City Council Agenda and Packet 2013 03 19

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City Council Meeting Minutes March 5, 2013 Page 5 of 14 Economic Director DeJong presented a proposed Economic Development Business Assistance Package (BAP) for Twelve Degree Brewing, for a brewpub to be located at 820 Main Street. The proposed business assistance is a limited assistance award compared to other retail agreements, and includes a partial rebate on both the building permit fees and construction use tax for the needed improvements to the building for the new business. The applicant, Jon Howland is considering 820 Main Street Unit 101 (formerly the Imperial Fez) for the location of a brewery. The business will be a brewpub focused on Belgian-inspired beers and serving a small menu of high-quality food locally-sourced whenever possible. Mr. Howland estimates the operation sales above $1 million within 3 years of operation. Jon Howland was awarded a Business Assistance Package in late 2011 for Rhino Brewing to be located at 736 Main Street. That project did not meet the timeframes specified in the agreement and has expired. Because the downtown area appears to be thriving and is highly desirable for restaurants, staff has not recently proposed new assistance packages for restaurants in the downtown area. However, even under these current economic conditions, staff believes this project should be considered for assistance for several reasons. 1) The project makes improvements to an existing downtown building. 2) The improvements will stay with the building and be beneficial to any future uses in the building, and increase its valuation. 3) A Business Assistance Package was awarded to Gravity Brewing in February 2012. City staff estimates Twelve Degree will generate new revenue of approximately $5,100 from building permit fees and construction use taxes directly to the City in the first year of operation, given needed improvements to the building. Approximately $400 of the amount is fees designated for Open Space and Historic Preservation purposes. Based upon the estimated revenue projection, staff recommends the following: Proposed Assistance Approximate Value Building Permit-Fee Rebate 50% rebate on permit fees for tenant finish $1,500 (Excludes tap fees) Building Use Tax Rebate 50% rebate on Building Use Tax for core and shell and Tenant finish (excludes 0.375 (Y0 Open Space tax and 0.125% Historic Preservation tax) $1,000 Total Estimated Assistance $2,500 PUBLIC COMMENT 28