Fiscal Note
The proposed resolution authorizes a Small Cap TIF loan to Stella’s Bakery of Madison or its assigns in the amount of $250,000 for real estate improvements to the commercial property at 3113 Syene Rd. The TID 51 Project Plan includes $1.5 million for Small Cap TIF Loan Program. At loan closing, the City shall disburse an amount equal to 15% of the principal amount of loan to MDC from Program funds for servicing. The service fees for this loan will be $37,500.
The TID 51 Project Plan includes $1.5 million for Small Cap TIF Loans. The Common Council approved the TID 51 Project Plan in 2023 (RES-23-00208, Leg file 75809). Council further authorized Madison Development Corporation (MDC) to administer the program in TID 51 (RES-23-00470, Leg file 78323). Six other Small Cap TIF loans in TID 51 have been approved by Council: $212,500 (RES-23-00651, Leg file 80079), $250,000 (RES-23-00776, Leg file 80813), $80,000 (RES-24-00060, Leg file 81363), $113,500 (RES-24-00061, Leg file 81366), $100,000 (RES-24-00348, Leg file 83170), and $125,000 (RES-24-00551, Leg file 84609). Service fees for these loans total $132,150.
No additional City appropriation is required.
Title
Authorizing a loan to Stella’s Bakery of Madison or its assigns in the amount of $250,000 for real estate improvements to the commercial property at 3113 Syene Road through the TID 51 Small Cap TIF program using TID #51 incremental revenue as authorized in the TID #51 Project Plan (RES-23-00208) adopted by the Common Council on March 7, 2023. (District 14)
Body
WHEREAS, the City of Madison has created the boundary and Project Plan for Tax Incremental District (TID) #51 on March 7, 2023 RES-23-00208 (File ID Number 75809); and
WHEREAS, the intent and purpose of the Project Plan, among other things, is to attract and retain business and employment in the South Madison area generally bounded by Fish Hatchery Road, the Beltline Highway, John Nolan Drive, and Murphy Creek; and
WHEREAS, Stella’s Bakery of Madison will operate its businesses out of this location and the improvements will include cold storage, new equipment, as well as a new roof and new HVAC. This will allow the company to automate most production which is currently done manually. The structure includes 3 offices, small storage, two restrooms, 4160 SF warehouse, two loading docks and one drive-in overhead door. The company has been in operation since 1988; and
WHEREAS, Stella’s Bakery of Madison would utilize Small Cap TIF program funds to assist with the real estate improvements for the property located at 3113 Syene Road, hereby meeting the requirements of the Small Cap TIF program; and
WHEREAS, the program guidelines stipulate through these funds borrowers may receive zero-percent (0%) loans, not to exceed $250,000, for the purpose of purchasing real estate, financing real estate improvements or not to exceed $150,000 for purchasing capital machinery and equipment. And for each anniversary year of the Common Council authorization of the Loan, 20% of the original principle of the Loan is forgiven until the entire balance is forgiven at the end of five (5) years; and
WHEREAS, the City of Madison has a service contract with Madison Development Corporation (MDC) to market the Program to eligible small businesses and MDC shall qualify all Borrowers for eligibility and credit-worthiness; and
WHEREAS, MDC created a loan summary report and the MDC Loan Committee has recommended an investment of $250,000 of TID 51 Small Cap TIF loan program funds using TID #51 incremental revenue to this project.
NOW, THEREFORE BE IT RESOLVED, that the Common Council authorizes a $250,000 TID 51 Small Cap TIF loan program using TID #51 incremental revenue to Stella’s Bakery of Madison and/or its assigns for real estate improvements to the property at 3113 Syene Road; and
BE IT FINALLY RESOLVED that the Mayor and City Clerk are hereby authorized to execute a loan agreement and/or any other documents as may be necessary to effectuate the transaction, all of which are subject to the approval of the City Attorney.