The Normal Town Council has approved a development agreement with an Uptown business to create a two-story brewpub and rooftop dining establishment using the old Bill's Key and Lock shop property.
The Fiala Brothers (Ryan and Steve) also own the adjoining D.P. Dough. They could receive up to $150,000 in sales and food and beverage tax rebates (1% sales and 2% food and beverage) over a decade. The new establishment would have to generate sales of more than $150,000 to begin receiving the rebates and sell more than $5.1 million over 10 years to maximize the incentive.
In return for the chance to have that reimbursement, the Fiala brothers are promising to put $1.6 million into the structure, install an elevator, put a second story on the building, and create a rooftop terrace.
The vote was 5-2 with council members Stan Nord and Karyn Smith against the agreement.
"My recommendation is that the town should not be involved in business decisions. We should only be involved in new job creation and bringing business into the community from outside," said Nord.
Council member Kathleen Lorenz said the new business will employ new people and allow the local owners a chance to grow their living.
"I don’t see the net gain from taxpayers' investment," said Nord.
Nord said he believes helping a restaurant simply redistributes existing revenue and does not create additional economic activity.
Town staff noted food and beverage revenues have consistently grown over the last decade at a rate of 1.9% to 2.75% per year, the only revenue sector to have uninterrupted growth. Mayor Chris Koos said the location of the business near Illinois State University will allow parents and other visitors more choice and attract dollars from outside the community as those who stay in Uptown hotels look for a place to eat.
"If it makes business sense for them to do it then it should make business sense for them to do it without incentives," objected council member Karyn Smith
City Manager Pam Reece said the incentive package is also intended to shape the kind of improvement and investment the Fiala brothers are making.
"Without this, the building could potentially stay a one-story building. It wouldn't then have the same opportunity to generate the kind of sales tax revenue that we are talking about with a two-story building," said Reece.
Normal Assistant City Manager Eric Hanson noted having two stories and an elevator substantially boosts the value of the building and the accompanying property taxes for several decades, longer than the incentives could remain active.
Council member Kevin McCarthy said there is no downside for the town because the business bears all the risk.
"No success, no revenue, no rebate. This is not on existing revenues. This is only on the new revenues that this business would theoretically generate," said McCarthy.
"It is really not much for us to make this investment. We are not giving away a check. We are not giving away money. These are dollars that are not being produced at this time," said council member Chemberly Cummings.
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