Agenda Date: 11/10/2026
Subject:
Title
Economic Partnership Incentive Agreement Discussion for Chachi’s Italian-American
Body
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From: |
James L. Becklenberg, City Manager |
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Prepared by: |
Rachel King, Economic Development Director |
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Jamie Ney, Senior Economic Development Specialist |
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Presentations: |
Rachel King, Economic Development Director |
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Jamie Ney, Senior Economic Development Specialist |
PURPOSE:
To discuss a request for an economic partnership incentive agreement (“Agreement”) with Chachi’s Italian-American, LLC (“Applicant”/“Chachi’s”), an Italian-American steakhouse restaurant proposed in the downtown area located at 2589 W. Main Street.
LONG-TERM OUTCOME(S) SERVED:
Vibrant Community with Rich Culture; Robust and Resilient Economy
DISCUSSION:
Downtown Littleton is a highly visible and trafficked area in the city. Property activation is an important component in attracting and maintaining visitors in Littleton. 2589 W. Main Street, located on the corner of Main Street and Curtice Street, has been vacant for multiple years. It has seen interest from a variety of businesses throughout these years, some generating minimal to no sales tax, and was recently purchased by a building ownership group in January.
The size and layout of this building present barriers in leasing the space to a small, independently owned retailer or restaurant, as these businesses often seek smaller footprints to minimize overhead costs and manage upfront investment. This creates a limited pool of potential tenants willing and able to fill the space.
Chachi’s intends to occupy 6,140 square feet of this prominent building on Historic Main with an Italian-American steakhouse concept. This concept will comprise of approximately 235 seats with opportunity to add additional seating upstairs. The large format space on the second floor provides flexible dining and event space. This flexible space diversifies the business’ operating and revenue model to reduce volatility in the off-peak periods.
The restaurant will be open seven days a week, generating additional activity on this notable corner. The Applicant anticipates creating approximately 50 full and part-time jobs with wages positioned at or above industry standard and opportunities for career advancement training.
The building will require significant investment in preparation for the anticipated February opening date. Chachi’s estimates a total capital investment of $2.8M to return this vacant building to an operating establishment. This concept assumes a relatively high investment in relation to the building size as it will require higher-quality finishes, furnishings, lighting, and interior design elements to align with industry expectations and the intended customer experience.
Throughout the various stages of planning, the Applicant has seen an increase in estimated costs in areas including but not limited to construction, equipment, staffing, and financing. Due to the current economic conditions, the Applicant has seen some expenses increase by as much as 30%. Rising costs place additional pressure on the project’s capital needs and expose the Applicant to additional risk during the early years of operation.
In addition to these challenges, the Applicant anticipates encountering more hardships in the first full year of operating as construction begins on Main Street.
Economic Partnership Incentive Key Points
The Applicant has requested financial support in the form of a sales tax share-back to help offset the increased financial burden during the restaurant’s initial operating years and strengthen their ability to complete the project.
Proposed deal points are as follows:
1. 50% Sales Tax Rebate
2. City will receive 100% use and property tax as scheduled
3. Cap: Maximum rebate of $350,000
4. Term: The maximum length is 5 years.
a. The term will expire with either the maximum rebate or the 5-year term, whichever occurs first.
BACKGROUND:
Eric and Rachel Hyatt are the current owners and operators of Grande Station, located on the corner of Main Street and Sycamore Street. They have spent their careers developing industry skills and expertise. In the first full year of ownership of Grande Station, the Hyatt’s were able to increase revenue by 58%. Rachel and Eric have seen much success in the hospitality industry and hope to continue to build on that success with a new concept in Littleton.
Over the past three years, they have invested a great amount of time and energy in the vitalization of Littleton. The Hyatts have been active participants in the business community and intend to continue to support city goals with this new investment.
Economic Development staff received an application from Chachi’s requesting a financial partnership aligned with the city’s Economic Development Incentive Policy (“Policy”). Chachi’s is a small business created to fill a gap between traditional Italian-American dining and contemporary American steakhouse culture.
The proposed location will fill a vacant property in the heart of Downtown Littleton. 2589 W Main Street was previously occupied by the Tavern, an American sports bar concept, operated by Tavern Hospitality Group. The hospitality group owned seven Tavern locations throughout the Denver Metro area. Each of these locations has since permanently closed. The Littleton location closed in February 2024 and was listed for sale shortly after. This building went under contract multiple times until it was finally purchased by Main Street Partners 1 LLC in January 2026. After years of neglect, this building will require an extensive amount of investment to repair and revitalize the premises.
2589 W Main Street has been a notable vacancy along Main Street. Regular visitors, community members, and business owners have voiced the desire to see this space filled in order to maintain commercial activity throughout Main Street and avoid blight in a highly visible area.
The request complies with multiple policies including the Economic Partnership Incentive Policy, Comprehensive Economic Development Strategic Plan, Envision Littleton Comprehensive Plan, and Horizon 2027 Strategic Plan. As a result, city staff strongly supports this request.
Prior Actions or Discussions
Resolution 61-2026: Approving an amendment to the Economic Partnership Incentive Policy.
Updates to the Policy were discussed in depth at the September 8, 2026, City Council study session and adopted on September 15, 2026. During the study session, staff heard Economic Development initiatives remain a key component of City Council’s strategic plan and initiatives. City Council has also voiced a desire to financially support small businesses in Littleton needing assistance.
FISCAL IMPACTS:
The incentive would generate no cost to the City. Chachi’s is anticipated to generate sales tax revenues ranging from $179,000 in Year 1 to $208,000 in Year 5, prior to disbursement of incentive share-back revenue. The Applicant is anticipated to collect the maximum rebate, totaling $350,000, within the five-year term. Over this period of time, the city expects to receive a total of approximately $1,000,000 in sales tax generated from the restaurant, before share-back incentive disbursement. In addition, the city expects to receive roughly $55,000 in use tax for building materials used for the development. The table below presents a range of estimates for the Applicant’s annual sales tax generation and rebates.
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Operating Year |
Annual Estimated Sales Tax Revenue |
Annual Estimated Rebates |
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Year 1 (Opening Year) |
$179,000 - $188,000 |
$89,500 - $94,000 |
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Year 2 (First Full Year of Operation) |
$183,000 - $193,000 |
$91,500 - $96,500 |
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Year 5 |
$197,000 - $208,000 |
$98,500 - $104,000 |
In the unlikely event the applicant fails to perform, there is no General Fund expenditure associated with this request. Additionally, we anticipate an investment of this kind to continue to further catalyze interest in private investment in the downtown corridor.
Policy Criteria
Economic Partnership Incentive Policy
• Program: Retail Development Incentive Program
• Incentive: Retail Sales Tax Reimbursement
Comprehensive Economic Development Strategy (CEDS)
• Strategic Pillar 1: Business Vitality and Adaptability
• Strategic Pillar 3: Fostering a Livable Economy
• Strategic Pillar 6: Regional Economic Positioning
Horizon 2027 Strategic Plan and Council Initiatives
Outcomes
• Robust and Resilient Economy
• Vibrant Community with Rich Culture
2 - 3 Year Initiatives
• 14. Increase awareness of local spending benefits for Littleton residents and attract new shoppers to Littleton.
• 15. Create and implement a plan to market Littleton’s unique character and increase tourism, sales tax revenue, and support Littleton businesses.
Comprehensive Plan - Economy & Tax Base
• Policy E&T: 2, 3, 4, 6, 8
STAFF RECOMMENDATION:
Direct staff to present an Economic Partnership Incentive Agreement with the Applicant as proposed for consideration at the November 17, 2026.
ALTERNATIVES:
1. Do not prepare an agreement for Council’s consideration at the November 17, 2026, regular meeting, as currently scheduled.