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TO: Mayor Richard C. Irvin
FROM: Trevor Dick, Director of Development Strategy and Facilitation
DATE: September 18, 2020
SUBJECT:
A Resolution authorizing the amendment of a sales tax reimbursement agreement with Pacific Square DE, LLC.
PURPOSE:
Staff is requesting authorization to amend the existing Sales Tax Sharing Agreement with Pacific Square DE, LLC. The amendment adds additional time for sharing sales tax revenues from 10 years to 17 years, and raises the revenue cap from $4 Million to $6 Million. The impetus for this change is to recalibrate the $15 million incentive package Council approved in early 2018 because of a subsequent agreement with School District 204 that limits the use of TIF in this location.
. Sales Tax sharing was part of a potential three tiered incentive package (approved by City Council on February 27, 2018, R18-048 to include Sales Tax Sharing, a Business District and a TIF)) for the new owners of Pacific Square and their financing partners as an inducement to move forward with their purchase, renovation, repositioning and expansion of the former Yorkshire Plaza shopping center located near the northwest corner of New York Street and State Route 59. Specifics of the sales tax sharing agreement now being amended was initially approved by City Council on March 12, 2019 (R19-0145).
The City will continue to receive 100% of sales taxes that were received in 2018; it is only sales taxes above this threshold that will be shared with Pacific Square ownership who have indicated that these thresholds have not yet been attained.
Because of the long-term nature of this incentive, the unforeseen financial and time limitations that resulted from the aforementioned SD 204 agreement, the highly competitive retail environment that is limiting the amount Business District tax, the impacts of Covid, and the time value of money, staff is making this recommendation.
BACKGROUND:
With the retail market nationally in rapid decline and vacanci...
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