Marion revamps agreement with East Town Crossing developers

The city of Marion has revamped its agreement with the developer of the East Town Crossing project, at the intersection of Highways 13 and 151 on the city’s eastern edge. The revamped plan splits a single agreement into three, including a separate new agreement with the developer of the proposed Holiday Inn Express at the site. City manager Ryan Waller said the revamped development plan for the area, unanimously approved by the city council at its regular meeting April 6, will simply administration and understanding of the agreements by removing the hotel lot and three unbuilt lots, extending the new agreement to 20 years at a 50% incentive if the Holiday Inn Express hotel is built, and removing the usage of hotel/motel funds in favor of tax increment financing (TIF), allowing hotel/motel funds to be used for other community-wide projects. The main agreement with Squaw Creek Crossing Inc. the primary developer of the East Town Crossing project, only includes development that has occurred or is actively occurring at East Town, Mr. Waller said. It also reduces the total city incentive from $9.6 million to $7.5 million, based on estimates for known projects at the development. A new, separate development agreement has been reached with Bravehart Development and Hart Family Hotels for the hotel project. The new agreement, which can be assigned to a separate hotel developer if needed, provides a new five-year tax incentive for 90% of the extra value created by the project, and another five years at 50%, with a maximum value of $1.5 million. Mr. Waller said the hotel developer indicated the hotel project was not feasible without an additional incentive, due to rising construction costs, and recently submitted an application for financial assistance to the city.  In 2019, the hotel project was estimated at $11 million, but at the time of application, the cost had risen to $17.5 million. Plans currently call for the 93-unit Holiday Inn Express to be substantially completed by the end of 2025, Mr. Waller said. And a third agreement, a memorandum of understanding, has been established for three unbuilt lots at East Town Crossing, lots where development plans haven’t yet been solidified. It uses the same terms as the former amended development agreement, including a 12-year sliding scale incentive with a maximum benefit of $1.2 million. “The advantage of the MOU is that it does not lay out payment phasing as a formal development agreement does,” Mr. Waller said via email. “This gives us flexibility in timing with the understanding that an Urban Renewal Amendment Process and development agreement would follow.” All items in the amended development agreement are either completed or underway with the exception of the last of three multi-residential apartment buildings at the development. Mr. Waller said the property owner and lead project manager for the multi-residential building has passed away, and Squaw Creek Crossing, Inc. is working to track down the heirs. An agreement exists between Squaw Creek Crossing and that developer to ensure the third building is completed, Mr. Waller said. Squaw Creek Crossing Inc. is actively seeking leads for the unbuilt lots, Mr. Waller added. East Town Crossing, formerly known as Squaw Creek Crossing, is Marion's first large-scale mixed-use development, with over 20 acres, including retail, service, hospitality, commercial and residential projects. Development of the project began in 2017. Businesses in the development include Kwik Star, Dupaco Credit Union, Pancheros, Jersey Mike’s Subs, Pizza Ranch and the MAC. A Scooter’s Coffee opened at the development last fall, and a second location of Daisy’s Garage restaurant is under construction. Two multi-family apartment buildings are also part of the development. The development has a current taxable valuation of just over $20 million. Another $4.7 million could be added if the lots included in the memorandum of understanding are developed, city officials said, and the hotel would add another $7.1 million.