Council approves consolidated development agreement for ‘Project Rally’ campus, including new incentives

The Johnston City Council on Monday approved Resolution 25-106 authorizing a consolidated development agreement with Ignite Johnston LLC that replaces three prior agreements and sets a schedule, incentives and public-improvement commitments for a multi-building sports and entertainment campus known in part as Project Rally.

Planner Josh summarized the agreement as “essentially a rewrite of 3 different agreements” and outlined key deadlines the developer agreed to if the council approved the new agreement: proof of financing or an executed term sheet within about 60 days, submission of final plats and site plans and steel-order shop drawings within roughly 120 days, and a goal to begin construction by Sept. 30 of the current year with full completion of minimum improvements by Sept. 30, 2027. The developer would be responsible for multiple private buildings — including a 30,000-square-foot two-story commercial building conceived for brewery, health-clinic or other complementary tenants — and an additional supplemental 12,000-square-foot two-story commercial building at the former quick-lube site on Merle Hay Road.

Developer representatives Chad O’Meara and Brian O’Meara told the council they had an active financial term sheet (the team said a term sheet had been in place since November) and described prior work and spending on the site. Chad said the project “has had an active financial term sheet since November” and described over $20 million already invested on the site, including foundations and utilities.

Josh told the council the city has already provided performance-based predevelopment financial incentives totaling $3,308,130 in cash, plus a previously issued forgivable loan and demolition grant; when recategorized in the consolidated agreement the previously issued incentives total $3,527,361. The new agreement proposes a tax-increment-financing (TIF) incentive structure of a 95 percent TIF rebate for 10 years capped at $14,200,000, with an annual deduction of $59,357 from increment for public improvements already incurred or to be incurred in the future. The agreement also restates a $60,000,000 minimum-assessed-value target for the minimum required improvements, a figure the staff and the developer said was developed with the county assessor’s office.

Council members pressed for specifics on costs the city has already incurred for site work and Pitch Parkway; staff gave a rough estimate that city costs for the Pitch Parkway portion were about $2.2 million and noted other engineering and permitting expenses not included in earlier tallies. Council members repeatedly asked for the developer to confirm financing milestones; developer representatives said they were confident and that their lenders had vetted term sheets with board review and internal options.

The agreement also carries a five-year utilization-payment arrangement that the city and developer previously negotiated: a guaranteed payment of $360,000 per year for the first five-year term in exchange for a specified number of hours the city may use rentable spaces in the facility (the agreement notes defined “peak” and “non-peak” hours and guarantees 144 peak and 144 non-peak rentable hours annually). Staff said the utilization agreement remains a guaranteed, performance-based payment structure with optional extensions but no obligation beyond the agreed term.

After questions from council members and developer remarks, the council closed the public hearing and voted to approve Resolution 25-106. Council members emphasized the 60-day financing milestone as an early “hurdle” to watch and asked staff to bring back detailed accounting of city-incurred costs on the project when available.