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Mermaid Staff Report October 13, 2008 Page 3 The majority of the Mermaid property is currently located in TIF District #1. After a discussion with financial consultant Ehlers & Associates, the City Finance Director recommends the Mermaid property remain in the TIF District so the city would continue to capture increment funds. The financing details are planned for further discussion at the October 27, 2008 EDA meeting. Another issue that arose from the revised 3-lot plat, is the fact that there would now be a property line running through the building, formally separating the Mermaid from the hotel. This is an issue because the fire code does not allow for any openings where the property line runs through the building. There is currently a hallway and a set of doors that connects the Mermaid to the hotel. The fire code would require this opening to be permanently closed off, but the Department of Labor & Industry has allowed openings if each building/property owner signs a “Hold Harmless Agreement.” By not allowing openings between separate buildings, the fire code is trying to prevent or reduce the fire spread or damage done to the adjoining building if there were to be a fire. The Hold Harmless Agreement would acknowledge the additional liability due to the opening between the buildings. City Attorney Scott Riggs has also agreed that the agreement could be an alternative as long as the document has adequate protective language running in favor of the City. PUD Amendment Discussion: The City originally approved the Mermaid PUD in 2000 when the hotel addition was proposed, and specified that bowling lanes, a hotel, banquet center, night club and lounge, and restaurant were the only allowed uses on the site. The Halls are now proposing to subdivide and sell a piece of their property to a developer who plans to build a 14,000 square foot, five store retail mall. This proposed addition of retail to the site requires the City to amend the Mermaid’s PUD Agreement to allow this new use. The addition of a retail center to one of the most prominent corners in the city would initially seem to be a good fit. The primary issue with this proposal is parking – both for the existing Mermaid and the new retail building. By adding a building to the site, many of the existing parking spaces will be lost and the new stores will generate additional parking needs. Staff required that a parking study be included with the application for this PUD Amendment. The Mermaid has made some interior changes since the PUD and parking requirements were originally approved in 2000. In the last few years, the downstairs night club has been removed with additional banquet space put in its place, and the size of the restaurant was reduced and an arcade area added. The city code does not address complementary uses when determining parking requirements. The code only states “this specific use requires this number of parking spaces,” whereas staff realizes that in this situation for example, people staying at the hotel also may be using the banquet room and the arcade. The parking study is included in this staff report.