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Vermillion council approves developer agreement to allow downtown hookah and cigar lounge while deferring costly sprinkler tap
Summary
The council approved a developer agreement allowing a change of occupancy for a proposed hookah and cigar lounge at a downtown Main Street address; staff said code requires a sprinkler system because the assigned occupant load meets the threshold, but a costly street tap makes immediate compliance impractical and the agreement will bind the building and schedule infrastructure work in future CIP planning.
Vermillion’s City Council voted to accept a developer agreement that will allow a proposed hookah and cigar lounge to receive occupancy while the city and property owner plan a long-term solution for required sprinkler infrastructure.
Staff presented the change-of-use request for a downtown Main Street property and said the international existing building code and the International Building Code (2018) require buildings that change from merchandiselike uses to assembly uses — and that reach an assigned occupant load of 100 or more — to meet current code, including sprinkler systems. “The 100 is what drove what is driving this particular requirement,” the presenter said.
City staff described major infrastructure constraints at the street tap serving the building, saying that a straightforward street tap that would usually cost $5,000–$10,000 is not feasible at this location and that the needed tap could cost $50,000 or more. To avoid closing the business while the city plans a water-line extension, staff proposed a developer agreement requiring the owner to sign a document that would be filed with the county and that would bind the building. The developer agreement also includes requiring the building owner to bring the building up to applicable code where feasible and to install a 24-hour monitored, reportable alarm system as interim mitigation.
Chief and staff recommended a coordinated approach: include the needed water line in future capital improvement plans so the city can schedule construction work and offer businesses an opportunity to “stub in” service during planned street work to lower future costs. The fire department noted the back-alley run would be roughly 400 feet and that extensive utility coordination would be required because the alley contains fiber and natural gas lines.
Councilors asked whether adjacent buildings would be affected and whether the agreement follows the property. Staff said the developer agreement applies to the specific building and that it will be recorded with the county so the requirement follows the building if ownership changes. Staff also explained that whether the owner or tenant pays for the sprinkler system is a commercial arrangement between owner and occupant; staff gave an estimate of about $15,000 for the in-building sprinkler work and said the larger cost driver is the street tap to connect to the municipal water main.
Councilor Holland moved to accept the agreement and Councilor Genewine seconded. The motion carried on a voice vote.
The council’s action allows the proposed business to proceed under conditions in the developer agreement while the city plans a longer-term infrastructure fix. The city intends to notify nearby businesses in advance of any street or alley work and said it will provide options for inexpensive stub-ins when construction occurs.
