Lancaster approves up to $350,000 incentive tied to Starbucks project after legal questions

Lancaster — The City Council approved a resolution ratifying an amended and restated performance agreement with Noble Lancaster LLC that allocates up to $350,000 in incentives to support development of a Starbucks at the southeast corner of Interstate 20 and Northeast School Road and to encourage a second quick-service restaurant in the city.

Shane Shepherd, the city's director of economic development, told council that Noble, a Dallas-based developer, had to revise plans after Starbucks changed its site layout and that the amended concept doubles the footprint of the original plan and raised development costs to about $2.1 million for the Starbucks parcel. Staff said the incentive package includes $150,000 to offset the Starbucks development and a contingent $200,000 tied to the developer delivering a second quick-service restaurant by June 30, 2028, and that the city attorney had reviewed the agreement.

Several council members questioned whether economic-development funds could be used for a restaurant. One council member said, "I think $350,000 is pretty heavy for a Starbucks, maybe a fast food restaurant. I can't support this." In response, city staff and legal counsel explained the legal rationale. A city attorney or legal representative stated that on-site coffee grinding and sale of packaged coffee can qualify under certain SIC/NAICS classifications as a manufacturing operation, which allows the incentive structure being used.

Developer Wayland Longeneau clarified that the $350,000 figure is the program maximum and that the initial allocation for the Starbucks portion is $150,000; an additional $200,000 would be applied only if the second restaurant is developed within the city during the specified period. He described the new Starbucks prototype as a larger, higher-quality building.

After discussion the council moved, seconded and approved the resolution. The public transcript shows the motion carried; no roll-call vote tally is recorded in the excerpt.