CITY COMMISSION AGENDA ITEM

Department:	City Manager’s Office		Commission Meeting Date:  August 15, 2017
Staff Contact:	Diane Stoddard, Assistant City Manager
Recommendations/Options/Action Requested:
Receive application and request from Treanor Investments, LLC. for incentives related to a proposed mixed-use grocery store project at 700 New Hampshire and refer to staff to process in accordance with the City’s economic development policies and procedures; and authorize the City Manager to enter into a study funding agreement for the developer to fund the required studies and other documents which may be required related to the project.  Provide any additional direction to staff, if appropriate.
Executive Summary:		The City is in receipt of an application from Treanor Investments, LLC requesting incentives for a proposed mixed-use grocery store and apartment development on the corner of 7^th and New Hampshire on the site of the former Borders building.  Specifically, the developer is requesting a pay-as-you-go Tax Increment Financing (TIF) District, a $2.25 million interest-free or low interest loan for tenant finish of the grocery store, and Industrial Revenue Bond (IRB) financing, through which a sales tax exemption for the materials used in construction could be obtained for the project. A grocery store in the downtown area would be advantageous for the viability of downtown residential growth and also address a need for the general area of the community that is federally designated by the USDA as low income and low access, where a significant number of residents are more than one mile from a grocery store (often referred to as a food desert).  The City has formal processes related to the proposed development that involve site review, historic review, downtown design guideline review and other actions.  There is also a formal process for the review of incentives which requires the review by the Public Incentive Review Committee and various formal steps at City Commission meetings.  As the studies and materials are compiled relating to the incentives and the planning items, staff anticipates issues relating to parking, building design, site access, and other matters will be discussed in detail.  For example, the City purchased rights to certain public parking spaces on the property. The City’s economic development policy and procedures requires the applicant to be responsible for studies, legal and other fees which may be incurred by the City in order to process the application.  Staff has prepared, and the developer has executed, a study funding agreement that requires the deposit of $30,000 by the developer in order for the City to proceed with this work.  The funding agreement makes no obligation on the City regarding the outcome of the application- proceeding is at the risk of the developer.  Authorizing the City Manager to execute the funding agreement will enable these studies to proceed.  Finally, in July, the City received a letter from Dr. Brian Russell, a plaintiff in a lawsuit against Treanor Investments, LLC relating to restrictive covenants on the Hobbs Taylor Loft property.  The letter requests that the City not proceed with consideration of any public incentives or any other necessary permissions relating to the proposed project.  A district judge ruled in favor of Treanor Investments, LLC in June, but the plaintiffs are appealing that ruling to the Kansas Court of Appeals.  Staff believes that the process of consideration can still proceed, but at the risk of the developer.    If the City Commission has any overall direction related to the application for incentives, it would be helpful for staff to have that direction at this time so that it may be incorporated into discussions with the development team.
Strategic Plan Critical Success Factor		Safe, Healthy, and Welcoming Neighborhoods Economic Growth and Security
Fiscal Impact (Amount/Source):		The proposed funding agreement requires the developer to be responsible for costs related to the study of the proposed project.  There is no additional fiscal impact to the City at this time.
Attachments:		Application Applicant Presentation Materials Funding Agreement Letter from Brian Russell

Reviewed By: (for CMO use only)

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