A new $1.3 million office and retail facility at the corner of Sargent Street and U.S. Highway 77 in Beatrice will get the help of tax increment financing.
The Beatrice City Council unanimously approved 6-0, with Councilman Gary Lytle absent, Monday night to allow Southwick Enterprises, LLC, to use tax increment financing in the project.
Southwick plans to start turning dirt in two weeks on the $1.3 million project to build 6,500 square feet of office and retail space, Michael Southwick of Southwick Enterprises said. The project would eventually include additional phases that would expand the 6,500 square feet of office and retail space to 12,000 square feet of retail and office space as future tenants are secured.
“Our hope with this development is to bring in some employment opportunities and great business activity to Beatrice,” Southwick said.
The development would serve as the new home of Southwick’s Chiropractic and potential business tenants, such as restaurants, health care or other retail operations, Southwick said. They are currently talking with potential tenants, he said. But, at this time there are no firm tenants.
Southwick Enterprises requested the tax increment financing to assist in paying for the upfront costs on the development of the land to bring in utilities, such as water, electric and sewer. The total amount that would be received from tax increment financing would be about $160,000.
Under state statute, tax increment financing, which is a means of encouraging private investment in deteriorating areas by allowing city governments to devote all property tax revenue increases to repay the public investment needed to attract development of areas designated as blighted or sub-standard, can be used for the cost of building property infrastructure, but not for the construction of buildings, Beatrice Mayor Dennis Schuster explained. The area Southwick is looking to redevelop was classified as blighted and sub-standard about 10 years ago.
Tax increment financing can be commercial, residential, industrial or mixed use, according to state statute. It has been used by retail operations in Beatrice, including Tractor Supply Company and the Holiday Inn Express Hotel and Suites.
Councilman Alan Fetty said the public needs to understand that the city, when allowing tax increment financing, is not giving money away for these types of projects.
“It’s simply a tool that (the developers) are going to use to use the taxes they pay, the taxes they are levying on themselves, to pay for the infrastructure,” Fetty said. “This is nothing that costs us.”
With the redevelopment of the property, the taxes will increase as the value of the property increases, and eventually the city will collect more taxes in the end, Fetty said.