Fiscal Note
This resolution amends a 2011 resolution (#24230) related to a TIF loan of $1,372,000, to GI Clinic, LLC, for a University of Wisconsin Digestive Health Clinic Project. The amendment would do the following:
· Delete a reference to 265 parking stalls from the project.
· Amend the prohibition on sale or transfer of the property prior to repayment of the TIF loan to allow the original property to be subdivided.
· Allow the sale or transfer of the subdivided portion of the property without requiring payment of either a release price or an equity participation payment.
· Release the subdivided parcel from the TIF mortgage and development agreement and remove the tax increment on the subdivided parcel as a credit toward the developer’s increment tax guaranty.
· Consistent with the 2011 resolution, require the owners of both the original property and the subdivided portion to continue to make a payment in lieu of taxes (PILOT) in the event that the either or both properties become tax-exempt.
The proposed resolution makes no change to an appropriation. Estimated revenues to the city are unchanged since the original PILOT requirement and the equity participation payment up to the amount of the TIF loan are retained.
Subdivision of the property does change the assumptions used in calculating the TIF loan. The entire project was assumed to generate $24.5 million in value. The TIF loan of $1.372 million was estimated to use approximately 29% of the net present value of the incremental taxes generated by the project value over the life of the tax increment district (see TIF report attached to resolution #24230).
According to the City Assessor, the estimated value of the property without the subdivided parcel ranges from $18 million to $22.4 million, depending on the amount assumed for net operating income. Based on this range of added property value from the project, the TIF loan of $1.372 million would represent between 32% and 39% of the net present value o...
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