Title
Conduct a public hearing and consider a resolution approving the terms and conditions of a program to promote local economic development and stimulate business and commercial activity in the City, authorizing the City Manager to finalize, execute and administer a Chapter 380 Economic Development Performance Agreement (“Agreement”) for such purposes by and between the City of Mesquite, Texas, and Town East Mall, LLC, (“Developer”) and granting to the Developer certain economic development incentives, and authorizing the City Manager to take such actions and execute such documents as are necessary or advisable to consummate the transactions contemplated by the agreement, and administer the agreement on behalf of the City.
Body
Town East Mall, LLC, an entity of Brookfield Properties which owns Town East Mall, proposes to enter into an agreement with the City of Mesquite to facilitate maintaining the Macy’s department store in their current location and capacity as a big box anchor to the mall for a minimum of five-years, with up to ten-years incentives.
Recent news reports the Macy’s brand closing stores nationwide and in particular, closing five DFW area locations. The proposed agreement between the City of Mesquite and Town East Mall, LLC, would provide for a 50 percent (one-cent of local Sales and Use Tax revenue of the two-cent collection) rebate of the amount of Macy’s annual taxable sales for up to 10-years payable to Brookfield (Town East Mall, LLC) and transferrable to Macy’s.
The proposed agreement requires that the Macy’s store retain a merchandise mix and image comparable to the Macy’s of other local DFW stores such as that of the Northpark Center store and maintain a minimum of $15 million annual sales to qualify for the one cent Sales and Use Tax rebate. Additionally, Brookfield would conduct $250,000.00 in repairs and maintenance 1) $150,000.00 worth of landscaping, building, and lighting improvements and 2) entryway improvements up to but not to exceed $100,000.00 to the Town East Mall site (sans the Elm Creek tract, site of the old Sears.) The City would participate in an additional $150,000.00 worth of entryway improvements as needed.
The total Sales and Use Tax incentive over 10-years would provide for a cap of $2.5 million in rebates. If in any one year the sales fall below $15 million, Macy’s would not receive the annual rebate and be given one year to re-qualify achieving the minimum sales. The incentive grant would be paid annually, and only if the maintenance of the property is maintained to City standards along with the minimum sales requirement.
The attached resolution will authorize the City Manager to finalize and execute a Chapter 380 Agreement that outlines the responsibilities and obligations of the developer and the City.
The City Council authorized staff to proceed with the project in Executive Session on January 21, 2025.
Recommended/Desired Action
Following the public hearing, staff recommends approval of the resolution.
Attachment(s)
Resolution
Drafter
Kim Buttram
Head of Department
Kim Buttram