Progress on a proposed hotel/restaurant development at Holcomb has been somewhat delayed while officials work on a modified tax increment financing plan for the project.
The project — which includes a hotel and possibly a restaurant and convenience store — has been on the agenda for more than a year. The development would be located near the intersection of Big Lowe and Jones Road in Holcomb.
Plans for development began after highway improvements created an exit into Holcomb that looked well-suited for retail and light industrial uses with convenient access to U.S. Highway 50.
Choice Hotels, which includes several hotel brands such as Comfort Inn, Comfort Suites, Clarion and Sleep Inn, has submitted a letter of intent to build a hotel in Holcomb.
In December, the Holcomb City Council announced support for creating a TIF district and a Community Improvement District for the development. But officials later learned the property couldn't use a traditional TIF because of the timing of its annexation into the city.
Under a traditional TIF, a property must be identified as blighted or part of a neighborhood revitalization zone to qualify.
In the Holcomb Plaza development's case, the property wasn't inside the city limits at the time the city created a redevelopment zone in the late 1980s. As a result, the city needs to either declare the property blighted or ask for inter-local agreements with other taxing entities such as Finney County, Garden City Community College and the Holcomb school district. Securing agreements is the faster option.
In a traditional TIF, the TIF can move ahead as long as none of the taxing entities protests. Inter-local agreements will have the same impact as a TIF, but would require a more proactive action by the other entities.
Holcomb Mayor Gary Newman said formal agreements are being prepared to present to Finney County and GCCC. The school district will not impacted. Newman said the school district will continue to get the increased tax dollars generated by the development.
Newman anticipates the formal agreements will be ready sometime next week, and will be presented to the other taxing entities for consideration at their next regularly scheduled meetings.
"Because we informally presented the idea to both, and they supported it, we're hoping they'll be able to finalize the agreements at those meetings," Newman said.
The agreements would then go back to the Holcomb City Council for final approval. The next step would be to formalize a developer's agreement for the project.
The developer will use new taxes generated by the development to help pay for infrastructure, such as new streets, lighting, sidewalks, landscaping and water service.
In a TIF, the property's taxes are set at a base level for a number of years. Then, as development occurs and the property increases in value, the additional property tax generated is used to pay for the developer's initial infrastructure costs. When the TIF is paid off, all the increased revenue from the higher valued property is distributed to local taxing entities. The modified TIF will be structured in a similar way.
The creation of a Community Improvement District will allow businesses within the district to charge an additional 1 percent sales tax on eligible purchases. For instance, an item that normally sells for $1.08, including local sales tax, would cost $1.09 within the CID. The developer will state up front how much they need from the CID and when that threshold is reached the CID will expire.
In addition to creating the modified TIF and CID districts, the city's share of the project will be to extend sewer service to that area. The developers will be responsible for all the other infrastructure costs, which they will recover through the TIF and the CID.
The project has a commitment from a hotelier. Other parts of the development are generally anticipated to include a restaurant, commercial retail businesses, a truck stop/wash, storage units and other light industrial uses subject to zoning approval.
Once the TIF and the CID are created, the developer's agreement will be finalized, allowing the developer to recruit and market the property to other companies.
In September, Holcomb's city council committed to using a $450,000 general obligation bond to pay for sewer improvements for the development. As businesses come online, the bond will be paid back through water and sewer utility payments.