East Ridge approves development agreement for Scooter's Coffee at 1491 Mac Smith Road

The East Ridge City Council unanimously approved a development agreement on April 9 with Art Holdings Tennessee LLC for property at 1491 Mac Smith Road, the site of a proposed Scooter's Coffee and ancillary retail.

Staff and the city attorney described the agreement as a border-region development that uses state sales-tax returns under the border-region program to reimburse development activity. The recommended deal uses an 80/20 split in favor of the developer for the district's initial payback period. Staff noted that if the district payback period were extended beyond the currently set expiration year (2047), the split would automatically revert to 50/50 under section 5.19 of the agreement.

Staff provided financial context: projected border-region revenue from the site is roughly $3.3 million, of which the developer's allocation under an 80% share would be about $2.6 million. The developer told the IDB and staff that total project costs are in the range of $4.5 million to just under $5 million; the IDB had approved the proposed agreement unanimously prior to council consideration.

Council members confirmed that the revenue return under the border-region arrangement is generated from state sales tax and not from the city's general fund or property taxes. After brief discussion, Council Member Witt moved to approve the resolution authorizing the city to enter the development agreement; Vice Mayor Tyler seconded and the council voted unanimously to approve Res. 3808.

Staff said the agreement is consistent with prior border-region deals the city has approved and will proceed with the administrative steps required to finalize the contract with the developer.