By Edward Lynn, Editor
The city council approved a development agreement with First Bank on Tuesday, authorizing tax increment financing (TIF) payments not to exceed $400,000 to support a downtown project.
“This is for the project downtown, where taxing payments will not exceed $400,000,” said City Administrator Bryce Davis. “Typically, we do 50% of your taxes get rebated back to you over a 10-year time span, not to exceed $400,000. Based on their development, it’s unlikely that they’ll pay $400,000 in taxes over 10 years. So they’d like to increase that to 70%, which means the city maintains 30%, and once they pay their taxes, we’ll reimburse 70% twice a year and not to exceed $400,000.”
Council member Denny Vandewater raised concerns about the agreement’s provision for the city to acquire property at 2321 West Broadway, currently the First Bank drive through location. “Why do we need to purchase?” Vandewater asked. Davis explained that the property transfer was part of the overall incentive package. “They want us to liquidate it. But that’s part of the incentive of the $400,000, so we get it with that $400,000,” he said. “Then they can write the $75,000 off, and then we can liquidate it.”
Council members sought clarification on whether the city would be paying for the property. “So we need to make that clear that there’s no check going from the city,” City Attorney Lynn Seaba said. “Or the city will accept dedication at the value of $75,000, so maybe the word ‘purchase’ isn’t the word we need.”
The agreement also includes infrastructure improvements related to overhead power lines. “If those go underneath, such as going to, like, a transformer, there’s some assistance there,” Davis said.
Asked if the plan was to demolish the building, sell it, or just use the parking lot for city purposes, Davis responded, “that’s a conversation piece if we want to sell the building as is, once it’s dedicated or additional parking space. Yeah, we can have that conversation later.”
The resolution was amended to clarify that the city is not making a financial transaction for the property and to explicitly state that the $75,000 valuation is for tax and depreciation purposes. “We’re just changing the verbiage as far as explaining what the terms are,” Council member Mike Weland clarified.
The motion to approve the agreement, with clarifications, passed unanimously.
