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City Council Meeting Minutes October 16, 2012 Page 4 of 15 RESOLUTION NO. 65, SERIES 2012—A RESOLUTION APPROVING A BUSINESS ASSISTANCE AGREEMENT WITH ALFALFA'S MARKET, INC. FOR A NEW RETAIL OUTLET AT 707 E. SOUTH BOULDER ROAD IN THE CITY OF LOUISVILLE Mayor Muckle requested a staff presentation. Economic Development Director DeJong explained Resolution No. 65, Series 2012 proposes an economic development business assistance package (BAP) for Alfalfa's Market, LLC (Alfalfa's) to establish a 22,000 square foot natural foods market on the former Safeway property at 707 E. South Boulder Road in Louisville. Based upon the desire to attract new sales tax to the City of Louisville, establish the community's first large scale natural foods grocer, increase sales tax, fill existing vacant space and make the Louisville site more desirable than other options Alfalfa's may be considering, staff recommends City Council approve a Business Assistance Package for Alfalfa's. The project meets the general criteria in the City's Business Assistance Policy under which the City may provide assistance. The former Safeway site is one among several sites in the metro area Alfalfa's is considering to expand its operations. In this case, Alfalfa's is evaluating whether to lease 22,000 square feet of retail space that may be constructed at the former Safeway site as an element of a redevelopment project proposed by Loftus Development. If Alfalfa's selects that location, it could involve as many as 100 full and part time employees at first opening, with an annual payroll of around $2.0 million. The main items of the proposed agreement are more aggressive than previous assistance packages: • Rebate of 50% of the building Permit Fees attributable to Alfalfa's component of the project. • Rebate of 50% of the Construction Use Tax on the building materials used for the construction of Alfalfa's component of the project. • Rebate of 50% of the Use Tax paid by Alfalfa's attributable to the start up and first twelve months of operation at the project location. • Rebate of 100% of the incremental sales tax revenues derived from the imposition of the City's 3.0% general sales tax (excluding the City's three- eighths percent (3/8%) Open Space Tax and one-eighths percent (1/8%) Historic Preservation Tax) and actually collected by the City and attributable to retail sales from Alfalfa's activity at this location for the first three years of operation. The sales tax rebates are capped at $800,000.