Restaurant/Propane deal

Friday, June 15, 2007

By Clint Confehr

Senior Staff Writer

Lewisburg's City Council has agreed to meet next week on whether to grant a property tax break for a proposed restaurant through a program that's never been used for a restaurant here.

An Arby's roast beef fast food restaurant has been proposed for the property on North Ellington Parkway where a Long John Silvers' seafood restaurant remains closed, City Manager Eddie Fuller said.

When asked whether property tax relief should be granted for a fast food restaurant, the city manager said there is a public demand issue to be addressed.

"One of the biggest criticisms we get is that there is no place to go to eat in Lewisburg," Fuller said. "I know Arby's is not Applebees, but if we get and Arby's, we can point to that to get an Applebees, and I'm just using those names as an example.

"It might be an O'Charley's or a Ruby Tuesday's," he said.

Deed restrictions prevent converting the old Long John's into a Capt. D's restaurant because both specialize in seafood, but a beef sandwich restaurant is a suitable successor, Fuller said.

Council members are to meet at 3:50 p.m. on Tuesday to consider a recommendation from the Industrial Development Board for a PILOT (Payment In Lieu Of Taxes) Plan for development of an Arby's restaurant on the property near the McDonald's restaurant.

A PILOT Program excuses regular property tax payments for a contracted period of time. In lieu of tax payments start at a low rate, or zero and increase according to an agreed schedule.

In the deal recommended by the Industrial Development Board, the owners of the proposed Arby's restaurant would increase their payments to the city and county by a fifth every year in a five-year contract. The whole tax bill would be paid annually thereafter.

"There are requirements" to qualify for the PILOT program, Fuller said.

A purchase of land and buildings valued at $650,000 or more is required, and at least $50,000 must be spent on equipment, he said.

"And you've got to create 20 new jobs," Fuller said.

City Economic Development Director Terry Wallace agreed that "recognizing a service industry for jobs" has not been done here before, but the development board sent a recommendation to the council.

That recommendation was received on Tuesday when, in another business development move, the council voted to lease land for a propane business.

Spar-Gas officials want to lease an acre the city bought seven years ago near where Spring Place Road crosses a CSX railroad spur. Propane would be moved from a tank on a railroad car and kept available for sale here, city officials said.

"They'll be opening a retail store where you can exchange tanks for your grill and they'll deliver propane to folks who use propane for heat," Wallace said.

Rent was proposed at $1,000 a month for 36 months. The proposed lease has an option to buy the land. Urban Development Action Grant funds were spent to buy the land. Money received from the property goes back to that city fund for reuse to improve the local economy.

Wallace and Fuller said Spar-Gas will probably employ 4-5 people; some as retail sales staffers, some as delivery truck drivers.

The 1.88-acre tract was purchased from Robert Tucker for $65,000, city records show.

Leasing about half the tract for $1,000 per month seemed low, Councilwoman Quinn Brandon said.

Mayor Bob Phillips responded by asking if Brandon had seen the land, which he described as "low," adding that there was still time to negotiate the price. Permission to lease the land was what was sought when the council met on Tuesday, the mayor said.

Wallace said the deal depends on another agreement with CSX Railroad.

The council's vote to proceed was unanimous.