SILT — As part of a continuing campaign to attract new businesses to town, the board of trustees on Monday agreed to a multi-layered, economic development financing plan to help a Subway restaurant locate on an in-town property currently owned by Mayor Dave Moore.
Moore, who was at the meeting but recused himself from the discussion and vote on the Subway matter, confirmed he is selling a piece of land next door to the Gofer convenience store to the Subway developers, but he declined to disclose the sale price. According to town documents, Moore’s last property tax bill for the lot came to $1,370, a sum that the town expects to increase to approximately $5,465 in annual property taxes once the restaurant is built.
Moore’s property is located within a part of the town covered by a Finding of Blight study — approved in January 2012 — determining that Silt was suffering from a type of urban blight, which was a necessary precursor to creating the Silt Urban Renewal Authority (SURA) and using it to spur development in town.
The lending arrangement calls for the town’s Water and Wastewater Activity Enterprise fund to lend $200,000 to the town’s Economic Development Revolving Fund (EDRF), and for the EDRF to lend the money to the SURA for use in paying the cost of infrastructure along U.S. Highway 6, which runs in front of the Subway lot.
Town Administrator Pamela Woods told the trustees that there is more than $2 million in the Water and Wastewater fund, so the loan to the EDRF should not cause any financial problems.
According to documents laying out the SURA’s role in the development plan, the deal has been in the works since May, when M. Bradney Higginbotham, CEO of Higgy Investments LLC and owner of existing Subway restaurants in Rifle and Parachute, approached the town with a proposal to open a franchise restaurant in Silt.
“Higgy Investments LLC and the property owner, David C. Moore, went under contract soon thereafter,” the documents state.
“Private enterprise has failed to develop the property,” the SURA documents state. “The current proposal allows for a public/private collaboration that will achieve what private enterprise has been unable to achieve on its own.”
The improvements to be paid for by the loan include curb and gutter, sidewalk, underground electrical, a parking lot that will be for public use as well as customers, realignment and replacement of natural gas, water and sewer lines, as well as administrative, legal, engineering and staff time spent on the project.
The property in question is a lot measuring 60 feet by 100 feet, and the cost of the infrastructure is expected to be between $150,000 and $180,000, or perhaps a little more.
The $200,000 loan is to be repaid over the course of 25 years, at 3 percent interest. The annual payments are projected to be $11,381.07, which will bring in approximately $84,526 in interest to the town’s coffers once the loan is paid off.
According to the documents, the SURA will repay the loan using proceeds from the property taxes and 2 percent of the annual sales tax collections, formulated as a Tax Increment Financing revenue stream.
The town anticipates getting $15,600 per year in sales tax revenues from the restaurant’s operations.
The loan proposal passed by a margin of 5-0, with Moore and Trustee Paul Taylor abstaining, although Taylor gave no reason for his decision to not vote on the matter.