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TO: Mayor Richard C. Irvin
FROM: David Dibo, Executive Director
DATE: July 3, 2019
SUBJECT:
A Resolution Authorizing the extension of the Sales Tax Revenue Sharing Agreement with Pacifica Square LLC. and the City of Aurora to facilitate the major anchor tenant, Best Buy, to renew their lease and remain in the 57,960 square foot store they currently occupy for an additional term of ten years
PURPOSE:
The action requested will assure that the tenant, with the highest sales volume in the shopping center will remain in place. Sales taxes generated by the Best Buy, even after a portion is shared, has a material impact of the finances of the City and it is in the City's best interest to continue the existing assistance mechanism and extend terms to assure that these tax dollars, as well as the foot traffic generated by Best Buy customers, continue for the foreseeable future.
BACKGROUND:
In 2010, as an inducement for, and as a condition of, Best Buy renewing it's then expiring lease, the then owner of Yorkshire Plaza Shopping Center (now Pacifica) and the City entered into a sales tax revenue sharing agreement that provided for the City to rebate 50% of the State portion of the sales taxes the City receives from Best Buy to offset multiple tiers of costs that were necessary to keep Best Buy in place. The rebate was capped at a maximum of 10 years or $2.0 million, whichever came first.
The current Best Buy lease is scheduled to expire in about 18 months. Pacifica believes, and the City concurs, that having Best Buy commit now to extend until 2029 will complement their substantial efforts to upgrade, reposition and stabilize the remaining 85% of the shopping center by not only removing uncertainty, but by assuring that a revenue stream that has been a reliable source of income will continue not only for ownership but for the City as well. The existing agreement will remain in place until the new, similarly structured agreement, becomes effective in February 20...
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