Council weighs MED agreements for destination amenities; approves one with caveat and tables the other

Midlothian Economic Development (MED) staff presented two performance agreements proposing to use future sales-tax collections from planned retail developments to fund enhanced public-facing amenities and a maintenance escrow. The overall structure: (1) MED and the developer fund due diligence to create final construction drawings, (2) MED reviews and approves a final concept, (3) payments (capped annually and over up to 10 years) are triggered by buildings commencing construction; developers would also fund a maintenance escrow.

For the Main Street Town Crossing Phase 2 project, staff proposed $350,000 for due diligence, an initial maintenance allocation of $1,000,000, and an annual participation estimate (examples in staff material ranged by building type). MED staff emphasized that payments are tied to built and permitted improvements, not to specific named tenants.

Council raised governance and oversight questions: several members expressed concern that MED (a seven-member board) could approve final concepts without explicit council sign-off and requested that final concept approval be brought to council. One agreement was approved with the caveat that the final concept return to council; another agreement was tabled indefinitely pending legal review and further staff coordination. The council later sent one item to executive session for legal consultation and voted to table the other item 6-0.

Council emphasized accountability measures will be needed before large disbursements advance and directed MED and staff to coordinate with legal and PNC about the appropriate approval path.