's see the numbers and not be guiled into deal for the excitement of making a deal. Bill Kruse