Title
Resolution - A Resolution of the City of Mansfield, Texas Authorizing the City Manager to Execute an Amended Chapter 380 Economic Development and Performance Agreement with Backyard Come as You Are, LP and Brian Storm Shelter, LLC Regarding the Backyard Development for Public and Private Improvements to Property Within the Tax Increment Reinvestment Zone Number Two
Requested Action
City council authorize the city manager to execute an amendment to the Chapter 380 development and performance agreement between Backyard Come as You Are (BCYA), Brain Storm Shelter (BSS), and TIRZ No. 2 with the terms identified by city council.
Recommendation
City council authorize the city manager to execute an amended agreement with BSS, BCYA, and TIRZ No. 2 with the terms identified by city council.
Description/History
* On March 28, 2016, the city council approved a resolution (RE-3226-16) authorizing the city manager to execute an economic development and performance agreement between the City, Backyard Come as You Are, Brain Storm Shelter, and TIRZ No. 2.
* Among other terms defined in the agreement, the definition of "restaurants" was identified as - three restaurants on the property to include Twisted Root, Quincy's Chicken Shack and a third restaurant concept operated by BSS or a third party...
* Backyard Come as You Are (Developer) and Brain Storm Shelter (Operator) have since notified the City that Quincy's Chicken Shack will be replaced by Tacos and Avocados, a restaurant concept operated elsewhere by BSS, and that the third restaurant concept will be Hypnotic Emporium.
* The developer and operator have requested that certain amendments be made to existing agreements with MEDC, MPFDC, and the City/TIRZ.
1 - The restaurant names in the agreements should be amended to include Hypnotic Emporium and Tacos & Avocados (which will replace Quincy's Chicken Shack).
2 - The operator wishes to forgo the previously approved ten year tax sales abatement in exchange for a single economic development grant of $500,000 with a five year clawback provision, in the form of a five year forgivable loan with 20% being forgiven in each of the first five years that all three establishments are open.
3 - The operator wishes to amend the CO date for the first restaurant.
4 - The operator wishes to amend the CO date for the third restaurant.
5 - The existing Chapter 380 Agreement does not allow Brain Storm Shelter, LLC to operate another Quincy's Chicken Shack or similarly themed restaurant within a 12 mile radius of the property. City council may want to have the same stipulation apply to Tacos and Avocados.
6 - The operator wishes to amend the date on which a minimum of 40 FTE jobs must be created.
Justification
* BSS desires to operate a Tacos & Avocados restaurant in Mansfield instead of a Quincy's Chicken Shack because the operator believes it will be more successful and will generate more sales for the operator and, in turn, more sales tax to the City.
* The current ten year sales tax abatement is structured in such a way that the operator would receive a rebate of 90% in years 1-4, 70% in years 5-8, and 50% in years 9 and 10. Current sales tax rebate estimates provided by the operator over the ten year period would total $884,429. There is no cap on the rebate, as the amount rebated to the operator depends entirely on the sales tax generated.
* MEDC and MPFDC, by statute, may not participate in the sales tax rebate. Thus, the full rebate must be reimbursed from the general fund.
* A single, defined economic development grant would clearly define the limits of the general fund's participation.
* The requested funds would be used for constructions cost attributable to all three restaurants.
Funding Source
TBD
Prepared By
Joe Smolinski
Deputy City Manager
joe.smolinski@mansfieldtexas.gov
817-728-3601