Mt. Vernon Register-News

January 8, 2013

Council approves TIF agreements

By TESA GLASS
tesa.glass@register-news.com

MT. VERNON — The downtown area will be getting an art gallery and studio featuring local artists in the fall.

Kip and Katrina Bauer were approved for a tax increment financing grant as well as a revolving loan from the city for the renovation project during the city council meeting Monday night. The couple are renovating the building at the corner of Main and Ninth Street for the gallery and studio, with living space on the second floor.

“We are putting in a working art gallery where someone is working and a space where the art will hang,” said Kip Bauer. “You will be coming into our home when you come into our business too.”

The TIF monies, from the Downtown TIF District, will be granted in the amount of 52.6 percent of the total project costs not to exceed $108,020, payable over four years. The project is estimated at a total cost of $205,530.60, with $27,005 payable from the 2013-14 TIF proceeds and the same amount payable for the next three years.

Under terms of the revolving loan approved, the couple will receive a loan for $30,000. Councilman David Wood, prior to voting on the loan, said he went into the revolving loan idea with concerns.

“I met with the city manager this morning,” Wood said. “My concern is that we tend to have too great a risk in lending money, no matter how good the cause is.”

Wood said he discussed with city manager Ron Neibert the terms of the loan and is now behind it.

“Normally we have taken a subordinate position to the lending institutions on revolving loans,” Neibert said. “... In this instance, the bank is funding the renovation portion. Once the project is concluded, the bank is guaranteed a steady stream of TIF funds. At that point, once the bank begins getting the TIF funds, the city will have a first position on the loan. ... That will put us in a strong position to acquire the property if there is a default.”

In addition, the city approved a TIF agreement for the Granada Center for the Performing Arts in the amount of $90,448 to be paid over four years with $15,871 to be paid from fiscal year 2012-13 proceeds; and $24,859 from proceeds for the next three years. The TIF will be used to replace the roof on the auditorium portion of the building, which is projected to have a total cost of $90,448.

Councilman Todd Piper requested information about the scheduling of work anticipated by the Granada and the scope of work with a timetable for completion. Piper said with the influx of public monies, he believes someone from the city should be on the Granada Board to report on how the funds are being utilized. Neibert said he would speak with representatives of the Granada Board and find out information about additional projects anticipated by the group.

In other business, the council: