The tape of this meeting is on file in the Council Clerk’s Office.
TO THE HONORABLE COUNCIL OF THE CITY OF ELYRIA, OHIO:
The Community Development Committee held a meeting on Monday, December 11, 2017 at
6:00 P.M. in Council Chambers.
PRESENT: Committee Chair Callahan, Mitchell, Cerra, Madison, Jessie
OTHERS PRESENT: Mayor Brinda, Safety Service Director Siwierka, Finance Director Pileski,
Law Director Serazin, Assistant Finance Director Farrell, City Engineer Schneider,
Assistant Safety Service Director Brubaker, WWPC Superintendent Korzan, Police Chief Whitely,
Parks Director Reardon
THE MATTER OF THE COMMUNITY DEVELOPMENT COMMITTEE MEETING:
1. Approval of the November 27, 2017 CD and Joint CD/Finance Meeting Minutes.
Cerra moved and Mitchell seconded to approve the minutes of the November 27, 2017 Finance Committee Meeting. MOTION CARRIED
2. The matter of a liquor license transfer from: Shree Gaytri Krupa, Inc., DBA: Outlet Store,
7425 York Rd., Parma, Ohio to: J&K Group, LLC, DBA: Outlet Store, 1412 West Ave., Elyria
REFERRED BY: Ohio Division of Liquor Control
Mrs. Mitchell asked where this business is on West Ave. and was informed by Chief Whitely that it is the old Frank’s Market at West Ave. and 15th Street.
Mitchell moved and Cerra seconded since there are no issues and the City does not request a hearing.
FINANCE PRESENT: Committee Chair Stewart, Members Tanner, Madison, Baird, Lotko
1. The matter of considering an Ohio Enterprise Zone Incentive on behalf of KE Elyria, proposed project for the former Macy’s Building. REFERRED BY: Mayor Brinda
Mayor Brinda said this is a request for Johnny K Sports of Cleveland. The request is for a 10 year 75% abatement based on anticipated 1 million eight hundred and seventy five thousand in building improvements. The total value of the incentive over 10 years is estimated at $383,213.44. Johnny K’s Power Sports will move from a 10,000 square foot building to the 103,000 square foot old Macy’s Building. The project investment for Elyria will be between $2,775,000 – $5,000,000. It will create 25 new jobs.
John Kalagerou of Johnny K’s Power Sports, 430 Youngstown/Warren Rd., Niles, Ohio.
Spoke to the committee and explained a little bit about his business. They currently have 4 locations in Ohio. The Elyria location will be the largest. The business launched in 2007 and have continued to grow since. Mr. Kalagerou showed some renderings of what they are proposing. There will be a garage area that will service items that are purchased there.
Johnny K’s is a destination store and many customers will come from all over. They also do community events at the facilities. And the space and parking area and being between the turnpike and I90 makes it easily accessible.
Mr. Kalagerou explained that the Elyria store will be there flagship store. The current headquarters is in Niles, Ohio. The opening date is scheduled for Spring 2018. The other Johnny K Power Sports Stores are located on Rt. 71, near the Lodi Outlet Stores, and 2 stores are located in Niles. The Brookpark store is currently leased and that facility will be closed when the Elyria store opens.
Mr. Lotko said he welcomes Johnny K’s and noticed the Lodi store while driving on State Route 71.
Mr. Madison asked if there were projections that will be outlined of what Elyria will plan to re-coup in terms of the income taxes?
Mayor Brinda said that anything taken in will be more than what is taken in now, since no revenue is being generated now. They have not done projections in terms of income tax, but, there will be additional revenue coming in. That inventory will bring in more dollars that some other kind of retail. Mr. Kalagerou said that there could be anywhere from $10 – $20 million dollars in annual revenue. Mr. Madison asked what the rationale for coming up with the 75% abatement? Mayor Brinda said the proposed business that Johnny K Sports is entertaining will be catalytic. The amount of the investment that they were able to do is dependant on the different financial pieces, which is what worked for their business model.
The City of Elyria is not the only one funding this process. Council is here to consider the Enterprise Zone Agreement this evening. All the pieces that have been put together are what is making this happen, it’s roughly a $3 – $5 million dollar investment in our community. The City has worked with the company regarding their financials and they are very solid. All of that went into the rationale. This property within Midway Mall requires some other investment other than the bank. The reason is because the property was sold under value. It was valued at $23 million and sold at $4.25 million. The devaluation influences the banks decision of how much of a loan they are willing to make. Without some public investments this would not happen.
That is why the state of Ohio created a Community Improvement Corporation for cities to have a method to step into these situations and provide GAP financing to prevent communities going into a downward spiral. We are very fortunate to have someone to come in at a very strategic time to be able to make this investment. We have a window of opportunity to either do something or do nothing. This project is unique and will draw people from the outside in and has the potential of being that catalyst. Mrs. Mitchell agrees with the Mayor. This could definitely could benefit the city.
Community Development Committee’s vote:
Cerra moved, Mitchell seconded to recommend an ordinance authorizing the Mayor to enter into an Enterprise Zone Agreement with KE Elyria Enterprise for exemption of real property taxes within the Elyria Enterprise Zone.
Finance Committee’s vote:
Lotko moved, Baird seconded to recommend an ordinance authorizing the Mayor to enter into an Enterprise Zone Agreement with KE Elyria Enterprise for exemption of real property taxes within the Elyria Enterprise Zone.
2. The matter of FY 2018 Community Development Block Grant Action Plan and Consolidated Plan Annual Update.
REFERRED BY: Community Development Director A. Scott
Mrs. Scott continued with the meeting and those meeting minutes were transcribed by Stenotype Reporter, Kathleen A. Hopkins and those minutes are attached herewith, made a part thereof and designated as Exhibit “A”.
(Mr. Madison wanted the record to show that he does not serve on any of the boards mentioned).
Community Development Committee’s vote:
Mitchell moved, Cerra seconded to recommend an ordinance to Adopt the FY 2018 Community Development Block Grant Plan and Annual Update
Finance Committee’s vote:
Lotko moved, Baird seconded to recommend an ordinance to Adopt the FY 2018 Community Development Block Grant Plan and Annual Update
Cerra moved, Jessie seconded to adjourn the Joint Community Development and Finance Committee Meeting at 6:50 P.M.
Colleen Rosado, Secretary