The Garden City Commission on Tuesday approved a petition to begin the process of possibly instituting a sales tax hike at the brewery under construction on Main Street.

Fulton Founders Brewery, Inc., is redeveloping the building located at 2017 N. Main St. that was formerly occupied by Bike Rack, Inc. To defray the project’s estimated cost of $1.1 million, the petition begins the process to establish a Community Improvement District (CID) unique to the property and a corresponding 1 percent sales tax hike to bring extra revenue reimbursement to the business from the city amounting to approximately $335,000, or 30 percent of the total project cost.

With Garden City’s existing 8.95 percent sales tax rate, the increase would make Fulton Founders Brewery’s rate 9.95 percent, putting it on par with the Garden City Stone Development, which includes Old Chicago Pizza and Taproom, the Heritage Inn, Parrot Cove Water Park, Core Fitness, the Stone Creek Plaza complex, the Clarion Inn and the Sleep Inn.

“This is a pretty massive investment on our part on the deal,” said John Chappel, a stakeholder in the project. “We’re trying to do this properly and want to maintain it properly and know that we’re going to have additional expenses after we open the door… We know we’re going to need the help, so we’re wanting to use this in our future.”

Commissioner Troy Unruh commended Chappel and other project stakeholders for selecting a property in the downtown corridor for the brewery’s development.

Lona DuVall, president and CEO of Finney County Economic Development Corp., said CIDs are statewide development incentive tools that come with both risk and reward.

“They are the owner and the operator taking that on themselves,” she said. “They’re saying, we’re willing to collect a higher sales tax knowing full well that the public may very well demand that they provide a higher level of service or quality as a result of that. “

She said the use of the CID tool presents a gamble in that regard, but that it’s “absolutely a tool worth utilizing, specifically when you’re doing the rehabilitation of a building, and especially one that’s as old as the building they’re currently using,” which was built in 1928.

Commissioner Lindsay Byrnes asked why the business owners don’t simply raise their product prices by 1 percent, and DuVall said that comes down to a matter of philosophy, but the CID tool provided by the state is appropriate.

Commissioner Melvin Dale motioned for approval of the petition, which passed unanimously among the four commissioners present in absence of Mayor Roy Cessna.

The commission now will adopt a resolution of intent and schedule a public hearing for creation of the CID district. The resolution will be brought before the governing body at a later date.

In other business:

• The commission was notified of the resignation of four of five Finney County Transit Advisory Board members. The city is charged with filling two of the board’s positions per an interlocal agreement.

• The commission approved up to a $75,000 payment to Fry Eye Associates, P.A., for construction of a concrete improvement to a city alley east of College Drive in conjunction with the development of the new Fry Eye Clinic.

• The commission approved an ordinance waiver to allow for discharge of fireworks within the city limits of Garden City from June 27 to July 5 from 10:30 a.m. to 10:30 p.m.

 

Contact Mark Minton at mminton@gctelegram.com.