• warning: Parameter 2 to ed_classified_link_alter() expected to be a reference, value given in /home/soloneconomist/www/www/includes/common.inc on line 2968.
  • warning: Parameter 2 to ed_classified_link_alter() expected to be a reference, value given in /home/soloneconomist/www/www/includes/common.inc on line 2968.

City mulls impact of TIF rebate for Main Street project

HPR applies for $350,00 to help build “121 on Main”

SOLON– They didn’t say yes, but they didn’t say no.
At a regular meeting Feb. 1, members of the Solon City Council directed City Administrator Cami Rasmussen to project the impact of between $125,000 and $200,000 in Tax Increment Finance (TIF) rebates over the span of five budget years for a proposed Main Street development.
The move was in response to a TIF application by HPR Investments LLC seeking $350,000, or 10 percent of the $3.5 million project cost, in assistance for “121 on Main,” a mixed-use two-story building slated to replace three Main Street residences.
Council members dismissed the idea of paying the full request, discussing a lesser commitment ranging from $25,000 to $40,000 a year for five years. No action was taken on the application.
Instead, the city asked the developers to obtain a more detailed estimate of the proposed structure’s value after construction, which Rasmussen will use to help project future tax receipts. Rasmussen will report back at a future meeting.
HPR Investments proposes to tear down the three houses between Big Grove Brewery and the corner of West Street and construct a single building with 12,000 square feet of ground level commercial space and eight condominiums on the second story. One of the three houses targeted– 131 W. Main St.– belongs to Mayor Steve Stange and is currently the subject of a purchase agreement.
The TIF application stated HPR hopes to begin demolition in spring with completion in early 2018.
The council’s finance committee met with the developers in December.
Council member Steve Duncan, a member of the finance committee, said at the Feb. 1 meeting he didn’t feel the city was in a position to even consider the requested amount.
He said the committee asked Rasmussen to calculate the budgetary impact of $200,000 for informational purposes, but added he was not advocating for that level of contribution.
Rasmussen indicated the amount would have to be broken up over a five-year period in the form of property tax rebates. The city would also have to amend its urban renewal plan, something Rasmussen said would cost about $5,000. The details of the rebate would be negotiated as part of a developer’s agreement.
“The impact of $200,000 at $40,000 a year over five years is a definite impact to our general fund,” Rasmussen said.
Some options exist for lessening the blow, she said, including the use of local option sales tax proceeds, recoupment fees or an adjustment to the financing for the city’s new ground storage reservoir.
“If we’re going to commit the $40,000, we have to be prepared to offset the $40,000,” Rasmussen said.
Both Duncan and council member Shawn Mercer liked the plan for 121 on Main, but were uncertain how to translate their support into a figure.
“I feel comfortable somewhere in that $40,000 range, probably more like 25 rather than 40,” Duncan said, noting he saw a lot of value in the project and felt the application was well thought-out.
“Their presentation considered all the things we struggled with,” Mercer said. “They’ve had some pretty solid ideas in regard to parking.”
121 on Main’s residential units would include two-car garages, with additional guest spaces, to the rear of the property, and developers acquired an additional lot (120 W. Short St.) for commercial parking to the south. The extension of diagonal parking on Main Street is expected to provide added on-street stalls.
In the TIF application, developers justified their request for city assistance in part by asserting the additional lot for parking could provide public spaces.
Additionally, HPR Investments suggested no demolition costs would have been incurred if a vacant lot had been selected, and applied for an amount consistent with other Main Street projects like Big Grove Brewery and Red Vespa, the application stated.
“It’s just what degree of risk the city is willing to take to support a project of that scope,” Mercer said.
When council member Lynn Morris questioned the number of jobs created by the project, Mark Pattison, representing HPR Investments, indicated the 10-15 full-time and 25 part-time positions listed on the TIF application were estimates.
The bigger impact for the city, Pattison suggested, would come from property taxes.
“We’re talking about a $4 million taxable entity versus $350,000 houses,” Pattison said. “So you’re talking for that section of land on that block going from roughly $7,500 in taxes per year, to $75,000.
“That’s probably the easiest way to look at it,” he added.
Council members Mark Prentice and Mark Krall both wanted to know if approving the application would prohibit the council from considering other TIF requests.
Krall said he would consider a $30,000 per year rebate, but both he and Morris wanted more detail.
“I do not feel adequately educated to make a decision tonight,” Morris said, adding she was “100 percent” behind the proposed concept.
“It’d be nice if we could come up with some more detailed figures,” Krall added, concurring with Morris.