Thornton City Council discussed the proposed Eastlake Grain Elevator project at the Jan. 18 planning session meeting, and much debate surrounded whether the city should pay developers infrastructure …
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Thornton City Council discussed the proposed Eastlake Grain Elevator project at the Jan. 18 planning session meeting, and much debate surrounded whether the city should pay developers infrastructure reimbursement.
“(It’s) a wonderful opportunity to create a unique downtown style destination for the City of Thornton,” Julie Jacoby, a member of Thornton’s Economic Development team said.
According to Jacoby the area needs water, drainage, sewer and other infrastructure that would total almost $2 million before the development starts. But that estimate is based on 2019 values, she said, and there has been a 40 percent increase in construction costs since that number was calculated.
Jacoby said the council will vote on approving a purchase and sale agreement, and an infrastructure reimbursement agreement for the project.
The city purchased the Eastlake Grain Elevator in 2001. A 2016 request for proposal for renovations there only received one response. The city rejected it and has waited for others to come in, Jacoby said.
The city has spent about $50,000 on an American Land Title Association Survey, Geotech Soils Study and a Structural Assessment. Jacoby said this was to provide developers with an idea of the condition the grain elevator was in and anything that would be required from them.
The Carlson family was selected as the developer of choice in 2019 and city staff moved forward with the sale and infrastructure reimbursement agreements. Requirements from the city include preserving and enhancing the historic infrastructure, including the 1920s era Head House and Warehouse.
The Carlson’s vision is to use 1.99 acres of the land to create a vibrant and unique restaurant hub as a gathering place for folks, Jacoby said. The Head House and The Shed would become full-service restaurants and the Scale House a bakery/coffee shop.
Deciding who pays
Jacoby said the Carlson’s asked for the city to build the infrastructure and waive entitlement fees, meaning they would receive both the infrastructure and the land for free.
“It becomes cost-prohibitive for any developer to do the project,” said Jacoby, if the city does not subsidize that portion of the project.
City Councilor Kathy Henson didn’t buy it.
“So we’re giving them the land and we’re building the infrastructure?” she asked. “It’s a negotiation, (developers) are always going to ask for that, I do not understand why we, the city, are paying them to build the infrastructure when that’s what (developers) do.”
“It must be nice to be the Carlsons,” said City Councilor Karen Bigelow.
Jacoby said the development would be more expensive since the Carlsons would be maintaining and renovating the current structure, instead of bulldozing and building from the ground.
“This is a higher cost of development on top of the fact that it’s probably going to be a lower return on investment,” she said. “The users we’ve specifically asked them to focus on for the space are going to be small mom and pop types of retailers.”
She also said she expects approximately $2 million in tax revenue over five to seven years from the project.
Burden or benefit
John Cody, Thornton’s Economic Development Director, said without the city paying for the infrastructure, developers won’t take it.
“If the burden is on (the developers) to make these infrastructure improvements, then they won’t do it,” he said.
Henson asked if the city often pays for the infrastructure for developments and Cody said it is common for the city to fund infrastructure that facilitates development. Jacoby said it is a common negotiating tool.
“We never recommend something if we don’t think it’s a good deal for the city, because we are going to get something back out in the long term,” Jacoby said. “In the long term, it serves the city’s best interest from an economic development standpoint.”
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