Should a local property owner be paid business development incentive money by the city even after a store occupying rental space closed? That’s a question the Highland City Council is expected to consider at its meeting on Monday.
The City Council entered into an incentive agreement with Family Care Properties on Jan. 18, 2011, namely for Family Dollar, when that retail store chain located at 1016 Broadway.
Per the agreement, the city waived fees for permits, inspections and utility connections, in addition to granting sales tax rebates and payments based on the footprint of the store.
“The city was to provide an economic development incentive of $1 per square foot per year (with the portion of the year prorated) for 66 months for an annual amount paid to the developer of $8,617 for each of the first five years, with $4,308.50 for the remaining six months,” Highland Economic Development and Marketing Director Lisa Peck said.
However, Family Dollar closed on Oct. 1, 2014, prompting the city to terminate its incentive payments.
But Family Care Properties is now seeking payments from the city for the 233 days that the retail space was vacant, city officials said.
Family Care Properties has since leased the property to Dollar Tree, which opened on May 22, 2015.
Peck said the city followed the original agreement, until such time that Family Dollar vacated the space.
The city has met a couple times with Family Care Properties in hopes of working out an agreement. But City Manager Mark Latham said Family Care Properties has a different interpretation of the initial agreement.
“We will resolve this one way or another at the next City Council meeting,” Latham said.
What the City Council will consider on Monday is paying Family Care Properties the money the company thinks it is owed from the Family Dollar deal, but with language crafted so that the incentive package is based on Dollar Tree occupying the space. It would not be worth any additional money.
“It does provide a mechanism for the city to make incentive payments again, as public benefit is again derived from the lease with Dollar Tree,” Peck said.
However, City Councilmen Rick Frey and Aaron Schwarz have each questioned the proposed incentive package.
“I believe this might start a bad precedent,” Schwarz said.