Agenda Date: 09/15/2026
Subject:
Title
Resolution 64-2026: Approving a second amendment to the Economic Partnership Incentive Agreement Between the City of Littleton and RIG Mineral LLC for Retail Sales Tax Share Back
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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Presentations: |
Rachel King, Economic Development Director |
PURPOSE:
To consider the approval of a second amendment to the Economic Partnership Incentive Agreement (“Agreement”) between the City of Littleton and RIG Mineral LLC.
LONG-TERM OUTCOME(S) SERVED:
Robust and Resilient Economy
DISCUSSION:
This is a request to amend the Agreement between RIG Mineral LLC and the city to reduce the sales tax share back that is currently capped at $29,500,000. The revised value is derived from an analysis performed by EPS to determine a fair market value considering the change in retailers in the development and the corresponding sales volume that was used to determine the original feasibility gap in 2024. The new value of $25,000,000 will be in effect starting with the first sales taxes generated being remitted to the city and will end with the maximum share back reached, or ten years, whichever occurs first. While all other aspects of the Agreement remain valid and unchanged, this substantive part of the contract does not require any up-front funding by the city. The terms remain performance-based and place the risk on the Applicant to perform, meaning it is entirely in the best interest of the Applicant to sell or lease properties for immediate development of retail and commercial users as quickly as possible. Additionally, it is also in their best interest to develop the Project with retail users that have higher sales per square foot volume, which is also beneficial to the city.
BACKGROUND:
In 2024, the city entered an Agreement with RIG Mineral LLC for the proposed redevelopment of the Lumen Technology site located at 700 West Mineral Avenue (“Project”). The Project, named Mineral Place, includes approximately 45 acres of commercial/retail development, extensive infrastructure and off-site infrastructure upgrades, and extensive landscaping. The development will consist of a Costco retail warehouse, a second anchor tenant and additional development lots.
The Agreement includes a maximum of $29,500,000 sales tax share back at a 50% rebate on collected sales tax up to 10 years. The term will expire with either the maximum rebate or ten-year term, whichever occurs first.
In 2024, two large retail anchor sites and multiple smaller commercial sites were contemplated for the Mineral Place development. One of the anchor sites was known to be a Costco retail warehouse with a separate fuel facility that would be located on an adjacent pad site. The other anchor was not known at that time, though discussions were happening between the Developer and a national home improvement retail store. Accordingly, the original Agreement between RIG and the city was constructed from the estimates known at that time pertaining to land sales and/or leases, site development costs, and corresponding estimated sales revenues and growth with the proposed incentive predicated on an identified feasibility gap to make the project a reality. With much analysis performed by two independent economic consultants, the feasibility gap was validated and confirmed due to the high price of the land, demolition costs associated with the former 680,000 square foot building, the cost of infrastructure needed to improve the site and conditions surrounding the site, and cost of bonds associated with the Business Improvement District (BID). The BID for this parcel will add a 1% fee to the total sales tax to pay the bonds that are tied to the BID for capital financing of the Project.
In the last year, the Developer has been in negotiations with Scheels to bring their outdoor sports retail store to Mineral Place. Staff was informed that in July, the Scheels Board of Directors approved the Mineral Place development site in Littleton for its next new store location, besting a list of approximately seven potential U.S. locations. Based on available industry data, staff believes approval of an incentive agreement for this Project would result in a substantially positive net fiscal impact on the city and provide new jobs and amenities for residents. Should Council approve an economic partnership incentive agreement for the Scheels project, the Littleton Scheels is anticipated to start construction in the first quarter of 2027 and open to the public in the first quarter of 2029.
Approval of the Scheels incentive agreement will necessitate a modification to the original Agreement for Mineral Place, in order to remove the home improvement retailer as the second anchor store so as to prevent incentivizing the second anchor twice. To determine the change in values used in the original Agreement and a new value, the city retained the services of EPS to update their analysis model by removing the second anchor. EPS concludes that the proposed $25 million dollar sales tax share back cap is reasonable, as it represents a proportional reduction in the cap relative to the home improvement retailer’s share of projected sales whereby with the home improvement retailer included, Costco was projected to account for 74% of sales, the home improvement retailer 15% of sales, and the ancillary retail 11% of sales. Therefore, the cap is reduced from $29.5 million to $25 million which is equivalent to a 15% reduction.
Despite the addition of Scheels to the Project site, the scale and complexity of the Project still remain, and requires significant financing tools to make it feasible. As a redevelopment project, costs are inherently higher than development of undeveloped sites. The capital required to finance a project this large is challenging and remains infeasible without this partnership.
Prior Actions or Discussions
Resolution 103-2024: Approving an Economic Partnership Incentive Agreement with RIG Mineral LLC regarding Mineral Place.
FISCAL IMPACTS:
The Mineral Place development, without Scheels, is anticipated to generate significant taxable sales of approximately $197,000,000 in year 1 (2027). Once the project reaches the $25.0M threshold (projected for 2032), the revenues to the city increase considerably from $3.2M in 2032 to $7.9M in 2033.
When these revenues are netted against expenditures, the net fiscal impact ranges from a positive $2.3M (2027) to a positive $2.6M (2032), with a jump in revenues starting in 2033 of $7.3M, which is expected to continue with a gradual escalation into the foreseeable future.
Adding Scheels to the development is expected to result in additional taxable sales of $110 million in year 1 (opening April 2029) to $135 million in their first full year (2030), and over $200 million in year 10 (2039).
The net fiscal impact of the Mineral Place development with Scheels could generate $4,300,000 to the city in year 3 (2029) to $10,800,000 in year 10 (2039) in net new sales taxes (net of share back with each of two active incentives).
These estimates account for the cost of city services with a commensurate share of the estimated expenditure rate as reported by EPS for the Mineral Place development overall.
Approval of this amendment will reduce the originally identified incentive cap from $29,500,000 to $25,000,000 as a maximum share back from the city to the Developer. This remains a performance-based incentive and places the risk on the Developer, with no risk to the city with this amended Agreement.
STAFF RECOMMENDATION:
Staff recommends approval of a second amendment to the Economic Partnership Incentive Agreement between the City of Littleton and RIG Mineral LLC.
ALTERNATIVES:
Do not amend the Agreement.
PROPOSED MOTION:
Proposed Motion
I move to approve Resolution 64-2026 approving a second amendment to the Economic Partnership Incentive Agreement between the City of Littleton and RIG Mineral LLC for Retail Sales Tax Share Back.