Aldermen in the Maple City formally entered into a development agreement with grocer Hy-Vee at Monday night’s meeting.
With the City of Monmouth looking to expand the Downtown Tax Increment Finance District, businesses and developers must request to be inducted into the district and also have a development agreement with the city.
Earlier this year, city administrators were informed by Hy-Vee that they would like to acquire the former Shopko building and establish a store in Monmouth.
City Administrator Lew Steinbrecher says that the agreement is a performance-based agreement. “They only get the rebate if they perform as they had represented to us. That is to buy the ShopKo property and rehabilitate the building,” Steinbrecher told WGIL on Tuesday morning. “Renovate the building into a grocery store. It also indicates that they need to make a payment to the city of $15,000 to offset the costs of creating the tax increment finance district.”
Steinbrecher also noted that no general fund tax dollars would be used in the rebates to Hy-Vee. He said that the project would preserve the base-value of the property, generating about $73,400 in property taxes a year. Those taxes go to the school districts, county, city, library district, and park district. Those funds would be preserved and only the additional taxing dollars from increased property value would be used for the TIF and be rebated to Hy-Vee.
Steinbrecher estimated that payments would begin in 2022 and it would take around 13 years to fulfill the rebate payments. The agreed-upon rebate of property taxes will not exceed $1 million.
If the developer fails to acquire the property by March 1st, 2021, then the agreement will be null and void.
It is estimated that the cost of developing this property will be in excess of $6 million.
