Sidetrack Bar and Grill seeking 12-year tax abatement for $1.5 million expansion project
The Sidetrack Bar and Grill $1.5 million expansion project will create new jobs, apartments and more space.
Ypsilanti's Sidetrack Bar and Grill's $1.5 million expansion project is under way and the City Council will consider approving a tax abatement to freeze the property's taxable value for 12 years.
Sidetrack Bar and Grill and Frenchies owner Linda French purchased 52 E. Cross St., the former Bird Brain, in June for $350,000 from King C & C, LLC to add to her existing 10,000-square-foot building.
French has been working out plans for the renovation of the existing upper stories of 54 & 56 E. Cross, which are undeveloped and vacant, as well as expansion of the Sidetrack restaurant into the first floor space of 52 E. Cross.
French is requesting an Obsolete Property Rehabilitation Act exemption for 12 years. The OPRA would effectively freeze the value of the improvements on the combined property at the 2013 taxable value for improvements, which are approximately $251,253. Investment and improvements to the properties would not be taxed during the lifetime of the abatement.
The Ypsilanti City Council will consider approving the application at its Tuesday, Jan. 22 meeting. If granted approval, the application would then go to the state for consideration. Then it could take the state up to six months to make a decision.
In French's application for the OPRA grant, she stated a 12-year exemption is imperative to the fiscal viability of the project.
"Without the tax postponement afforded by the OPRA grant, Sidetrack would not have sufficient operating income to cover the increase in both real estate taxes and operating expenses," French wrote.
In the application, French said the grant would allow Sidetrack to have its mortgage debt paid off by 2024, making available the additional cash flow needed to cover the increase in property taxes once the grant exemption has ended.
The renovation and expansion project will see work on the ground floor of 52 E. Cross, with the construction of a modern kitchen, barrier-free bathrooms, an elevator, and additional seating.
Work proposed for the second floor of 54 and 56 E. Cross will include a reception space as well as additional bathrooms. The restaurant expansion and development of banquet facilities is expected to be the first phase of redevelopment.
The second phase will include up to four residential units in the third floor of 54 and 56 E. Cross, although two 2-bedroom units may also be considered. Existing office space on the second floor of 52 E Cross will serve as Sidetrack offices.
French previously told AnnArbor.com that the apartments will likely be marketed toward young professionals.
The entire project is scheduled for completion in 2016 and the total investment for the project is expected to be approximately $1.5 million. French is estimating that within 24 months, 40 jobs will be created.
Katrease Stafford covers Ypsilanti for AnnArbor.com.Reach her at katreasestafford@annarbor.com or 734-623-2548 and follow her on twitter.
Comments
ypsi 1
Tue, Jan 22, 2013 : 6:01 p.m.
Its remarkable how little most people know about taxes and abatements, as I can see from comments here. The property pays 251K as it is now. They will continue to pay 251K fr the next 12 years if council does not approve, but French will not grow, develop, or employ more people. If the OPRA abatement is approved she will continue to pay 251K over the next 12 years but will not have her taxes increased because of the improvements she makes and additional taxable value (until the 12 years is up when it goes up to the new value). Get it now? The city and schools get the same as they have, but everyone gets more in the future and more jobs now.
nonyo
Tue, Jan 22, 2013 : 3 a.m.
I thought Snyder's biz friendly tax laws made this sort of thing unnecessary? Let's see, Ypsi is barely getting by, but the Sidetrack is a local institution that does bring folks to Depot Town. How about 3 years abatement? I'm sure the French family will make do.
734baggins
Tue, Jan 22, 2013 : 12:41 a.m.
If she gets this, I hope she goes back to lemonade that's not watered down. Ah...the good old days.
ms 2013
Mon, Jan 21, 2013 : 7:50 p.m.
good for them
Ken
Mon, Jan 21, 2013 : 6:57 p.m.
So the Sidetrack Bar and Grill is seeking a 12-year tax abatement, otherwise known as corporate welfare. At least Sidetrack could give Ypsi homeowners a free hamburger to make it more palatable.
Ron
Mon, Jan 21, 2013 : 6:26 p.m.
Sure give them the tax abatement, but tell them they have to provide enough funds to the Fire Department to bring it back up to where is was 5 years ago. If they disagree with that then raise their taxes like you do everybody else. Yep I am hell bent on getting our Fire Department back to a safe staffing level so we don't have to call a box alarm ( mutual aid ) for just about every fire we have in the city. And just out of curiosity, how much money does EMU give to the city for fire protection or medical calls that they have to cover? EMU has their own police force, why not buy your own fire trucks and have your own first responders so our already short staffed department can take care of the citizens. What ever borders the EMU police havem give their fire department the same boundaries and maybe cross train the police as EMT's to be first responders until HVA can get there and leave our 1 truck open for us.
ypsi 1
Tue, Jan 22, 2013 : 6:13 p.m.
EMU pays nothing. They don't have to. State laws do not require them to. The rest of this is not well thought out. Fire departments don't refuse to come when needed; they have more class and dedication than that. U-M gave Ann Arbor FD a new truck but I doubt EMU has that kind of cash to give.
Peter Baker
Mon, Jan 21, 2013 : 3:09 p.m.
Why aren't taxes considered part of the "cost of doing business"? I'd like to request a 12-year abatement on my office's internet service charges, but that ain't going to happen. Surely the things that a business' taxes go towards are just as important.
Nicholas Urfe
Mon, Jan 21, 2013 : 5:19 p.m.
Exactly, Peter! I pay huge taxes, and it is a part of my business planning. Some of my competitors do work under the table, for cash. I won't, no matter how much it hurts. I could make all sorts of song and dance about how my numbers won't jive if I must pay taxes, but that's all just a bunch of BS. The real deal is "I won't make as much profit if I must pay my share of taxes."
Arno B
Mon, Jan 21, 2013 : 2:52 p.m.
I'd say NO. "Tax abatement" is just another scheme to silently get one group of taxpayers to subsidize another. No one talks about the effect on the competition which continues to have to pay their taxes at a stndard rate. The Sidetrack is a successful operation - or at least it appears to be. I've eaten there several times and wish them luck. However I don't know why they should get a subsidy from the hard working (i.e., taxpaying) folks in Ypsi The same "tax increment financing" voodoo has been granted to another highly successful facility in Ann Arbor recently: The NuStep facility on State St. NuStep wanted to expand their factory (I'd say "Go Ahead" - you have a very successful product with Mr. Sarns at it's helm). So now the humble taxpayers on that area of State St. (I don't know if it is categorized as being in Pittsfield or Saline) are having their pockets picked to benefit Mr. Sarns. Only in America!! Another equally bad rip-off exists in the "Remediation" financing promulgated by not only the cities but Lansing as well. Here, the municpalities (with Lansing) help pay the cost of "Remediation". Remediation cleans up the contamination left by prior occupants of the property (for example, the old Kroger property around Packard and Eisenhower). The developer has a grandiose scheme to build a residential plus commercial center (wish him luck!). However, itr should be the developer who pays for the necessary "Remediation." Since he either doesn't want to or doesn't have the money means that he paid too much for the place. If he didn't realize that "Remediation" was necessary one should question his financial acumen.
Nicholas Urfe
Mon, Jan 21, 2013 : 2:21 p.m.
I say NO to the tax abatement. I love the Sidetrack, and it is one of the few reasons I will travel to Ypsi. The business is thriving. They are expanding to Make More Money - no other reason. They need to pay their share.
Nicholas Urfe
Mon, Jan 21, 2013 : 2:15 p.m.
I hope the Sidetrack has _really_ thought this expansion through, and that it will go well. But many great businesses, that have thrived for decades, have faltered and even gone out of business after major expansions. In one case I know, the father begged the son not to expand the business after he took it over. It failed. Gone. As someone who loves the Sidetrack, I see absolutely no upside to this expansion. The beer, food, atmosphere, patron mix, service, prices... None of those can materially improve from where it is today. However, an expansion is rife with potential downside. And every single thing we love about Sidetrack is potentially negatively affected. "We'll make it bigger, and we'll make more money!" almost never works out for the patrons.
Max
Mon, Jan 21, 2013 : 10:48 p.m.
It worked well for Aubree's across the street.
Greggy_D
Mon, Jan 21, 2013 : 2:01 p.m.
"Without the tax postponement afforded by the OPRA grant, Sidetrack would not have sufficient operating income to cover the increase in both real estate taxes and operating expenses," French wrote. Then don't expand if the business cannot afford it!
Linda Peck
Mon, Jan 21, 2013 : 1:58 p.m.
Nobody's offering to abate my taxes. Sidetrack is a business, and a successful one. It should be able to pay taxes on their own. Ypsilanti needs business to pay their taxes.
ahi
Mon, Jan 21, 2013 : 1:44 p.m.
They already started the project. Clearly a tax abatement is not necessary to make it work. In Ypsi, the bigger you are and the more resources you have the less taxes you pay. It needs to stop.
glimmertwin
Mon, Jan 21, 2013 : 1:03 p.m.
If the owners are legally in the right to request and receive the abatement, great. But this is just another example of how messed up the entire taxation system is in the country - at all levels.
Ignatz
Mon, Jan 21, 2013 : 12:44 p.m.
Shouldn't an increase in taxes be figured into a business plan for expansion?
PC Stone
Mon, Jan 21, 2013 : 11:53 a.m.
Sounds like they are still paying taxes and even paying taxes from the new property. They just want to freeze the amount they pay for the next twelve years. Easier for them in regards to calculating expense, better for their business, and in return the public has a high degree of likelihood taxes will be paid. I don't see an issue.
Max
Mon, Jan 21, 2013 : 10:47 p.m.
Bob, my property taxes have also gone down in the last few years. Sidetrack will not get that benefit.
Bob W
Mon, Jan 21, 2013 : 12:07 p.m.
Have your prop taxes increased in the past 12 years? Ours have. If I were still paying my taxes at the rate they were 12 years ago the city would be out the difference.
dconkey
Mon, Jan 21, 2013 : 11:47 a.m.
I might consider it if they were to keep their prices the same for the next twelve years.
Katrease Stafford
Mon, Jan 21, 2013 : 3:08 p.m.
In the initial article I wrote, owner Linda French told me she has no plans to increase prices, but she did not specify a specific time frame for which prices will be kept the same.
cinnabar7071
Mon, Jan 21, 2013 : 11:32 a.m.
So they want the public to pay for their business? Doesn't seem right to me. Do we eat free for the next 12 years or do they just get richer? I want a abatement on my property taxes the next 12 years too.
Max
Mon, Jan 21, 2013 : 10:46 p.m.
They will not stop paying taxes. They will pay the taxes on the property as it exists right now. The tax revenues that the City gets now will not be affected. This will hold their taxes steady for 12 years. When they remodel the taxable value will go up and in 12 years they will pay taxes on the full value. So option A, is to keep getting the same taxes on this place for ever because they do not remodel. Option B is to keep getting the same taxes on this place for 12 years and then an increase to the taxes because they have remodeled. I choose B.
lancelot
Mon, Jan 21, 2013 : 11:16 a.m.
For a successful restaurant? Everyone wants a free lunch I guess
Bob W
Mon, Jan 21, 2013 : 11:09 a.m.
I hope they do their homework on approving this abatement. I read an article recently (not sure of the publication) where such tax deals to attract businesses do not pan out.
Roger Dodger
Tue, Jan 22, 2013 : 2:58 a.m.
Seriously. The Frenches are in for the long haul. They deserve our support.
PattyinYpsi
Mon, Jan 21, 2013 : 1:43 p.m.
Sidetrack is already here. It doesn't need to be attracted.