Council OKs $200K in TIF funding for local developer

Wednesday, April 8, 2020

McCOOK, Neb — After postponing the request from a March meeting, the McCook City Council approved Monday night $200,000 in tax increment financing for a local developer who plans to upgrade a vacant building on B Street to be used for various businesses.

James Hegwood, managing member of Blackwood Enterprises, is proposing to improve a vacant building he purchased at 520 West B and requested TIF at a previous council meeting in March. The request had already been approved by the City of McCook Planning Commission, but the commission cited concerns about the lack of available parking. At the March 16 council meeting, City Manager Nate Schneider tabled the TIF request to give Hegwood time to address the parking concerns.

At Monday’s meeting, Hegwood was not present but had submitted a site plan of the building with 20 parking stalls designated in back of and along the north side of the building. Council member Janet Hepp asked about the drive-through on the site plan, as the proposed parking stalls are directly behind it and Schneider said that is no longer part of the development.

Schneider told the council that the building is within the city’s redevelopment plan that cites areas as blighted and substandard and thus is eligible for TIF. It also fits in within the city’s comprehension plan, he added, with the upgraded building promoting economic development. The project is similar in scope and intent to other TIF projects in the city, he said, although slightly smaller.

Other projects in the city that have used TIF include the income-based housing units of Clary Village and Quillan Courts, Holiday Inn Express, Valmont, and Next Generation Inc., at the city’s industrial park.

The vacant building was built sometime in the 1950s and needs significant upgrades to the exterior and interior, Schneider said, with TIF funding eligible for exterior upgrades only.

Councilman Gene Weedin asked Schneider to explain how TIF funding does not include any city money. Schneider said the building is currently assessed at $135,000. After improvements, the Red Willow County Clerk assessed the projected minimum valuation of the building at $1,139,857. The projected incremental valuation is $1,004,857. With the assumed property tax levy at $1.911555, anticipated tax increment annually is $19,208 annually. The $200,000 TIF loan to the developer is for 15 years at 5%. The city is “not on the hook for anything,” Schneider said, adding later that TIF requires that the developer cannot protest the valuation and cannot sell it to an entity that doesn’t pay taxes.

The area for the proposed development, along U.S. Highway 34, is a prime spot for TIF funding and he hopes that it will continue and keep the money local, said McCook Economic Development Corp. director Andy Long via teleconferencing.

After public hearings, the City Council, convening first as the Community Development Agency and then as the council, unanimously approved Blackwood Enterprises in the redevelopment plan and the TIF loan.

Respond to this story

Posting a comment requires free registration: