Title
Public Hearing: Southside Plaza Land Clearance for Redevelopment Authority Redevelopment Plan
Body
Issue/Request:
Public hearing to consider the proposed Southside Plaza LCRA Redevelopment Plan to provide tax abatement for rehabilitation and refurbishment of the shopping center.
Key Issues:
Tax abatement through the LCRA for shopping center rehabilitation and blight clearance.
Proposed City Council Motion:
No motion in public hearing. As ordinance is on the agenda for the Redevelopment Plan.
Background:
On June 9, 2020, the City Council approved Ordinance No. 8894 which approved the formation of the Southside Plaza Community Improvement District (the “CID”) to provide a funding source to reimburse Brain Dev 3, LLC (the “Developer”) for improvements to be made to the project in an effort to redevelop and revitalize the shopping center. The CID will impose an extra 1% sales tax on all retail sales in the shopping center, and the resulting sales tax revenue will be used as a source of reimbursement to Developer for qualified renovation costs.
After the CID approval, it was learned that the CID revenue projections were based on inaccurate data about prior taxable sales levels at the shopping center. The Developer originally expected that the 1% CID sales tax would provide sufficient funds to reimburse about $1.44 million in eligible costs, and this was the maximum reimbursable amount. Instead, the revised revenue projections are that the CID can reimburse only about $474,000 over the life of the CID, creating a gap of about $966,000 as compared to the original CID incentive projections.
To remedy this gap in the reimbursement payments, the Developer is requesting that the City approve an LCRA Redevelopment Plan that would provide the following incentives:
(1) sales tax exemption on the purchase of construction materials that would generate an approximately $63,000 savings during the construction period and
(2) real property tax abatement...
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