Sterling council OKs incentives for 2 downtown redevelopment projects

The Sterling City Council unanimously approved a redevelopment agreement Monday, July 21, that will reimburse a portion of the cost to rehabilitate two buildings in Sterling.

M5 Property Holdings LLC purchased the former Starlight’s Theatre & Lounge at 314 First Ave. last year with plans to transform it into the Spark Center for the Performing Arts, led by The Dixon: Historic Theatre‘s former executive director, Darren Mangler, and M5’s Darcie McGowan.

M5 owner Rocky McGowan also purchased the former Amcore Bank at 302 First Ave. and plans to open the first of seven floors in September as rentable office spaces, with the remaining floors to open in the future. So far, M5 has made about a $6 million investment in the buildings.

As part of the new redevelopment agreement, the city will reimburse M5 up to $958,000 for eligible redevelopment costs tied to the project through its previously established Tax Increment Finance district.

The Central Business District East TIF collects funds from property taxes exceeding the base level established in 2016. As property values increase due to property improvements within the TIF district, the additional tax revenue is collected into the associated TIF fund.

The city will reimburse M5 once a year, solely from 90% of the increased property tax revenue, known as “incremental taxes,” generated by improvements to the sites, not from the city’s general budget. The city keeps the other 10% for uses approved within the TIF Act, and if the tax revenues from the project fall short, the city is not responsible for covering the reimbursement difference.

City Manager Scott Shumard said the Central Business District East TIF has another 10 years before it expires.

The theater has three levels and will open after the stage is built, new lights and a sound system are installed and the roof is replaced, along with some other cosmetic changes. When the work is finished, the theater will include a VIP lounge, table seating and a full dance floor. The City Council also approved the Spark Center’s liquor license Monday, providing guests access to a bar inside the theater during events.

“I want to thank you guys for taking over that building. I can’t wait to see what you’re going to do with it,” 1st Ward Alderwoman Retha Elston said. “I’m so excited. From what I heard listening to your plans, it’s going to be awesome.”