Edgar’s Bakery and Waldo’s Chicken and Beer primed for incentives from Pelham

Published 11:55 am Wednesday, July 3, 2024

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By DONALD MOTTERN | Staff Writer

PELHAM – The Pelham City Council stands primed to greenlight two new economic incentive agreements which aim to finalize future retail developments with Edgar’s Bakery and Waldo’s Chicken and Beer following its July 1 work session and meeting—with finalization expected to come at the forthcoming meeting on Monday, July 15.

The two businesses are part of a new development set to be built adjacent to the Pelham Public Library.

The first of these agreements is brokered with Edgar’s Pelham LLC, a venture of Edgar’s Old Style Bakery Inc., which is set to establish a new retail facility spanning between 3,500-3,700 square feet.

“This has been an ongoing discussion with the council and Edgar’s for some time now,” Pelham’s Economic Development Director Michael Simon said. “This agreement is for the new (Edgar’s) retail establishment in our Pelham Central Park Project that will be located in front of the Pelham Public Library.”

Edgar’s Old Style Bakery Inc., owned by Terry and Dottie Smith, is expected to purchase Parcel C from HCI Pelham, who will serve as the developer for the project. The cost of the project for Edgar’s to build their freestanding retail space, including the costs of the acquisition, has been submitted to the city at an estimated approximation of $2.8 million.

“The closing is imminent and will occur here in the middle of July,” Simon said. “Then (Edgars) will subsequently purchase the property from the developer, who will begin the site work and the parking lot and build the pads for Edgar’s and for Waldo’s Chicken and Beer and the other entities that would take those parcels.”

Under the terms of the agreement, Edgar’s Pelham LLC stands to benefit from a structured incentive package, contingent upon timely construction and operational milestones. This includes a sales tax revenue share over a 15-year period, starting with 75 percent for the first decade and scaling down to 50 percent for the subsequent five years. Additionally, there is a proposed 50 percent rebate on the non-educational portion of property taxes for a decade, along with a potential $100,000 rebate on acquisition costs after one full year of operation.

That pending agreement is entirely separate in form and structure from the state tax abatement agreement that was passed by the Council at the night’s meeting that dealt with the expansion of the commissary facility at Edgar’s already operational location in Pelham.

The second pending agreement stands with Waldo’s Chicken and Beer, which is preparing to launch its own establishment within the development site on Parcel D of the project.

That planned restaurant location is expected to sit at approximately 3,500 square feet and will include a fully operational drive-thru and expanded parking lot. Waldo’s Chicken and Beer has submitted an estimated approximate cost of around $2.2 million to complete the location, with initial rental rates set at $48 per square foot.

Simon highlighted that Waldo’s request for assistance is aimed at offsetting its construction and initial operational costs through a sales tax revenue share model, projected to reach up to $425,000 over the first decade or until the threshold is met.

“They are asking for a 50 percent share of their sales tax generated after opening for 10 years or $425,000—whichever is reached first,” Simon said. “That amount, broken down over the course of those first 10 years allows the pro forma to be reached to a point where the developer is willing to open the facility.”

Similar to Edgar’s agreement, Waldo’s incentive agreement is contingent upon construction and operational milestones. While Edgar’s must begin construction 12 months after closing on the property and begin operations within 18 months, Waldo’s will have the same 12 months to begin construction but will have until 20 months after closing to begin full operations.

This extra two-month allowance is being provided to accommodate the complexities of infrastructure development specific to Waldo’s needs, including a drive-through facility and additional infrastructure requirements.

“(The extension is being given) because of the drive-thru and the slightly larger development that Waldo’s is going to be built on—with access from the north road,” Simon said. “As well as that, they are doing all of their own infrastructure, whereas Edgar’s is being done by the developer. I feel those extra two months are just trying to provide a small window there.”

To make way for the sale of these properties to the developer, and therefore facilitate the ability to pass the two pending agreements, the Pelham City Council also passed Ordinance No. 519 at the meeting which declared the property that constitutes the development as surplus and served as the final step in the process to sell it to HCI Pelham.

At the recommendation of Simon, the Council did so on the ordinance’s first reading by suspending the rule normally requiring it to be first read and then passed at a subsequent meeting.

Both incentive agreements, while not yet approved by the Council, are expected to be passed at the forthcoming meeting set for Monday, July 15.