After spending $185,000 in tax dollars to buy and demolish two homes near downtown Greenwood, a city board is considering selling the land for one-fifth of that amount.
The mayor and some members of a city board say the lower price is acceptable because helping a local business expand at the intersection of Main and Meridian streets will lead to more economic development in downtown Greenwood. But at least two board members are concerned that the city is not getting a fair return on its investment.
The debate is over a plan to accept proposals for the sale of about a third of an acre of land that the Greenwood Redevelopment Commission purchased at Main and Meridian streets.
Last year, the redevelopment commission spent $163,500 to purchase houses at 1 and 21 E. Main St. — a price that was about $15,000 higher than the average appraised values of the properties. The city then spent $22,000 to demolish the homes. The initial intention was to use the land to add a turn lane to the intersection, widen sidewalks along Meridian and Main streets, and build a public parking lot.
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After the city began negotiations to purchase the properties, John Cassin, who owns Mrs. Curl Ice Cream Shop, proposed using the land for an ice cream shop with indoor seating to have room for more customers and be open year-round. The new location would be just north of where Mrs. Curl opened more than half-century ago on Meridian Street.
One of the homes, 21 E. Main St., was purchased by the city from Scott Cassin, who is the son of John Cassin. The money from that sale went directly to his son, who was renting out the home on the property, John Cassin said.
The city agreed to John Cassin’s proposal, because helping the popular well-established business expand will lead to further investment in downtown Greenwood, Mayor Mark Myers said. The turn lane and sidewalk widening still are being done, but the proposed parking lot will instead be the new location for Mrs. Curl.
“Mrs. Curl has been a staple in downtown Greenwood,” he said. “This will make it a better facility to bring more economic development and value into the downtown area.”
The concern now is whether the city board should be selling the property for significantly less than what was invested in it. Redevelopment commission members Chuck Landon and Mike Campbell voted against requesting bids for the property, citing concerns about the potential sale price. The city board is asking for proposals for the land specifically as an ice cream shop or similar development and is asking for a bid at or above the appraised value.
After getting the land rezoned for commercial use earlier this summer, the redevelopment commission had the properties re-appraised, which came out to a total $35,000. That amount is the minimum the redevelopment commission could sell the property for, city attorney Krista Taggart said. The city will request project proposals for the property, and can pick whichever one best suits its long term goals for the area, she said.
While the appraisal is far lower than what the city initially paid, it makes sense, Myers said. The higher appraisal came from the two houses on the land. Without any buildings on the property, its value is significantly less, he said.
A developer isn’t likely to offer significantly more money than what the property has been appraised at, Myers said.
The goal now is to recover the city’s investment through future property taxes, rather than have Cassin or another developer directly reimburse the city for the $185,000 it spent on the land, he said.
The redevelopment commission approved requesting proposals from developers specifically for an ice cream parlor or similar development, a request tailored for a Mrs. Curl expansion, redevelopment commission president Brent Tilson said. While other developers would also be able to make bids to purchase the property, no one other than Cassin has expressed interest so far, he said.
Cassin said he will place a bid to purchase the land, and that he has his finances and construction plans prepared so that he can make an offer, but said he hasn’t determined the amount. If possible, he’d like to begin construction later this fall.
If the city does sell the property for the appraised price, it will effectively be providing a $150,000 financial incentive to Cassin to expand his business, Landon said.
“I don’t think the taxpayers of Greenwood should be subsidizing a business like this,” he said.
While the redevelopment commission often approves tax breaks or other financial incentives to businesses, that funding is typically either given out to a business that is moving into Greenwood and adding jobs or a new business that is just starting, not one that is already established in the city, Landon said.
Providing this financial incentive to Mrs. Curl is appropriate, Myers said.
“It’s giving what is a very stable business in downtown Greenwood a better location,” he said.
The tax dollars generated from the new Mrs. Curl, which Cassin plans to spend $500,000 to build, will allow the city to more than recover its investment, Myers said. Getting a quality building at that intersection will help encourage other development in the area as well, he said.
Landon said he was shocked at how low the appraisal was, and said the city would be better off leasing the property, rather than selling it.
Leasing the property, however, would make it much more difficult for a project to get financing, as banks typically would want the land and building as collateral for a loan, Taggart said.
Being able to buy the properties at a lower price has helped make the project financially feasible, Cassin said.
The expansion is needed, as long lines deter some customers from visiting the ice cream shop, Cassin said.
“People don’t mind waiting, but so many say, ‘We drove by there the other day, and the line was too long,'” he said. “Hopefully, the new store will help that situation.”
The redevelopment commission will open the proposals at its September meeting and will likely wait to vote on whether to accept any of them at a later date, Taggart said.