The Mesquite City Council meeting, Tuesday, April 12 was all about economic issues and unanimous votes.
Referring to a report given to the councilors a year ago from the Economic Development Incentives Committee, a special fund was created to accept 25 percent of all city-owned land sale proceeds in the future. The committee had recommended the fund as a way to help pay for future economic development activities.
The remaining 75 percent of land sale proceeds will go into the city’s general fund.
In response to a question from Councilman Rich Green, Aaron Baker, City Liaison Officer said any use of the funds will be reviewed and approved by the council and not city staff members. He also reminded the council that guidelines are being developed governing the usage of the funds and will be brought to the council at a later date as a city code amendment.
Without dissent, the council approved the fund and immediately deposited $159,000 into it from the approval of a land sale with 333 Eagles Landing LLC for 105 acres at the I-15 Exit 118 interchange now under construction.
When that issue came up, Councilman George Rapson recused himself from the agenda item saying he had had an ethics complaint filed against him for his earlier participation in selecting the winning bidder for the land purchase.
Rapson said the city attorney and the insurance attorney did not believe there was any merit to the complaint “but in an abundance of caution and to prevent any expense to the city, I recuse myself.”
Councilman Geno Withelder also recused himself from voting on the contract as he had done in the past. Withelder is a broker with the real estate company that is handling the purchase side of the deal for Eagles Landing.
That left three councilors to vote on the issue: Green, Councilwoman Cindi Delaney and Councilman Kraig Hafen.
The city will receive $644,000 in cash at the sale closing. Deeds for various parcels of land included in the sale will also be deposited in an escrow account. Baker said that having the deeds in escrow will allow the city to immediately take control of the land and “not have to chase people down to get the land back” if necessary.
Baker referred to two economic development incentives in the contract that give the purchaser up to a 60 percent discount on the total purchase price of $1.6 million. That includes a capital investment incentive of $483,000 and a job creation incentive worth the same amount.
The incentives are tiered based on performance thresholds Eagles Landing must meet in the next three years. Should the purchaser not meet the incentive thresholds the city will be able to “claw back” various acreage included in the parcel sale.
The purchaser must also hire an independent third-party who will conduct a certified review to determine whether the buyer fully qualifies for the incentives. The buyer pays for the review. “We’re not just going to take their word that they met the incentive guidelines,” Baker said.
He also pointed out a change in the contract that allows the city to immediately take control of the upfront cash instead of waiting until the end of the three-year performance clause.
Delaney verified with Baker that regardless of the buyer’s performance requirements the city will keep the cash and could also take back parceled acreage should the incentive thresholds not be met.
Hafen questioned Baker about the five percent real estate commission the city is required to pay. “Does that go to the real estate agent directly or does it go to the broker,” Hafen asked. Barry Clarkson, attorney for Eagles Landing, said the money goes to the broker according to state law. The commission of $32,000 in this case is based on the cash price not the total price of the contract.
The sale was approved on a 3-0 vote.
In an earlier Redevelopment Agency meeting, the councilors approved a request for $60,000 from the Greater Mesquite Arts Foundation that will be used to improve lighting systems in the Mesquite Community Theatre.