Fiscal Note
The proposed resolution authorizes amendments to the term sheet related to the agreements between the City, the Community Development Authority (CDA), and EC Residential LLC for the development project at 5546 Element Way in TID 46. The amendments to the term sheet do not change the amount or type of TID 46-supported funding originally approved for the project via legislative file 86170 (RES-24-00730): $930,000 TIF loan to EC Residential LLC and $4,365,000 grant to CDA. No additional City appropriation required.
Title
Authorizing amendments to the term sheet authorized by Legistar File No. 86170 regarding a Tax Incremental Finance Loan to EC Residential LLC, or its assigns, and a grant to the CDA related to the construction of affordable housing at 5546 Element Way in the University Research Park and Tax Incremental District (TID) 46 (District 19).
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WHEREAS EC Residential LLC, or its assigns, (“Developer”) has proposed to construct 197 affordable housing units and 151 underground parking stalls on the Property at a total estimated development cost of approximately $63,254,000 (“Project”) located at 5546 Element Way, within the University Research Park property in the City of Madison and within the amended boundary of TID #46 (“Property”), subject to an amendment to the Project Plan to TID #46; and
WHEREAS by adoption of Legistar File No. 86170, RES-24-00730, on December 10, 2024, the Common Council authorized the City of Madison to provide $930,000 as TIF Loan assistance to the Project and transferring $4,365,000 of tax increment from TID #46 to the Community Development Authority of the City of Madison (“CDA”), in the form of a grant, for the purpose of purchasing such future ownership interest in the Project, toward the public purpose of preserving affordable housing; and
WHEREAS Developer, the City, and CDA have negotiated updated terms, reflected in the term sheet attached hereto as Exhibit A (the “Term Sheet”), which includes converting the CDA’s prepayment a ground lease to a loan from the CDA, which would benefit the Project, the City, and the CDA; and
WHEREAS the updated terms do not modify the amount of City or CDA funding; and
WHEREAS, in addition to any other powers conferred by law, the City may exercise any power necessary and convenient to carry out the purpose of the TIF law, including the power to cause project plans to be prepared or amended, to approve such plans, and to implement the provisions that effectuate the purpose of such plans; and
NOW, THEREFORE, BE IT RESOLVED that the City hereby finds and determines that the Project is consistent with the public purposes of Tax Increment Finance Law and the plans and objectives set forth in City of Madison TIF Policy, the City’s loan to Developer demonstrates the potential to encourage development of a wide range of housing options in TID #46, thereby making more likely accomplishing the public purpose objectives set forth in the Project Plan, TIF Law and City TIF Policy.
BE IT FURTHER RESOLVED that the City hereby finds and determines that the Project is consistent with its goals and objectives concerning the creation and preservation of affordable housing and therefore authorizes a transfer of $4,365,000 of TID 46 tax increment to the CDA toward purchasing a future ownership interest in the Project.
BE IT FURTHER RESOLVED that the amendments to the previously authorized term sheet as reflected in the attached Tern Sheet are hereby approved, and the grant to the CDA and the TIF Loan and CDA grant funding shall be on substantially the same terms as the Term Sheet.
BE IT STILL FURTHER RESOLVED that the Mayor and City Clerk are hereby authorized to execute a development agreement, and other documents as may be necessary to effectuate the transaction, all of which are subject to the approval of the City Attorney.