City staff previously began examining the possibility of adjusting the B‐2 Secondary and Highway Business District zoning requirements to allow tenants such as offices to occupy first-floor space there. The district, which covers the city limits along the interstate frontage road, currently allows for only majority-retail tenants in first-floor spaces.
During the Nov. 25 regular meeting, City Council directed staff to move forward on minor zoning changes while finalizing a Payment in Lieu of Taxes, or PILOT, program for nonretail tenants that would be used along with the new zoning regulations. Council initially considered setting a 90-day moratorium for development in the district while the zoning and PILOT details are finalized but decided against the commercial suspension during the meeting.
“Whether you choose to go moratorium or not, the proposal still is going to be that you change the B-2 to uses by right or restaurants and retail, everything else, hotels are special-use permit only, and nonretail uses must do the PILOT program,” City Attorney Chris Nichols said.
The city is considering the PILOT program to allow new uses in the B-2 area without sacrificing the ability to bring in revenue from tenants. The PILOT program will allow the city to collect revenue from tenants that do not generate sales tax while simultaneously filling vacancies in the city’s primary commercial area with new businesses.
“It’ll be just like an SUP basically, but we’re not rezoning that piece. We’re not carving it out, we’re just saying, ‘Here’s your development agreement,’” interim City Manager Heather Neeley said. “I think it’s going to be something that really helps our revenue and helps our residents without hurting our businesses.”
The zoning changes are expected to be finalized later this year. The city will then establish a PILOT agreement with the first nonretail tenant to occupy a space in the B-2 zone, which will serve as a template for future businesses in the district, officials said.